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Oregon Study No Reason to Change Course on Medicaid Expansion

Recently, as part of a larger study that examined the impact of Oregon’s 2008 Medicaid expansion, researchers compared the people in that state who gained public health coverage with the people who remained uninsured — and found that the first group made 40 percent more trips to emergency departments.

Affordable Care Act (ACA) critics have immediately seized on this as an iron-clad excuse for not moving forward with the Medicaid expansion option.  The findings of this study actually underscore the need for expanding access to affordable health insurance coverage.

First things first – the results of this study are unsurprising.  When previously uninsured people get covered, their utilization goes up.  This is true for the privately insured as well as the publicly insured.  (Read the Center for Studying Health System Change research brief, published December 2013.) It isn’t just that people with Medicaid use more resources once they become insured, it’s that all people get checked out when they obtain health insurance, whether it is publicly or privately financed.  There is pent-up need – or, in other words, a tremendous amount of demand – in our health care system.

In fact, this is such expected behavior that the Medicaid expansion that is included in the ACA is designed to accommodate it. For the first three years of the Medicaid expansion, federal financing pays 100 percent of the cost. In other words, the ACA deliberately puts all of the financial exposure for initial increased utilization, expected in the first few years of new coverage, solely on the federal dime.

Moreover, increased utilization is temporary. The increase in utilization will subside as people have their previously unmet health care needs addressed, as people formerly outside the health care system learn where and how to appropriately access primary care, and as people and the health care delivery system in general become accustomed to a broader distribution of health insurance coverage in our communities.  This was certainly borne out in Massachusetts, where after an initial increase in utilization following universal coverage, emergency room (ER) utilization declined, mostly attributable to fewer people seeking non-emergent care in the ER.  (Read the Massachusetts ER study here.)   The Oregon study lasted only 18 months, so it is too short to show any subsequent plateau or decline.

Significantly expanding access to affordable health insurance to low-income people in the Granite State will not instantaneously reform the health care delivery system.  People won’t immediately know when and where to get primary care simply because they have an insurance card.  Habits and comfort zones take time to change for patients and providers.  New Hampshire is just now initiating a managed care system into its Medicaid program.  If the program is successful, it should be able to effectively connect enrollees to primary care settings and teach them how and when to use them.

This leads to the final point:  reforming how health insurance is provided – which is the overarching goal of the ACA – is not the same as reforming the overall health care delivery system.  If we want people to use the system in a more efficient and cost-effective way, we must reform how health care is delivered.  However, New Hampshire must tackle the threshold issue of moving most of the participants in our health care system into coverage before it can begin long-term reform of the system and enjoy the benefits of smarter, more efficient use of it.

 

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House Fails to Pass State Budget, Process Moves to Senate

6 Apr 2017

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The New Hampshire House, for the first time in recent history, has opted to not pass the State Budget bills, introduced as House Bill 1 and House Bill 2. April 6 was the deadline set by legislative leadership to pass those bills out of the House and move them to the Senate, a day often referred to as “crossover.” The Senate phase of the budget begins after April 6, and the Senate has expressed an intent to move forward with a budget in the Senate Finance Committee. However, with no House Bill 1 or House Bill 2 crossing over, the Senate has to forge an alternative path to debate and amend the budget.