Health Reform in the United States: Medicaid Expansion

The Affordable Care Act introduced several significant strategies aimed at increasing access to medical coverage for the millions of Americans without health insurance in 2010. A primary option presented to states was a substantial expansion of their Medicaid program. In order to accomplish this the eligibility threshold was increased to include individuals with incomes up to 138% of the Federal Poverty Line (FPL). The Congressional Budget Office projected a total enrollment increase of 24 million by 2016 if all 50 states elected to participate in Medicaid expansion. As an incentive for participation the federal government pledged to cover 100% of the additional costs through 2016 and a minimum of 90% in subsequent years. It is important to note that the standard CMS/state cost share arrangement for Medicaid is 57-43.

As of the date of this post 27 states and the District of Columbia have chosen to participate in Medicaid expansion, while 22 have not. The initial results in expansion states are promising as they appear to indicate a positive effect on enrollment. Medicaid enrollment has increased by 4.8 million individuals since 2012 at an average rate of 12.9% per year. The latest CBO projection has this figure approaching 13 million by 2015. Even in those states which have declined to participate there has been an uptick in enrollment of 2.6%. In addition to the increase in access the actual cost growth for states will ultimately be negligible. A CBO review of Medicaid expansion costs projects that states will on average carry only a 1.6% higher burden due to expansion through 2024.

It is interesting to consider the impact that generally favorable results from an access/cost perspective would have on public opinion polling. Prior to ACA implementation there was a slightly positive view of the ACA as according to a Gallup survey 53% of respondents approved of the upcoming health reform package. Following a difficult launch in 2012 which included website issues, confusion over eligibility and an attempt by Congressional Republicans to repeal the law, public approval of the ACA dipped significantly to 43%. These results have remained largely consistent even with the publication of data suggesting that a significant number of individuals have gained access to coverage. This may be due in part to political ideology as there is a direct link between party affiliation and opinion of healthcare reform, in that 79% of self-identified Democrats approve of the ACA versus only 8% of Republicans.