The Effects of Medicaid Expansion under the ACA: Updated Findings from a Literature Review
A substantial body of research has investigated effects of the Medicaid expansion under the Affordable Care Act (ACA) on coverage, access to care, and various economic measures. These findings can inform understanding of the broader effects of the ACA and ongoing debate over ACA repeal, including the Medicaid expansion.
This issue brief summarizes findings from 153 studies of the impact of state Medicaid expansions under the ACA published between January 2014 (when the coverage provisions of the ACA went into effect) and June 2017.1 It includes peer-reviewed studies as well as freestanding reports, government reports, and white papers published by research and policy organizations, using data from 2014 or later. This brief only includes studies that examine impacts of the Medicaid expansion; it excludes studies on impacts of ACA coverage expansions generally (not specific to Medicaid expansion alone) and studies investigating potential effects of expansion in states that have not (or had not, at the time of the study) expanded Medicaid. Findings are separated into three broad categories: Medicaid expansion’s impact on coverage; access to care, utilization, affordability, and health outcomes; and economic outcomes for the expansion states. The Appendix provides a list of citations for each of the included studies, grouped by the three categories of findings.
|With ACA repeal and replacement remaining a priority for the Trump Administration and Congress, this research shows that gains in coverage, improvements in access and families’ financial security, as well as economic benefits to states and providers are at stake if the Medicaid expansion is repealed.
Impacts on Coverage
Studies show that Medicaid expansion results in significant coverage gains and reductions in uninsured rates.
- States expanding their Medicaid programs under the ACA have seen large increases in Medicaid enrollment, driven by enrollment of adults made newly eligible for Medicaid as well as enrollment growth among individuals who were previously eligible for but not enrolled in Medicaidexperienced slower enrollment growth.2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22
- Numerous analyses demonstrate that Medicaid expansion states experienced large reductions in uninsured rates and that these reductions significantly exceed those in non-expansion states.23,24,25,26,27,28,29,30,31,32,33,34,35,36,37,38,39,40,41,42,43,44,45,46
- The sharp declines in uninsured rates among the low-income population in expansion states are widely attributed to gains in Medicaid coverage.52,53,54,55,56
- Studies exploring the potential for Medicaid expansion to “crowd-out” private insurance have found mixed results, with most showing no evidence of “crowd-out” and some showing slight declines in private coverage in expansion states following expansion.57,58,59,60,61,62,63,64
Similar coverage gain patterns have occurred within specific vulnerable populations.
- While many studies focused on the low-income population broadly, several studies identified larger coverage gains in expansion versus non-expansion states for specific vulnerable populations, including young adults, prescription drug users, people with HIV, veterans, parents, mothers, children, low-income workers, low-educated adults, early retirees, and childless adults with incomes under 100% of the Federal Poverty Level (FPL).65,66,67,68,69,70,71,72,73,74,75,76,77,78
- Multiple recent analyses demonstrate that Medicaid expansion is having a disproportionately positive impact in rural areas in expansion states, where growth in Medicaid coverage and declines in uninsured rates have exceeded those in metropolitan areas in expansion states and both rural and metropolitan areas in non-expansion states. One study found higher Medicaid growth rates in metropolitan counties compared to rural counties in both expansion and non-expansion states, but the geographic differential in growth rates was much less dramatic in expansion states and analysis at the state level showed much variability across the states.79,80,81,82
- Two studies showed that this trend of larger uninsured rate reductions and Medicaid coverage gains in expansion states compared to non-expansion states occurred across the major racial/ethnic categories. Additional research also suggests that Medicaid expansion has helped to reduce disparities in coverage by income, age, and race/ethnicity.83,84,85,86,87,88
States implementing the expansion through a waiver have seen similar gains in coverage, but some provisions in these waivers may present barriers to coverage.
