Kaiser Family Foundation Study Reveals Higher Cost Burden For States That Refused To Expand Medicaid And Accept Federal Funds

The Kaiser Family Foundation: By Turning Down Federal Money, Non-Expansion States Must Spend More “To Maintain Current Programs.” In an October 15 report, the Kaiser Family Foundation found that states that failed to expand Medicaid had slower enrollment growth and overall Medicaid spending but spent nearly twice the amount of state money on Medicaid than states that expanded the program with the benefit of federal matching funds available for expansion (emphasis original):

Across the 22 non-expansion states in FY 2015, enrollment and total Medicaid spending grew 5.1 percent and 6.1 percent (respectively), much slower growth than experienced by expansion states. Increased Medicaid enrollment among “previously eligible but not enrolled” parents and children was the primary reason cited for Medicaid enrollment growth in non-expansion states in FY 2015. Additionally, total Medicaid spending increased on average by 6.1 percent across non-expansion states in FY 2015, also primarily due to growth in Medicaid enrollment.

Growth in state general fund spending for Medicaid in expansion states was much slower than total Medicaid spending in FY 2015, due to the ACA enhanced FMAP. In the 29 states that had implemented the Medicaid expansion in FY 2015, state general fund spending on Medicaid increased on average by 3.4 percent (compared to total Medicaid spending growth of 17.7 percent). States that implement the Medicaid expansion receive 100 percent federal match for those made eligible by the expansion; therefore, the increase in total Medicaid spending in these states was supported primarily by the increase in federal matching funds to these states.

In FY 2015, across the 22 non-expansion states, state general fund spending on Medicaid increased by 6.9 percent on average, slightly higher than total Medicaid spending growth of 6.1 percent. (Figure 4) Differences between total and state Medicaid spending growth in non-expansion states were driven by annual formula-driven changes in the FMAP, particularly for some large non-expansion states. For example, in Texas the FMAP dropped from 58.69 percent to 58.05 percent, necessitating additional state Medicaid spending to maintain current programs. [Kaiser Family Foundation, 10/15/15]

NPR: “The 29 States That Took President Obama Up On His Offer To Foot The Bill For Expanding Medicaid Saw Their Costs Rise Only 3.4 Percent.” In an October 15 NPR article, Alison Kodjak cited the Kaiser Family Foundation study and noted that states with expanded Medicaid and accompanying federal funds saw lower state spending increases despite nearly triple the enrollment rates of states that did not expand Medicaid.

The 22 states that didn't expand Medicaid eligibility as part of Obamacare last year saw their costs to provide health care to the poor rise twice as fast as states that extended benefits to more low-income residents.

It's a counterintuitive twist for those states whose governors, most Republicans who opposed the Affordable Care Act, chose not to accept federal funds to extend Medicaid to more people.

A Kaiser Family Foundation survey of Medicaid directors in all 50 states and Washington, D.C., showed that those that didn't broaden coverage saw their Medicaid costs rise 6.9 percent in the fiscal year that ended Sept. 30. The 29 states that took President Obama up on his offer to foot the bill for expanding Medicaid saw their costs rise only 3.4 percent.

That modest increase in Medicaid spending in the expansion states came even as the rate of Medicaid participation rose 18 percent, three times as much as the states sitting out. [NPR, 10/15/15]

The Kaiser Family Foundation: Texas, Florida, And Georgia Have The Highest Populations In The “Coverage Gap.” As the Kaiser Family Foundation notes in an October 23 brief, individuals in the “coverage gap” have an income that is “above current Medicaid eligibility but below the lower limit for Marketplace premium tax credits.” According to the brief, adults still in this coverage gap “are concentrated in states with the largest uninsured populations.”

Nationally, more than three million poor uninsured adults fall into the “coverage gap” that results from state decisions not to expand Medicaid, meaning their income is above current Medicaid eligibility but below the lower limit for Marketplace premium tax credits. These individuals would have been newly-eligible for Medicaid had their state chosen to expand coverage.

