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Why Mayors Want States To Expand Medicaid: New Local ‘Coverage Gap’ Estimates



February 4th, 2014

Increasingly, whether or not to expand Medicaid under the Affordable Care Act (ACA) is being framed as a local issue. The mayors of AtlantaPhiladelphia, and Dallas, among others, are calling for expansion of the program in their states.

Now, the first-ever estimates of the number of poor adults being left out of Medicaid coverage in cities and rural areas shed light on why these mayors and other local leaders are speaking out.

The Dallas Fort Worth area is home to 357,000 poor uninsured adults who do not have access to Medicaid coverage because Texas has chosen not to implement the Medicaid expansion under the ACA; in Atlanta and Philadelphia, the numbers affected are 327,000 and 115,000, respectively.

Mayors’ concerns. A recent post on The Atlantic Cities blog lays out the challenges mayors of big cities are facing in states that are not expanding Medicaid under the ACA. The concerns of mayors go beyond their low-income constituents’ health care access and financial well-being to the inequities created by those with higher incomes having access to subsidized coverage, while their poorest residents will not.

They are also worried about the financial viability of their public hospitals and health systems that serve not only city residents who are uninsured, but also those who reside across the region and the state. Medicaid and Medicare payments to these and other disproportionate share hospitals that serve the indigent will be reduced as part of the ACA. As these payments dwindle in the coming years, many public urban and rural hospitals will face more economic constraints, and mayors and county administrators are concerned for their survival.

And it is not as though these local areas are off the hook for providing care. Eight of the 25 states that are not expanding Medicaid require counties to contribute a share of local Medicaid costs and 15 require local jurisdictions to maintain indigent care programs. Expanding the Medicaid program could provide these local areas with the fiscal support they need to sustain the strong public health safety net services they have been providing.

The coverage gap landscape. Previous estimates by the Urban Institute have shown that there are 5.8 million uninsured poor people who are being left with no new financial assistance for health insurance coverage because they live in a state that is not expanding the Medicaid program. These new estimates from the Urban Institute show that everyone’s hometown has poor uninsured adults living in the so-called coverage gap in states that are not expanding Medicaid.

Table 1 shows the 10 metropolitan areas with the largest number of poor uninsured adults who will not be eligible for Medicaid or subsidized marketplace coverage because their state has not expanded Medicaid under the ACA.

Kenney-Table1-uninsured

But smaller cities and rural counties will face similar challenges and have a smaller tax base to support public and rural hospitals and health systems. Not surprisingly, small city mayors and rural county administrators are also speaking out. Expanding the Medicaid program in all states would provide substantial financial relief to public and private providers who treat uninsured patients across the country.

A number of states are still considering whether to expand their Medicaid program under the ACA. Recent news reports suggest that the governors and legislatures of Nebraska, Missouri, Pennsylvania, Virginia, and Utah are continuing the debate in this year’s upcoming legislative sessions.  No doubt many mayors and county officials in these states will be making their voices heard in the coming year. These new estimates will allow them to more accurately quantify the magnitude of the problem they are facing.

Acknowledgment: These estimates build on the Urban Institute’s ACS Medicaid and CHIP Eligibility Model, which was developed by Victoria Lynch with funding from the Robert Wood Johnson Foundation.  The authors appreciate the analytic contributions of Matthew Buettgens, Michael Huntress, Victoria Lynch, Tim Meko, and Dean Resnick.

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