- Studies show that states expanding Medicaid through Section 1115 waivers have experienced coverage gains that are similar to gains in states implementing traditional Medicaid expansions. Research comparing Arkansas (which expanded through a premium assistance model) and Kentucky (which expanded through a traditional, non-waiver model) showed no significant differences in uninsured rate declines between 2013 and 2015 in the two states. An analysis of expansion waiver programs in Michigan and Indiana showed that both states experienced uninsured rate reductions between 2013 and 2015 that were higher than the average decrease among expansion states as well as large gains in Medicaid enrollment.89,90,91,92
- Data from Indiana, which implemented the expansion through a Section 1115 waiver, show that its required monthly contributions may have created an enrollment barrier for some adults. In the Healthy Indiana Plan (HIP) 2.0 Medicaid expansion program, individuals above 100% FPL are either not enrolled or disenrolled from HIP 2.0 coverage for unpaid monthly contributions. A report assessing the program showed that between February 1, 2015 and November 30, 2016, 57,189 members were disenrolled or not enrolled due do non-payment (representing 29% of those that could be affected by the policy).93
- Evidence also suggests that beneficiaries and other stakeholders often do not fully understand complex enrollment policies such as the HIP 2.0 monthly contribution policy, and these policies can deter eligible people from enrolling in coverage. The March 2017 HIP 2.0 evaluation found that 14% of all HIP enrollees above 100% FPL, 33% of individuals who were disenrolled for not making a monthly contribution, and 40% of individuals who were not enrolled because they did not make a first monthly contribution reported being unaware that they could be disenrolled for non-payment.94,95
Impacts on Access to Care, Utilization, Affordability, and Health Outcomes
Most research demonstrates that Medicaid expansion positively impacts access to care and utilization of health care services among the low-income population, but some studies have not identified significant effects in these areas.
- Many expansion studies point to improvements across a wide range of measures of access to care as well as utilization of some medications and services. Some of this research also shows that improved access to care and utilization is leading to increases in diagnoses of certain chronic conditions and in the number of adults receiving consistent care for a chronic condition.96,97,98,99,100,101,102,103,104,105,106,107,108,109,110,111,112,113,114,115,116,117,118,119,120,121,122,123,124,125,126,127,128,129,130,131,132,133,134 For example:
- One study found that Medicaid expansion was correlated with increased heart transplant listing rates for African American patients (both overall and among Medicaid enrollees, specifically).135
- Recent evidence demonstrates that compared to non-expansion states, Medicaid expansion states have seen greater improvements in access to medications and services for the treatment of behavioral and mental health conditions. This evidence includes studies that have shown that Medicaid expansion is associated with increases in Medicaid-covered prescriptions for and Medicaid spending on medications to treat opioid use disorder and opioid overdose.136,137,138,139,140,141,142
- Studies conducted in 2017 began to explore the effect of the Medicaid expansion on quality of care. One study found that at federally funded community health centers, expansion was associated with improved quality on four of eight measures examined: asthma treatment, Pap testing, body mass index assessment, and hypertension control. Another study found some improvement in perceived quality of care associated with expansion in 2015, but this result did not persist in 2016.143,144
- Some studies point to improvements in patterns of use of emergency departments (EDs). Two recent single-state studies in Maryland and Illinois found declines in uninsured ED visits and increases in Medicaid-covered ED visits following expansion implementation. The Maryland study found no significant relationship between Medicaid expansion and changes in total ED volume by hospital. The Illinois study found an increase in total ED visits after ACA implementation, but this included an increase in visits by individuals with private coverage. One study in a single hospital in Maryland found that, in the year after expansion, there was a small but statistically significant reduction in the proportion of ED patients that were high utilizers and a reduction in visits to the ED for ambulatory care sensitive conditions. However high utilizers remained more likely than low utilizers to have ED visits for ambulatory care sensitive conditions before and after Medicaid expansion.145,146,147
- Two studies found that Medicaid expansion was associated with declines in hospital length-of-stay for Medicaid patients. Another analysis found that, contrary to past studies associating Medicaid insurance with longer hospitalizations and higher in-hospital mortality, the shift in payer mix in expansion states (increase in Medicaid discharges and decrease in uninsured discharges) did not influence length of stay or in-hospital mortality for general medicine patients at academic medical centers.148,149,150
- Evidence suggests that beneficiaries and other stakeholders may lack understanding of some waiver provisions designed to change utilization or improve health outcomes. Multiple studies have demonstrated confusion among beneficiaries, providers, and advocates in expansion waiver states around the basic elements of the programs or requirements for participation, which has resulted in increased costs to beneficiaries, low participation, or programs not operating as intended in other ways.151,152,153
- While a few studies did not find significant positive effects of expansion on certain measures of access or utilization, in many cases these results may reflect the additional time needed for persons to enroll in Medicaid and establish care following initial expansion implementation. Authors of early studies using 2014 data note that changes in utilization may take more than one year to materialize. Consistent with this premise, a longer-term study found improvements in measures of access to care and financial strain in year two of the expansion that were not observed in the first year.154,155,156,157,158
- While some research indicates that provider shortages are a challenge in certain contexts, many studies show that providers have expanded capacity and are meeting increased demands for care.159,160,161,162,163,164,165,166,167,168,169,170,171,172,173,174,175,176,177,178 For example:
- One study found that Medicaid expansion was associated with longer wait times for appointments, suggesting remaining access challenges despite improvements in coverage and access measures.179
- In contrast, another recent study found that Medicaid primary care appointment availability increased significantly in the five expansion states included in the analysis, whereas there were no significant changes in appointment availability in the non-expansion states studied.180
- An additional study found improvements in receipt of checkups, care for chronic conditions, and quality of care even in areas with primary care shortages, suggesting that insurance expansions can have a positive impact even in areas with relative shortages.181
Research suggests that Medicaid expansion improves the affordability of care and financial security among the low-income population.