Adults left in the coverage gap due to current state decisions not to expand Medicaid are spread across the states not expanding their Medicaid programs but are concentrated in states with the largest uninsured populations. A quarter of people in the coverage gap reside in Texas, which has both a large uninsured population and very limited Medicaid eligibility (Figure 2). Eighteen percent live in Florida, ten percent in Georgia, and eight percent in North Carolina. [Kaiser Family Foundation, 10/23/15]

But Major Newspapers For The Three States With The Highest Population Of Uninsured People In The Coverage Gap Neglect To Cover Their State's Increased Cost Burden Associated With Not Expanding Medicaid

Highest-Circulating Newspapers In Texas, Florida, And Georgia Made No Direct Mention Of The Higher Cost Burden As A Result Of Rejecting Medicaid Expansion. According to a Media Matters' analysis of Medicaid mentions between October 15 and October 29 in the highest-circulating state newspapers of those states with the greatest number of people in the coverage gap -- The Dallas Morning News, Tampa Bay Times, and The Atlanta Journal-Constitution -- 31 total articles were published that discussed Medicaid. While the Tampa Bay Times mentioned the costs associated with the program the most, none of the papers mentioned the actual increased cost to their state that the failure to expand has had compared to states that expanded the program. In addition, none mentioned the Kaiser Family Foundation study. The papers also made little mention of the uninsured population or the coverage gap.

Lack Of Medicaid Expansion Adversely Affects Hard-Working, Low-Income Americans And Disproportionately Affects Minorities

Families USA: In Non-Expansion States, “More Than Half Of The Residents Who Could Benefit From Medicaid Expansion Are Working Adults.” A February 2015 Families USA issue brief explained that many of the Americans left out of Medicaid expansion are low-wage working adults who “lack access to affordable health insurance”:

Many of the hard-working people engaged in jobs we rely on every day--from child care aides to bus drivers to waitresses--lack access to affordable health insurance.

[. . .]

To date, 31 states (including D.C.) have chosen this option and expanded health coverage to adults with incomes up to 138 percent of the federal poverty level. (In 2015, that's about $27,720 for a family of three).

In our analysis of data from the 22 states that have not made the choice, we found that more than half of the residents who could benefit from Medicaid expansion are working adults--and that they work in occupations that make up the foundation of the state's economy. [Families USA, February 2015]

Center on Budget and Policy Priorities: About “215,000 Veterans In 23 States Are Uninsured And Denied Medicaid.” A November 2014 piece for the Center on Budget and Policy Priorities notes the high concentration of veteran's in the coverage gap who reside in just five U.S. states.

Roughly 215,000 veterans in 23 states are uninsured and denied Medicaid because their state has refused to take up health reform's Medicaid expansion. Half of them live in five states: 36,000 in Texas, 32,000 in Florida, 20,000 in Georgia, 17,000 in North Carolina, and 12,000 in Tennessee. [Center on Budget and Policy Priorities, 11/10/14]

The Kaiser Family Foundation: The Coverage Gap Includes 1.7 Million Adults Of Color. According to an October 2015 brief by the Kaiser Family Foundation, “Uninsured Black adults are more than twice as likely as White and Hispanic uninsured adults to fall into the coverage gap.”

Over 1.7 million adults of color fall into the coverage gap, and uninsured Black adults are disproportionately likely to fall into the gap. Overall, about one in ten (11%) or 3.1 million of the total 27.5 million uninsured adults fall into the coverage gap in the 20 states that have not adopted the ACA Medicaid expansion. This group includes over 1.7 million adults of color. Uninsured Black adults are more than twice as likely as White and Hispanic uninsured adults to fall into the coverage gap. Nearly one-quarter (24%) of uninsured Black adults fall into the coverage gap, compared to 11% of White uninsured adults and 7% of Hispanic uninsured adults (Figure 4). This reflects the fact that a large share of uninsured Black adults resides in the southern region of the country where most states have not adopted the expansion. [Kaiser Family Foundation, 10/26/15]

Methodology

Media Matters searched Nexis transcripts of the highest-circulating newspapers for three states that have not expanded Medicaid and have the highest number of people in the coverage gap according to the Kaiser Family Foundation: The Dallas Morning News (TX), Tampa Bay Times (FL), and The Atlanta Journal-Constitution (GA).  The search focused on the coverage of the increased cost burden to states that failed to expand Medicaid from October 15, the date of a Kaiser Family Foundation release showing the increased state costs associated with not expanding Medicaid under the Affordable Care Act (ACA), to October 29. In conducting the search, the term “Medicaid” was used to find all articles discussing the topic in the three state newspapers.  The terms “expand,” “expansion,” “cost,” “uninsured,” “coverage,” “coverage gap,” “Obamacare,” “Affordable Care Act,” “Kaiser,” “KFF,” “expenditures,” “CHIP,” and “Children's Health Insurance Program” were searched in all “Medicaid” responsive articles to determine if the increased state costs or the Kaiser Family Foundation study were mentioned.