Pent-up needs may fuel Medicaid expansion costs: Avalere
An analysis by consulting firm Avalere Health of healthcare spending for people covered through the ACA's Medicaid expansion showed that claims costs increased over a two-and-a-half year period. The analysis of private Medicaid managed care plan data suggests the trend is caused by pent-up healthcare needs and intensifies over time as more money is spent on chronic care.
In other Medicaid news, 15 Medicaid recipients in Kentucky are suing HHS after the Trump administration offered the state a waiver to allow for a work requirement for Medicaid recipients. The lawsuit seeks to block the waiver and alleges the agency exceeded its authority when granting it.
- Meanwhile, the Associated Press reports that the Trump administration’s recent work requirement waiver may actually cause more Republican-led states to expand the program.
The Affordable Care Act’s Medicaid expansion measure — which allowed states to offer the public insurance to adults who earn less than 138% of the poverty level — insured more than 15 million people who were uninsured.
Avalere found the average monthly costs for those newly insured was $324 during the first six months in 2014 and then rose to $389 over a six-month period after two-and-a-half years. The report also found younger enrollees enrolled through the Medicaid expansion were more likely to drop coverage, leaving people with chronic healthcare needs, who are more expensive, in the risk pool.
Inpatient hospital and emergency room visits decreased over time, but chronic care services, including spending on prescription drugs, increased. Pharmacy costs nearly doubled over the timeframe analyzed, which is likely because the newly insured had untreated conditions that could have led to chronic illnesses.
Meanwhile, lawyers with the National Health Law Program and Southern Poverty Law Center are representing Kentucky Medicaid recipients suing over the recent work requirement waiver. The HHS granted a waiver to Kentucky this month that will let the state impose a work requirement. Kentucky estimates the plan will cut its Medicaid population by 100,000 recipients after five years and will save $2.4 billion. Democrats, disability advocates and activists for low-income Americans have bashed the work requirement.
In a twist, the work requirement waiver may tempt additional Republican-led states to expand Medicaid. Most states, including some conservative-leaning states like Kentucky, approved Medicaid expansion. However, Republican-led states are looking for ways to cut the size of the program and a work requirement may balance the needs to insure more people while increasing the number of employed.
There are at least nine other states interested in similar waivers. Health Affairs recently reported that 11 million Medicaid enrollees would be at risk of losing coverage if the work requirement spreads nationwide.