The Long-Run Effects of Childhood Insurance Coverage: Medicaid Implementation, Adult Health, and Labor Market Outcomes

December 5, 2016

This paper exploits the original introduction of Medicaid (1966-1970) and the federal mandate that states cover all cash welfare recipients to estimate the effect of childhood Medicaid eligibility on adult health, labor supply, program participation, and income. Cohorts born closer to Medicaid implementation and in states with higher pre-existing welfare-based eligibility accumulated more Medicaid eligibility in childhood but did not differ on a range of other health, socioeconomic, and policy characteristics. Early childhood Medicaid eligibility reduces mortality and disability and, for whites, increases extensive margin labor supply, and reduces receipt of disability transfer programs and public health insurance up to 50 years later. Total income does not change because earnings replace disability benefits. The government earns a discounted annual return of between 2 and 7 percent on the original cost of childhood coverage for these cohorts, most of which comes from lower cash transfer payments.

Source: The Long-Run Effects of Childhood Insurance Coverage: Medicaid Implementation, Adult Health, and Labor Market Outcomes


Contrary To Popular Belief, Medicaid Hospital Admissions Are Often Profitable Because Of Additional Medicare Payments

December 5, 2016

It is generally believed that most hospitals lose money on Medicaid admissions. The data suggest otherwise. Medicaid admissions are often profitable for hospitals because of payments from both the Medicaid program and the Medicare program, including payments for uncompensated care and from the Medicare disproportionate-share hospital program. On average, adding a single Medicaid patient day in fiscal year 2017 will increase most hospitals’ Medicare payments by more than $300. When added to Medicaid payments, these payments often cause Medicaid patients to be profitable for hospitals. In contrast, adding a single charity care day in the same year will decrease overall Medicare payments by about $20 on average. The Centers for Medicare and Medicaid Services recently announced a proposal to shift some Medicare payments from supporting hospitals’ costs for Medicaid patients to directly supporting their costs for uncompensated care. If that proposal is adopted, hospitals’ profits on Medicaid patients would decrease, but their losses on care for the uninsured would be reduced.

Source: Contrary To Popular Belief, Medicaid Hospital Admissions Are Often Profitable Because Of Additional Medicare Payments


American Economic Association

December 2, 2016

This study evaluates how large changes in public health insurance coverage affect provider behavior and patient wait times by analyzing a common type of primary care: dental services. When states expand coverage of dental services to adult Medicaid beneficiaries, dentists’ participation in Medicaid increases and dentists see more publicly insured patients. Dentists supply more visits but only modestly increase the amount of time spent working. They achieve this in part by making greater use of dental hygienists. Wait times increase modestly, with the largest increases in wait times observed in states with restrictive scope of practice laws governing dental hygienists.

Source: American Economic Association


New Gruber Study Raises Major Questions About ACA’s Medicaid Expansion | Mercatus Center

November 30, 2016

A new study by Jonathan Gruber, one of the Affordable Care Act’s (ACA) chief economic architects, suggests that roughly two-thirds of new Medicaid enrollees in 2014 were eligible for the program under previous state eligibility criteria—meaning that they were not made eligible by the ACA. If accurate, then a much smaller share of new Medicaid enrollees were made eligible for the program by the ACA than Washington experts commonly believe. For example, the Congressional Budget Office’s (CBO) most recent projection is that only one of six new Medicaid enrollees were eligible for the program before the ACA.

Source: New Gruber Study Raises Major Questions About ACA’s Medicaid Expansion | Mercatus Center


Hundreds on Medicaid waiting list in Illinois die while waiting for care | Illinois Policy | Illinois’ comeback story starts here

November 25, 2016

The state’s most recent enrollment reports show more than 650,000 able-bodied adults have enrolled in Medicaid since the Obamacare expansion, and this enrollment shows no sign of slowing down. This is nearly twice as many adults as the state said would ever enroll and more than the state said would ever even be eligible.

Expansion costs are also significantly over projections. Despite promises from the administration of former Gov. Pat Quinn that total expansion costs would “only” hit $2.7 billion in the first two years, costs actually came in at $4.7 billion – 70 percent higher than promised.

Source: Hundreds on Medicaid waiting list in Illinois die while waiting for care | Illinois Policy | Illinois’ comeback story starts here


Overview of Medicaid Per Capita Cap Proposals | The Henry J. Kaiser Family Foundation

November 12, 2016

The House Republican Plan (“A Better Way”) released on June 22, 2016, includes a proposal to convert federal Medicaid financing from an open-ended entitlement to a per capita allotment or a block grant (based on a state choice).1  This proposal is part of a larger package designed to replace the Affordable Care Act (ACA) and reduce federal spending for health care.  Often tied to deficit reduction, proposals to convert Medicaid’s financing structure to a per capita cap or block grant have been proposed before.  Such changes represent a fundamental change in the financing structure of the program with major implications for beneficiaries, providers, states and localities.

Source: Overview of Medicaid Per Capita Cap Proposals | The Henry J. Kaiser Family Foundation


Prospects for Care Coordination for Children with Medical Complexity – AAF

November 10, 2016

While most children covered by Medicaid require only routine and inexpensive medical services, some complex cases require considerable medical coordination and significant resources.

Coordinating care between medical facilities and employing capitated payments, shared savings models, or other incentive-based payments could improve medical outcomes and save both federal and state Medicaid dollars.

Proposed changes to the care coordination of medically complex children covered by Medicaid could save as much as $13 to $16 billion over the first 10 years of implementation, and has the potential to save more in future years.

Source: Prospects for Care Coordination for Children with Medical Complexity – AAF