Medicaid Expansion

A South Dakota ballot initiative that would finally bring Medicaid expansion to the state triumphed in the midterm elections, passing with 56% of the vote. It’s the latest in a string of successful ballot initiatives in expansion holdout states — and perhaps the last. While there have been rallying cries of support for expansion in some of the 11 remaining holdout states, the efforts of Democratic governors and organizing committees working to get expansion on future ballots have been stymied for years.

At some point in the next year, it’s likely that Medicaid eligibility redeterminations will resume — a process that will be kicked off when the Biden administration declares an end to the COVID-19 public health emergency (PHE). Medicaid has hit record-high enrollment this year, meaning states and managed care organizations will have to contact more people than they ever have before in a short period of time; meanwhile, MCOs will also have to deal with looming cuts to reimbursement and rising provider rates.

Margins for MCOs seem likely to shrink. Provider rate increases are coming soon, though it’s likely that they will vary in timing and scope depending on market and contract cycles. However, the pricing effects of workforce shortages and inflation will impact every plan and provider, sources previously told AIS Health.

About 3.7 million people could gain access to health care if the current 12 nonexpansion states were to fully implement a Medicaid expansion in 2023, according to a recent Urban Institute analysis.

In the upcoming gubernatorial elections in November, Medicaid expansion could be a key issue in several nonexpansion states, including Wisconsin, Kansas and Georgia. All three states had several failed attempts to fully expand Medicaid eligibility.

Health care spending per person varied significantly across the nation in 2019, and differences between states grew across time, according to a recent Health Affairs study. State-level health care spending per person ranged from $7,250 in Utah to $14,500 in Alaska in 2019, while annualized growth rates per person ranged from 1.0% in Washington, D.C., to 4.2% in South Dakota from 2013 to 2019.

In 2019, Medicare and Medicaid spending combined accounted for more than one third of total health expenditures in most states, ranging from 27% in Alaska to 48% in Arkansas. The study shows that out-of-pocket spending varied more than overall spending. For example, while South Dakota’s overall health care spending is 50% higher than Arizona, the average South Dakotan spent nearly three times as much out-of-pocket per year ($4,600) compared to the average Arizonan ($1,700).

By no later than 2024, California will allow residents aged 26-50 with any immigration status to enroll in Medi-Cal, the state’s Medicaid program — making the state the first in the nation to allow all undocumented residents to enroll in safety-net insurance programs. State officials estimate that Medi-Cal enrollment statewide could grow by more than 700,000 as a result of the expansion, and follows a similar move last year to expand Medi-Cal eligibility to undocumented Californians aged 50 and over, a cohort of about 185,000 people, according to the office of Democratic Gov. Gavin Newsom.

That enrollment surge will likely come at the same time as state agencies and managed care organizations wind down record Medicaid enrollment backed by pandemic relief funds and the national suspension of eligibility redeterminations required by the federal pandemic response measures. The CEO of the state’s largest MCO, L.A. Care, tells AIS Health, a division of MMIT, that the insurer is staffing up to address the administrative challenges — and said the expansion should improve health outcomes for a group of residents who are underserved and disadvantaged by the current setup.

South Dakota voters just moved their state one step closer to expanding Medicaid through a ballot initiative, with over 67% of voters rejecting a proposed amendment to the state constitution that would have made Medicaid expansion prohibitively difficult to pass. The founder of a pro-expansion ballot initiative campaign tells AIS Health, a division of MMIT, that he’s optimistic about Medicaid expansion’s chances when it finally comes to a definitive vote in November.

If South Dakota does vote to expand Medicaid in the fall, more than 27,000 people could gain eligibility for the safety-net health insurance program, according to estimates from the Kaiser Family Foundation.

When the Biden administration ends the COVID-19 public health emergency (PHE), states will disenroll millions of Medicaid beneficiaries — and insurers will have to take Medicaid MCO members off their books. Experts tell AIS Health, a division of MMIT, that carriers can take steps to retain some of those members by helping them enroll in Affordable Care Act (ACA) marketplace coverage — but say the number of people who make the switch will be far lower than the number of people who joined the Medicaid rolls during the pandemic (see infographic).

Medicaid and individual exchange enrollment have both boomed with the higher federal funding that was included in the American Rescue Plan Act (ARPA) — and both segments’ total enrollment and enrollee profiles will change significantly when that extra funding ends.

Republican leaders in North Carolina, one of a dozen states that have yet to broaden access to Medicaid programs, say that they are now ready to embrace expansion, which may be a boon to its managed care organizations.

By widening Medicaid eligibility to limits allowed under the Affordable Care Act, North Carolina would enroll an additional 600,000 individuals, a sharp increase over the 2.7 million currently covered under Medicaid in the state, according to a summary of a draft bill first reported on by Axios.

In a May 25 press conference, state Senate leader Phil Berger called Medicaid expansion “the right thing for us to do,” citing the need for coverage for low-income individuals and families and the federal government’s responsibility to pick up 90% of costs for enrollees newly eligible under the expanded coverage guidelines, according to reports.

When the Biden administration ends the COVID-19 public health emergency (PHE), states will disenroll millions of Medicaid beneficiaries — and insurers will have to take Medicaid MCO members off their books. Experts tell AIS Health, a division of MMIT, that carriers can take steps to retain some of those members by helping them enroll in Affordable Care Act (ACA) marketplace coverage — but say the number of people who make the switch will be far lower than the number of people who joined the Medicaid rolls during the pandemic (see infographic).

Medicaid and individual exchange enrollment have both boomed with the higher federal funding that was included in the American Rescue Plan Act (ARPA) — and both segments’ total enrollment and enrollee profiles will change significantly when that extra funding ends.

Since taking office, the Biden administration has taken a hard line on Section 1115 Medicaid waivers, rescinding multiple demonstrations that were approved by the Trump administration and subsequently becoming ensnared in legal fights with Republican-leaning states. Such disputes may wind up being detrimental to Medicaid managed care organizations, which in some cases spent considerable resources on implementing waiver demonstration programs that may never come to fruition.

The latest legal conflict is in Georgia, where the state is trying to preserve an 1115 waiver that the Trump administration approved. Georgia’s waiver would have imposed premiums and work requirements on Medicaid beneficiaries, with the added twist of expanding Medicaid eligibility just for the population earning up to 100% of the federal poverty level — rather than 138% like with regular Medicaid expansion — and therefore receiving a smaller federal funding match.