White House Report: Consequences of Medicaid Expansion Decision in Texas

On June 4, 2015, the White House Council of Economic Advisers (CEA) released estimates of the health and economic benefits if Texas decides to expand Medicaid under the Affordable Care Act.

As Chairman of the Council of Economic Advisers Jason Furman wrote, the report “leaves no doubt that the consequences of States’ decisions are far-reaching, with major implications for the health of their citizens and their economies.”

Texas’s decisions to expand Medicaid would have major health benefits for its low-income citizens, including:

·         Greater insurance coverage: Expanding Medicaid will increase the number of the State’s citizens with insurance coverage. The report cites estimates that if Texas expanded Medicaid, an additional 1,107,000 people would have insurance coverage in 2016 [Table 1]. 

·         Improved access to care: Expanding Medicaid improves access to needed medical services, including primary and preventive care. The report estimates the number of additional Texas citizens that would get their cholesterol checked and receive a mammogram or pap smear each year [Table 2]. It also estimates the number of additional people who would receive all needed care and have a usual source of clinic care if Texas expanded Medicaid [Table 3].

·         Better health: By improving access to care, expanding coverage through Medicaid improves mental and physical health. The report estimates that if Texas expanded Medicaid, 147,000 additional individuals would report being in good (or better) health and 101,000 fewer individuals would experience symptoms of depression [Table 4].

·         Greater financial security: Expanding Medicaid reduces the risk of financial hardship due to sickness. The report estimates that if Texas expanded Medicaid, 157,400 fewer people will have trouble paying other bills due to the burden of medical costs [Table 5].

The report also finds that Texas’s decision to expand Medicaid would generate important economic benefits:

·         A higher standard of living: States that expand Medicaid bring billions of dollars into their economies. That funding boosts the standard of living of the State’s citizens both by improving the lives of the newly-insured and by reducing the burden of uncompensated care for providers, taxpayers, and the privately insured. The report estimates that by not expanding Medicaid, Texas will miss out on $5.44 billion in federal funding in 2016 [Table 6].

·         Lower uncompensated care: Uncompensated care costs would be $1.17 billion lower in 2016 if expanded coverage was fully in effect in Texas [Table  6].

“The administration is willing to work with any state interested in expanding Medicaid, said Vikki Wachino Acting Director, Center for Medicaid and CHIP Services. “We are committed to supporting state flexibility and working with states on innovative solutions that expand Medicaid to low-income individuals in accordance with the law’s goals and consumer protections, while securing quality, affordable health coverage and growing a state’s economy.”

Thanks to the Affordable Care Act, states have new opportunities to expand Medicaid coverage to individuals with family incomes at or below 133 percent of the federal poverty level (generally $32,253 for a family of four in 2015). Health care costs for people made newly eligible through the Medicaid expansion is paid for with 100 percent federal funds in calendar years 2014‐2016, 95 percent in calendar year 2017, 94 percent in calendar year 2018, 93 percent in calendar year 2019, and 90 percent in calendar years 2020 and beyond.

A separate report released today by the U.S. Department of Health and Human Services (HHS) shows that 12.2 million additional Americans nationwide, including 213,767 people in Texas, now have affordable health coverage through Medicaid and the Children’s Health Insurance Program (CHIP) in March 2015 compared to before the start of the first Marketplace open enrollment period in October 2013.  This monthly report also shows a state by state breakdown in enrollment increases as of March 2015. 

To date, 28 states plus DC have expanded Medicaid under the Affordable Care Act. However, 22 States—including many of the States that would benefit most—have not yet seized this opportunity (although Montana has passed legislation to expand Medicaid and is working with the Centers for Medicare and Medicaid Services to implement its expansion). Researchers at the Urban Institute estimate that, if these States do not change course, 4.3 million of their citizens will be deprived of health insurance coverage in 2016.

The full CEA report provides a detailed discussion of the evidence and methodology used to produce these estimates and State-by-State tables breaking down these and other consequences of Medicaid expansion. It is available for download here: http://www.whitehouse.gov/sites/default/files/docs/medicaidmissedopportunities2015_final_v3.pdf

The monthly HHS report on state Medicaid and Children’s Health Insurance Program (CHIP) data is available here:  http://medicaid.gov/medicaid-chip-program-information/program-information/medicaid-and-chip-enrollment-data/medicaid-and-chip-application-eligibility-determination-and-enrollment-data.html