Kansas Should Avoid The Medicaid Expansion Trap

February 9, 2017

The ApothecaryInsights into health care and entitlement reform. Opinions expressed by Forbes Contributors are their own.Josh Archambault, ContributorPauseUnmuteCurrent Time 0:28/Duration Time 0:30Loaded: 0%Progress: 0% FullscreenThe Kansas legislature has wisely rejected ObamaCare’s Medicaid expansion year after year. As a result, policymakers have protected taxpayers and the truly vulnerable from costly enrollment overruns. But now, despite a rapidly shifting health care landscape, special interest groups are once again ramping up pressure on state lawmakers to expand ObamaCare to a new class of able-bodied, mostly childless adults. Thanks to the prudence of Governor Sam Brownback and legislative leaders, Kansas is now in a position to learn from the mistakes of other states that bought into Washington’s false promises of flexibility and “free money.” They’ve also created a welfare reform model for the nation that they should build on, not diminish.

Source: Kansas Should Avoid The Medicaid Expansion Trap


Growth in Federal Spending on Medicaid Continues – AAF

February 6, 2017

The newly released Medicaid Actuarial Report states that total Medicaid outlays in the 2015 fiscal year amounted to $553.8 billion, increasing 11.6 percent between 2014 and 2015—the fastest growth in more than a decade. This is largely due to the ACA’s Medicaid eligibility expansion as expenditures for this population have been higher than expected. Adults previously eligible for the program had annual per enrollee costs of $4,580, $4,695 and $4,986 in the years 2013, 2014, and 2015, respectively, while expenditures for newly eligible adults were $5,511 (12 percent higher than other adults) in 2014 and $6,356 (28 percent higher) in 2015.

Source: Growth in Federal Spending on Medicaid Continues – AAF


The Effect of State Medicaid Expansions on Prescription Drug Use: Evidence from the Affordable Care Act by Ausmita Ghosh, Kosali Ilayperuma Simon, Benjamin Sommers :: SSRN

February 1, 2017

This study provides a national analysis of how the 2014 Affordable Care Act (ACA) Medicaid expansions have affected aggregate prescription drug utilization. Given the prominent role of prescription medications in the management of chronic conditions, as well as the high prevalence of unmet health care needs in the population newly eligible for Medicaid, the use of prescription drugs represents an important measure of the ACA’s policy impact. Prescription drug utilization also provides insights into whether insurance expansions have increased access to physicians, since obtaining these medications requires interaction with a health care provider.

We use 2013-2015 data from a large, nationally representative, all-payer pharmacy transactions database to examine effects on overall prescription medication utilization as well as effects within specific drug classes.

Using a differences-in-differences (DD) regression framework, we find that within the first 15 months of expansion, Medicaid-paid prescription utilization increased by 19 percent in expansion states relative to states that did not expand; this works out to approximately seven additional prescriptions per year per newly enrolled beneficiary. The greatest increases in Medicaid prescriptions occurred among diabetes medications, which increased by 24 percent. Other classes of medication that experienced relatively large increases include contraceptives (22 percent) and cardiovascular drugs (21 percent), while several classes more consistent with acute conditions such as allergies and infections experienced significantly smaller increases. As a placebo test, we examine Medicare-paid prescriptions and find no evidence of a post-ACA effect. Both expansion and non-expansion states followed statistically similar trends in Medicaid prescription utilization in the pre-policy era, offering support for our DD approach.

We did not observe reductions in uninsured or privately insured prescriptions, suggesting that increased utilization under Medicaid did not substitute for other forms of payment. Within expansion states, increases in prescription drug utilization were larger in geographical areas with higher uninsured rates prior to the ACA. Finally, we find some suggestive evidence that increases in prescription drug utilization were greater in areas with larger Hispanic and black populations.

Source: The Effect of State Medicaid Expansions on Prescription Drug Use: Evidence from the Affordable Care Act by Ausmita Ghosh, Kosali Ilayperuma Simon, Benjamin Sommers :: SSRN


Massachusetts Governor to Pitch Health-Insurance Penalty for Employers – WSJ

January 25, 2017

The first state in the nation to require residents to carry health insurance is grappling with escalating Medicaid rolls, but a fix floated by Massachusetts’ Republican governor is drawing pushback from employers.

Gov. Charlie Baker will propose in his annual budget on Wednesday a $2,000 penalty per worker on businesses that don’t shoulder enough of the health-insurance cost. The governor is aiming to solve what he sees as a flaw in the national health law: Medicaid ends up being more appealing to low-income workers than insurance offered by employers, raising the costs for the state.

Source: Massachusetts Governor to Pitch Health-Insurance Penalty for Employers – WSJ


Did the Affordable Care Act’s Medicaid Expansion Increase the Ability for Low-Income Households to Self-Insure? by Daeyong Lee :: SSRN

January 21, 2017

This article examines the effects of the Medicaid expansion on household financial income by focusing on the Affordable Care Act. The Affordable Care Act extended Medicaid program to childless adults and eliminated the asset-test for its eligibility from 2014. Using the March Current Population Survey Supplement Data, I find that households with no dependent children and income below the 100% federal poverty level living in Medicaid-expansion states significantly increased the annual dividend (interest) income by 63 (84) dollars after the Medicaid expansion. Meanwhile, the financial assistance these households received from relatives or friends was reduced by 159 dollars after the expansion.

Source: Did the Affordable Care Act’s Medicaid Expansion Increase the Ability for Low-Income Households to Self-Insure? by Daeyong Lee :: SSRN


Does Medicaid Expansion Affect Employment Transitions? by Erkmen Giray Aslim :: SSRN

January 6, 2017

The Affordable Care Act expanded Medicaid eligibility to adults who are below 138 percent of the federal poverty level. There is little to no evidence on the employment effects of the Medicaid expansion in 2014. This paper investigates the pre/post labor market implications of Medicaid expansion with a population near the eligibility cutoff. Using an exogenous variation at the eligibility cutoff, I find a large reduction in part-time employment (<35 Hrs) relative to full-time employment (≥35 Hrs). The reduction in part-time employment (<35 Hrs) suggests that most of the individuals drop out of the labor force, although some transition into full-time employment (≥35 Hrs) or unemployment. The employment transitions imply that labor supply is flexible after being eligible for Medicaid. The labor supply flexibility is also observed for females, middle-aged adults (49-64 years of age), never-married adults and high-school dropouts. When difference-in-differences (DD) model is used for the whole population, the estimates are similar to those in the literature that find no employment effects. The DD model, however, fails to incorporate eligibility measures and also includes adults who are less likely to have Medicaid.

Source: Does Medicaid Expansion Affect Employment Transitions? by Erkmen Giray Aslim :: SSRN


Medicaid reform: The elephant in the room – AEI

January 6, 2017

While headlines fixate on the future of the Affordable Care Act’s health insurance exchanges, a more consequential fight is brewing over the future of Medicaid. Proposed reforms would affect tens of millions of Americans and state governments across the country. Previous attempts have failed, however, and longstanding roadblocks may sink this administration’s efforts as well.

Source: Medicaid reform: The elephant in the room – AEI