Implications of State Decisions to Expand or Not Expand Medicaid

The decision to expand or not expand Medicaid has had implications across the healthcare industry, and there are some results that are not entirely unexpected, explained Austin Frakt, PhD. For instance, studies have found that in non-expansion states, health insurance coverage rates are lower and grow slower than in expansion states. Additionally, the choice not to expand the federal program means a state is missing out on federal dollars, he said.

“So states that haven’t expanded, they’re not benefiting from that,” Dr Frakt said. “So you’re seeing hospitals with tighter margins, maybe negative margins, some closures in rural areas, and the state in general is not getting an economic boost that it would otherwise.”

The question is not so much “should we expand coverage?” as much as it is “what is the best way to go about bringing new insurance coverage to low-income Americans,” said Matt Salo. So even before the implementation of the Affordable Care Act and state decisions on Medicaid expansion, there were changes happening to state Medicaid programs, such as delivery system and payment reform.

One opportunity is maternity care, Margaret E. O’Kane, MHA, pointed out. More than half of births are in Medicaid, and there are opportunities to improve birth outcomes. Leah Binder echoed the sentiment. Her organization, The Leapfrog Group, has seen early elective deliveries drop through the efforts of some states that have made an effort to align the interests of Medicaid and private sector purchasers.

“It really is about creating the right synergy with the delivery system,” O’Kane said. “And the conditions on the ground in each state are different, and taking advantage of the natural resources that you might have in the state or the natural advantages, I think, is part of the magic.”