States across the country are quietly erecting a new barrier to insurance access for America’s lower-income Medicaid recipients. Though supporters of the Affordable Care Act make much out of the law’s aim of expanding Medicaid to a wider subset of Americans, in practice that promise may remain unfulfilled for many.
The NYT’s Upshot blog notes that Medicaid has always made use of what is called ‘cost-sharing’—deductibles, co-pays, and other charges tied to specific instances of care—because the evidence shows they can reduce overuse. Charging annual premiums, however, has been off-limits, as most Medicaid recipients are in fact too poor to afford them.
Under the ACA’s Medicaid expansion, this has started to change. Some states have begun to charge users small annual premiums that, while too small to put a dent even in the cost of administering the programs, are discouraging some of the poorest people from enrolling in the first place.
A recent study in the journal Health Affairs found that a $10 increase in monthly Medicaid premiums resulted in a 6.7 percent reduction in Medicaid and the federal Children’s Health Insurance Program coverage for families earning between 100 percent and 150 percent of the poverty line. It also resulted in a 3.3 percent increase in the uninsured. These small premiums may lead people not to obtain insurance.This mirrors work published earlier this year by Laura Dague in the Journal of Health Economics. She looked at how small premiums affected enrollment in the Wisconsin Medicaid program, and found that the creation of a $10 monthly premium was associated with a 12 percent reduction in the likelihood of people remaining enrolled in Medicaid for a full year.
In other words, states are “expanding” Medicaid while simultaneously putting new rules into place that actually discourage people from signing up or staying in the program. There is a clear budgetary rationale to doing this, but it sure looks like a violation of the spirit of the promise that the Obama administration made when it sold the law as a means of expanding coverage. Moreover, it points to how much more complicated the relationship between formal statistics like initial sign-ups and the actual reality of care received over time is. The way we measure access to the system misses many of the on-ground-dynamics highlighted here by the Upshot.
More broadly, the story points to how difficult it is to dump more people into a health care system already constrained by tight budgets and huge cost problems. It’s unsurprising that state governments would try to evade the spirit of the expansion because of budget pressures—some sort of fiscal whack-a-mole where regulations merely shift the distortions elsewhere will inevitably happen as long as our health care remains as expensive as it currently is. Make health care cheaper and expanding access (in reality as well as name) becomes much easier; try to expand access without fixing the cost problem and the status quo will reassert itself, as it has done here.