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Opting Out Of Medicaid Expansion: The Health And Financial Impacts


January 30th, 2014

The Affordable Care Act (ACA) was designed to increase access to health insurance by: 1) requiring states to expand Medicaid eligibility to people with incomes less than 138 percent of the Federal Poverty Level (FPL) ($19,530 for a family of three in 2013), with the cost of expanded eligibility mostly paid by the federal government; 2) establishing online insurance “exchanges” with regulated benefit structures where people can comparison shop for insurance plans; and 3) requiring most uninsured people with incomes above 138 percent FPL to purchase insurance or face financial penalties, while providing premium subsidies for those up to 400 percent of FPL.

Recent studies suggest that Medicaid expansion will result in health and financial gains.  Older studies also found salutary health effects of expanded or improved insurance coverage, particularly for lower income adults. These studies also document an increase in utilization of most health care services. Most recently, the Oregon Health Insurance Experiment (OHIE) found a striking increase in emergency department use as well as other outpatient care.

The Supreme Court ruled in June 2012 that states may opt out of Medicaid expansion, and as of November 2013, 25 states have done so. These opt-out decisions will leave millions uninsured who would have otherwise been covered by Medicaid, but the health and financial impacts have not been quantified.

In this post, we estimate the number and demographic characteristics of people likely to remain uninsured as a result of states’ opting out of Medicaid expansion. Applying these figures to estimates of the effects of insurance expansion from prior studies, we calculate the likely health and financial impacts of states’ opt-out decisions.

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Medicare’s Rollout vs. Obamacare’s Glitches Brew


January 2nd, 2014

Editor’s note: In addition to Steffie Woolhandler (photo and bio above), this post is authored by David Himmelstein, a professor of public health at the City University of New York, a visiting professor of medicine at Harvard Medical School, and a cofounder of Physicians for a National Health Program with Woolhandler..

The smooth and inexpensive rollout of Medicare on July 1, 1966 provides a sharp contrast to the costly chaos of Obamacare.

We won’t rehearse the chaos part here, just the costs.

As of March, 2013, federal grants for Obamacare’s state exchanges totaled $3.8 billion. Spending for the federal exchange is harder to pin down because funding has come from multiple accounts, including: the $1 billion Health Insurance Implementation Fund; DHHS’ General Departmental Management Account and General Departmental Management Account; CMS’s Program Management Account and the Prevention and Public Health Fund. CMS estimates fiscal 2014 spending for the federally-operated exchanges at $2 billion. So it’s safe to say that the costs of getting the exchanges up and running, and (hopefully) enrolling 7 million people in the program’s first year will exceed $6 billion.

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The Uninsured After Implementation Of The Affordable Care Act: A Demographic And Geographic Analysis


June 6th, 2013

The Affordable Care Act (ACA) proposed expanding health insurance coverage by: 1) requiring states to offer Medicaid to people with incomes up to 138 percent (133 percent plus a 5 percent income disregard) of the federal poverty level (FPL), with most of this expansion funded federally; and 2) offering subsidies to help those with incomes up to 400 percent FPL purchase private insurance through newly created insurance exchanges. The Congressional Budget Office (CBO) estimated in March 2012 that the ACA would newly insure 30-33 million people, leaving 26-27 million uninsured in 2016.

In June 2012, however, the Supreme Court ruled that states may opt-out of Medicaid expansion. Since then, the governors of 14 states have announced their intention to opt-out, 6 are undecided, 3 are leaning against and 2 toward the expansion. Opt-outs will likely leave several million more uninsured, but little is known about who is likely to remain uninsured under the ACA.

To estimate the number and characteristics of US residents who will remain uninsured in 2016, we analyzed data from the Census Bureau’s 2012 Current Population Survey, a nationally representative survey of the non-institutionalized US population.

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Will Pay For Performance Backfire? Insights From Behavioral Economics


October 11th, 2012

Editor’s note: In addition to Steffie Woolhandler and Dan Ariely (photos and linked bios above), this post is authored by David Himmelstein, a professor at the CUNY School of Public Health at Hunter College.

Paying for performance (P4P) has strong intuitive appeal. Common sense and rigorous studies tell us that paying more for, say, angioplasties or immunizations yields more of them. So paying doctors and hospitals for better care, not just more of it, seems like a no-brainer. Yet while Medicare and many private insurers are charging ahead with pay-for-performance (P4P), researchers have been unable to show that it benefits patients.

Findings from the new field of behavioral economics may explain these negative results. They challenge the traditional economic view that monetary reward is either the only motivator or is simply additive to intrinsic motivators such as purpose or altruism. Studies have shown that monetary rewards can undermine motivation and worsen performance on cognitively complex and intrinsically rewarding work, suggesting that P4P may backfire.

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The Effect Of Physicians’ Electronic Access To Tests: A Response To Farzad Mostashari


March 12th, 2012

Our recent Health Affairs article linking increased test ordering to electronic access to results has elicited heated responses, including a blog post by Farzad Mostashari, National Coordinator for Health IT.  Some of the assertions in his blog post are mistaken.  Some take us to task for claims we never made, or for studying only some […]

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