- Several studies show that expansion states have experienced greater reductions in unmet medical need because of cost than non-expansion states. Although a few studies did not identify statistically significant differences in changes in unmet medical need due to cost between expansion and non-expansion states,some of these findings may have been affected by study design or data limitations.182,183,184,185,186,187,188,189,190,191,192
- Research suggests that expansion states have seen larger reductions in out-of-pocket medical spending than non-expansion states. One study found that previously uninsured prescription drug users who gained Medicaid coverage in 2014 saw, on average, a $205 reduction in annual out-of-pocket spending in 2014.193,194
- Multiple studies found larger declines in trouble paying as well as worry about paying future medical bills in expansion states relative to non-expansion states.195,196,197,198,199,200,201 For example:
- One study found that, among those residing in areas with high shares of low-income, uninsured individuals, Medicaid expansion significantly reduced the number of unpaid bills and the amount of debt sent to third-party collection agencies.202
- A study of Ohio’s Medicaid expansion found that the percentage of expansion enrollees with medical debt fell by nearly half since enrolling in Medicaid (55.8% had debt prior to enrollment, 30.8% had debt at the time of the study).203
Continually emerging research has documented improvements in self-reported health following Medicaid expansion, and a new 2017 study found that Medicaid expansion was associated with improved health outcomes for cardiac surgery patients.
- Multiple studies have found improvements in measures of self-reported health following Medicaid expansions, and additional research has documented provider reports of newly eligible adults receiving life-saving or life-changing treatments that they could not obtain prior to expansion.204,205,206,207,208
- A recent 2017 study found that Medicaid expansion was associated with improved health outcomes for cardiac surgery patients, including a significant decrease in predicted preoperative risk of morbidity or mortality and a decreased risk-adjusted rate of postoperative major morbidity.209
- Four analyses did not find significant changes in self-reported health status. Given that it may take additional time for measureable changes in health to occur, researchers suggest that further work is needed to provide longer-term insight into expansion’s effects on self-reported health and health outcomes.210,211,212,213
Analyses find positive effects of expansion on multiple economic outcomes, despite Medicaid enrollment growth initially exceeding projections in many states.
- National, multi-state, and single state studies show that states expanding Medicaid under the ACA have realized budget savings, revenue gains, and overall economic growth. A 2016 study found that growth in state Medicaid spending in expansion states has been lower relative to non-expansion states, but an uptick was projected for fiscal year (FY) 2017 primarily due to the phase-down in the federal share for the expansion population from 100% to 95%.214,215,216,217,218,219,220,221,222,223,224,225
- New national research found that there were no significant increases in spending from state funds as a result of Medicaid expansion and no significant reductions in state spending on education, transportation, or other state programs as a result of expansion during FYs 2010-2015.226
- A Louisiana annual report on Medicaid expansion reported that expansion saved the state $199 million in FY 2017 due to multiple factors, including the higher federal match rate for Medicaid populations that were previously funded at the regular state match rate, additional revenue from a premium tax on managed care organizations, and a decrease in state disproportionate share payments to hospitals as the uninsured population decreased.227
- A study on Montana revealed that Medicaid’s role in the financing of substance use disorder (SUD) services is growing as a direct result of the state’s decision to expand Medicaid and the concomitant decision to provide full SUD benefits to previously eligible as well as expansion adults. As Medicaid covers a larger share of SUD treatment costs, federal Medicaid dollars replace federal block grant and state dollars previously used to fund services for uninsured Montanans with SUD.228
- National studies have found lower Medicaid spending per enrollee for the new ACA adult eligibility group compared to traditional Medicaid enrollees and that per enrollee costs for newly eligible adults have declined over time since initial implementation of the expansion.229,230,231
- One analysis found that in 2014, among those states reporting both spending and enrollment data, spending per enrollee for the new adult group was much lower than spending per enrollee for traditional Medicaid enrollees.232
- A June 2017 study showed that per enrollee Medicaid spending declined in expansion states (-5.1%) but increased in non-expansion states (5.1%) between 2013 and 2014. Researchers attributed these trends to the ACA Medicaid expansion, which increased the share of relatively less expensive enrollees in the Medicaid beneficiary population mix in expansion states.233
- The 2016 Actuarial Report on the Financial Outlook for Medicaid shows that while the average per enrollee costs for newly eligible adults in initial years following expansion were higher than for previously eligible adults, these per enrollee costs have declined over time as states have adjusted capitation rates to better reflect actual use. By 2018, the cost for newly eligible adults is projected to be less than that of previously eligible adults.234
- Research suggests that Medicaid expansion may contribute to lower Marketplace premiums—one study found that Marketplace premiums are about 7% lower in expansion compared to non-expansion states. The study authors suggested that the difference in premiums reflects a difference in risk pool between expansion and non-expansion states, where individuals between 100 and 138% FPL make up a greater share of Marketplace enrollment in non-expansion compared to expansion states.235,236
- An Arkansas-specific study showed that the “private option” expansion has helped to boost the number of carriers offering Marketplace plans statewide, generated a younger and relatively healthy risk pool in the Marketplace, and contributed to a 2% drop in the average rate of Marketplace premiums between 2014 and 2015.237
Medicaid expansion results in reductions in uncompensated care costs for hospitals and clinics.
