Person:

Orav, Endel

Under the Affordable Care Act, thirty states and the District of Columbia have expanded eligibility for Medicaid, with several states using Medicaid funds to purchase private insurance (the “private option”). Despite vigorous debate over the use of private insurance versus traditional Medicaid to provide coverage to low-income adults, there is little evidence on the relative merits of the two approaches. We compared the first-year impacts of traditional Medicaid expansion in Kentucky, the private option in Arkansas, and nonexpansion in Texas by conducting a telephone survey of two distinct waves of low-income adults (5,665 altogether) in those three states in November–December 2013 and twelve months later. Using a difference-in-differences analysis, we found that the uninsurance rate declined by 14 percentage points in the two expansion states, compared to the nonexpansion state. In the expansion states, again compared to the nonexpansion state, skipping medications because of cost and trouble paying medical bills declined significantly, and the share of individuals with chronic conditions who obtained regular care increased. Other than coverage type and trouble paying medical bills (which decreased more in Kentucky than in Arkansas), there were no significant differences between Kentucky’s traditional Medicaid expansion and Arkansas’s private option, which suggests that both approaches improved access among low-income adults.

Major policy uncertainty continues to surround the Affordable Care Act (ACA) at both the state and federal levels. We assessed changes in health care use and self-reported health after three years of the ACA’s coverage expansion, using survey data collected from low-income adults through the end of 2016 in three states: Kentucky, which expanded Medicaid; Arkansas, which expanded private insurance to low-income adults using the federal Marketplace; and Texas, which did not expand coverage. We used a difference-in-differences model with a control group and an instrumental variables model to provide individual-level estimates of the effects of gaining insurance. By the end of 2016 the uninsurance rate in the two expansion states had dropped by more than 20 percentage points relative to the nonexpansion state. For uninsured people gaining coverage, this change was associated with a 41-percentage-point increase in having a usual source of care, a $337 reduction in annual out-of-pocket spending, significant increases in preventive health visits and glucose testing, and a 23-percentage-point increase in “excellent” self-reported health. Among adults with chronic conditions, we found improvements in affordability of care, regular care for those conditions, medication adherence, and self-reported health.

Importance Under the Affordable Care Act (ACA), more than 30 states have expanded Medicaid, with some states choosing to expand private insurance instead (the “private option”). In addition, while coverage gains from the ACA’s Medicaid expansion are well documented, impacts on utilization and health are unclear.

Objective To assess changes in access to care, utilization, and self-reported health among low-income adults in 3 states taking alternative approaches to the ACA.

Design, Setting, and Participants Differences-in-differences analysis of survey data from November 2013 through December 2015 of US citizens ages 19 to 64 years with incomes below 138% of the federal poverty level in Kentucky, Arkansas, and Texas (n = 8676). Data analysis was conducted between January and May 2016.

Exposures Medicaid expansion in Kentucky and use of Medicaid funds to purchase private insurance for low-income adults in Arkansas (private option), compared with no expansion in Texas.

Main Outcomes and Measures Self-reported access to primary care, specialty care, and medications; affordability of care; outpatient, inpatient, and emergency utilization; receiving glucose and cholesterol testing, annual check-up, and care for chronic conditions; quality of care, depression score, and overall health.

Results Among the 3 states included in the study, Arkansas (n=2890), Kentucky (n=2898, and Texas (n=2888), there were no differences in sex, income, or marital status. Respondents from Texas were younger, more urban, and disproportionately Latino compared with those in Arkansas and Kentucky. Significant changes in coverage and access were more apparent in 2015 than in 2014. By 2015, expansion was associated with a 22.7 percentage-point reduction in the uninsured rate compared with nonexpansion (P < .001). Expansion was associated with significantly increased access to primary care (12.1 percentage points; P < .001), fewer skipped medications due to cost (−11.6 percentage points; P < .001), reduced out-of-pocket spending (−29.5%; P = .02), reduced likelihood of emergency department visits (−6.0 percentage points, P = .04), and increased outpatient visits (0.69 visits per year; P = .04). Screening for diabetes (6.3 percentage points; P = .05), glucose testing among patients with diabetes (10.7 percentage points; P = .03), and regular care for chronic conditions (12.0 percentage points; P = .008) all increased significantly after expansion. Quality of care ratings improved significantly (−7.1 percentage points with “fair/poor quality of care”; P = .03), as did the share of adults reporting excellent health (4.8 percentage points; P = .04). Comparisons of Arkansas vs Kentucky showed increased private coverage in the former (21.7 percentage points; P < .001), increased Medicaid in the latter (21.3 percentage points; P  < .001), and higher diabetic glucose testing rates in Kentucky (11.6 percentage points; P = .04), but no other statistically significant differences.

Conclusions and Relevance In the second year of expansion, Kentucky’s Medicaid program and Arkansas’s private option were associated with significant increases in outpatient utilization, preventive care, and improved health care quality; reductions in emergency department use; and improved self-reported health. Aside from the type of coverage obtained, outcomes were similar for nearly all other outcomes between the 2 states using alternative approaches to expansion.

In recent years, policymakers have introduced unprecedented changes to Medicaid. As of April 2019, nine states have received approval by means of a federal waiver to implement work requirements in Medicaid, and six have applications pending.1 According to the Centers for Medicare and Medicaid Services, work requirements — also known as community engagement requirements — may promote better health and help beneficiaries escape poverty.2 However, critics dispute these claims3,4 and warn that the policy could lead to large coverage losses.5 Work requirements have been used previously in programs such as the Supplemental Nutrition Assistance Program and the Temporary Assistance for Needy Families program. Studies of those programs showed that work requirements produced modest, short-term increases in employment but no increases in income.6,7 The effects of work requirements in a health insurance program are unclear. In June 2018, Arkansas became the first state to implement work requirements in Medicaid. Medicaid beneficiaries 30 to 49 years of age were notified by the state (by mail and informational fliers) that they were required to work 80 hours per month, participate in another qualifying community engagement activity such as job training or community service, or meet criteria for an exemption such as pregnancy or disability.8 Three months of noncompliance or nonsubmission of monthly online reports within a year led to removal from Medicaid. By December, nearly 17,000 adults were notified by mail that they had been removed from Medicaid.9 In March 2019, a federal judge halted the program owing to concerns about its effect on coverage. Although several analyses have predicted various results of Medicaid work requirements,10-15 data from independent assessments since the policy took effect have been limited. Our objective was to assess early changes in insurance coverage and employment after implementation of the work requirements in Arkansas.

In June 2018, Arkansas became the first state to implement work requirements in Medicaid, requiring adults ages 30-49 to work 20 hours a week, participate in “community engagement” activities, or qualify for an exemption to maintain coverage. By April 2019, when a federal judge put the policy on hold, 18,000 adults had already lost coverage. We analyze the policy’s effects before and after these events, using a telephone survey in late 2019 of 2,706 low-income adults in Arkansas and three control states, compared to data from 2016 and 2018. We have four main findings. First, most of the Medicaid coverage losses in 2018 were reversed in 2019 after the court order. Second, work requirements did not increase employment over 18 months of follow-up. Third, 30- to 49-year-olds in Arkansas who had lost Medicaid in the prior year experienced adverse consequences – 50 percent reported serious problems paying off medical debt; 56 percent delayed care due to cost; and 64 percent delayed medications due to cost. These rates were significantly higher than among Arkansans who remained in Medicaid all year. Finally, awareness of work requirements remained poor, with more than 70 percent of Arkansans unsure whether the policy was in effect.