Medicaid expansion would have extended coverage to 600,000 Americans, study finds
If 14 states that have yet to expand Medicaid had done so last year, the uninsurance rate would have fallen to 10.9%.
More Americans would have had access to health insurance without harming state budgets during the COVID-19 pandemic if every state had expanded Medicaid eligibility under the Affordable Care Act, according to a report from the Urban Institute.
“We find the COVID-19 pandemic has increased the impact of the ACA’s Medicaid expansion,” researcher Matthew Buettgens said. “If the 14 states that had not expanded Medicaid eligibility in 2020 had done so, the number of uninsured people would have dropped by 4.4 million in the last three quarters of the year, 600,000 more people than we estimated absent the pandemic. Further, young adults would experience the largest gains in health coverage.”
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As of December, 36 states and the District of Columbia had expanded Medicaid eligibility, while the remaining 14 states had not. Voters in two of these states, Missouri and Oklahoma, approved Medicaid expansion through referenda in 2020, but the expansions have not yet been implemented. If all 14 states had expanded Medicaid last year, it would have left 10.2 million uninsured people in those states, and the uninsurance rate would have fallen to 10.9%.
The study cites these additional benefits from Medicaid expansion:
- Expansion saves lives. At least two studies have found that health coverage under the ACA decreased mortality, and one found a statistically significant reduction in mortality in expansion states compared with non-expansion states.
- Expansion increases the financial security of the uninsured. Two studies found that Medicaid expansion improved financial security measures, such as credit scores, while reducing financial insecurity measures, such as medical debt collection balances.
- Expansion improves hospital finances. Studies have shown this is achieved through lowered uncompensated care costs.
Expansion also benefits state economies
A study in Montana found Medicaid expansion led to an additional $600 million circulating in the state’s economy each year, supporting 5,900 to 7,500 jobs and $350 million to $385 million in personal income. Additional research suggests that:
- State and local governments save on uncompensated care.
- States receive higher federal matching rates for some beneficiaries who, without expansion, would have been covered through pre-ACA Medicaid eligibility categories.
- As the federal government spends more on a state’s health care, its economic activity increases, thereby increasing tax revenue.
- State taxes on health-care providers and/or health coverage premiums increase revenue.
- Demand decreases for non-Medicaid state-funded programs for uninsured people with low incomes (separate from uncompensated care). Most states with comprehensive analyses project net fiscal gains from expansion, even after states begin paying 10% of costs for Medicaid expansion enrollees.
“A considerable body of research has documented the benefits of Medicaid expansion, and we find Medicaid expansion in the remaining states would make a greater difference during the pandemic,” Buettgens said. “Many states that have expanded Medicaid eligibility have found it resulted in net savings to the state, which is especially important given the strain the pandemic has placed on state and local budgets.”
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