- Research shows that Medicaid expansions result in reductions in uninsured hospital visits and uncompensated care costs, whereas providers in non-expansion states have experienced little or no decline in uninsured visits and uncompensated care. One study suggested that Medicaid expansion cut every dollar that a hospital in an expansion state spent on uncompensated care by 41 cents between 2013 and 2015, corresponding to a reduction in uncompensated care costs across all expansion states of $6.2 billion over that period.238,239,240,241,242,243,244,245,246,247,248,249,250,251,252,253,254,255,256,257,258,259,260,261,262
- Recent evidence suggests that Medicaid expansion significantly reduced variation in provision of uncompensated care between hospitals that treat a disproportionate share of low-income patients (DSH hospitals) and those that do not, with DSH hospitals experiencing significantly larger reductions in uncompensated care days per bed.263
- Some studies demonstrate that Medicaid expansion has significantly improved hospital operating margins. A recent analysis found that while all types of hospitals in expansion states experienced reductions in uncompensated care costs and increases in Medicaid revenue compared with their counterparts in non-expansion states, expansion’s effects on margins were strongest for small hospitals, for-profit and non-federal-government-operated hospitals, and hospitals located in non-metropolitan areas.264,265,266
Studies find that Medicaid expansion has had positive or neutral effects on employment and the labor market.
- State-specific studies have documented or predicted significant job growth resulting from expansion. A study in Colorado found that the state supports 31,074 additional jobs due to Medicaid expansion as of FY 2015-2016, and a study in Kentucky estimated that expansion would create over 40,000 jobs in the state through SFY 2021 with an average salary of $41,000.267,268,269
- No studies have found negative effects of expansion on employment or employee behavior. Studies examining employment rates and other measures such as transitions from employment to non-employment, the rate of job switches, transitions from full- to part-time employment, labor force participation, and usual hours worked per week have not found significant effects of Medicaid expansion. One study showed that adults with disabilities living in expansion states are significantly more likely to be employed and less likely to be unemployed due to disability compared to adults with disabilities in non-expansion states. 270,271,272,273,274
- In an analysis of Medicaid expansion in Ohio, most expansion enrollees who were unemployed but looking for work reported that Medicaid enrollment made it easier to seek employment. Over half of expansion enrollees who were employed reported that Medicaid enrollment made it easier to continue working.275
- One study found an association between Medicaid expansion and volunteer work (both formal volunteering for organizations and informally helping a neighbor), with significant increases in volunteer work occurring among low-income individuals in expansion states in the post-expansion period (through 2015) but no corresponding increase in non-expansion states. The researchers connect this finding to previous literature showing an association between improvements in individual health and household financial stabilization and an increased likelihood of volunteering.276
- An additional analysis found that Medicaid expansion is associated with increased responsiveness of the program to meet coverage needs during periods of high unemployment.277
Conclusion and Implications for ACA Repeal Debate
As a whole, the large body of research on the effects of Medicaid expansion under the ACA suggests that expansion has had largely positive impacts on coverage; access to care, utilization, and affordability; and economic outcomes, including impacts on state budgets, uncompensated care costs for hospitals and clinics, and employment and the labor market. With ACA repeal and replacement remaining a priority for the Trump Administration and Congress, these findings suggest that gains in coverage and access as well as economic benefits to states and providers are at stake if the Medicaid expansion is repealed.Appendix: Study List by Category