Medicaid expansion ballot initiatives in four red states this fall could give huge wins for payers like Aetna, Anthem an Centene as well as investor-owned health systems such as HCA, LifePoint, United Health Services and Tenet, according to a new report by Height Capital Markets.
The analysts predicted voters in Idaho, Nebraska and Utah will likely approve ballot questions in November, which would add about 330,000 people to the program. Montana's vote to maintain Medicaid expansion is more likely to fail, which will force more than 91,000 off the rolls.
The Utah ballot question would have significant impacts on both health insurers and investor-owned hospitals. The Nebraska initiative is expected to help managed care organizations significantly, but the state doesn't have any investor-owned hospitals.
Medicaid expansion, which opens the program to people with incomes at or below 138% of the federal poverty level, was the major reason for coverage gains after the Affordable Care Act, providing health insurance to more than 14 million people.
If Nebraska approves expansion, Centene, UnitedHealthcare and WellCare will benefit. Molina Healthcare, which has a 30% share in Utah, would gain from expansion in that state, according to the report.
If all four ballot initiatives get the OK, only 14 states would not have expanded Medicaid. All of those states are either politically deep red or purple, but a potential blue wave in November could change the leadership and open up the potential for expansion in more areas.
Two states are already expected to expand Medicaid in 2019. Maine voters approved the move in 2016, but Republican Gov. Paul LePage has put up roadblocks to launching the program. His term ends in January, and Height Capital Markets expects the state will expand the program then.
The Virginia legislature approved expansion earlier this year to add 400,000 beneficiaries. Aetna, Anthem, Magellan and UnitedHealthcare will benefit most from expansion there, according to the report.
Beyond beefing up bottom lines, Medicaid expansion has generally improved care. A recent JAMA Network study found that hospitals in Medicaid expansion states saw fewer uninsured inpatients for major cardiovascular events within one year of expansion compared to non-expansion states.
A Health Affairs report from June found expansion improved access to care and quality of care. That analysis reviewed more than 70 studies on the subject and additionally found decreased hospital lengths-of-stay among newly insured beneficiaries.
Despite the positives associated with expansion, it’s also led states to scramble for ways to fund the program. In response, some states, such as Kentucky, received work requirement waivers that would require people on Medicaid work or perform volunteer duties. A federal judge rejected Kentucky's approval and CMS re-opened a request for comments on the plan. However, the agency may soon grant seven other states Medicaid waivers with work requirements.