What we know about how the structure of Marketplaces and Medicaid expansion affect enrollment

By Emma Sandoe

It is fairly obvious that states that expanded Medicaid saw greater enrollment in Medicaid after the opening of the Health Insurance Marketplaces in October 2013 than states that did not expand. CMS has been releasing monthly reports that indicate just that.

This also corresponds to the reductions in uninsurance. States that expanded Medicaid clearly have seen greater reductions in uninsurance than states that elected not to expand. The US Census Bureau recently posted the maps below in their blog “Research Matters.” Here is a map of the uninsurance reductions:

With the exceptions of states like Massachusetts that have already high levels of Medicaid expansion, it’s clear which states have chosen to expand Medicaid and which ones have not, but if you need the context, here is a map of states that have expanded Medicaid:

What is less known is information about who the people are that are enrolling in Medicaid and why states that appear similar are seeing varying levels of Medicaid participation rates. Last week, the Commonwealth Fund issued an article by Sara Rosenbaum et al. that found that states who have elected to implement their own insurance marketplace, rather than using the federal HealthCare.gov, saw more enrollment in their expanded Medicaid programs. Essentially, if a state elects to both to take up the Medicaid expansion and build their own Marketplace, more people saw Medicaid coverage than states that are electing to take up the expansion and use HealthCare.gov.

Of course this correlation should not be considered a causal reason for increased enrollment. The states that decided to let the federal government run their marketplace look very different from the states that built their own system. Looking into the states that saw large increases in Medicaid enrollment, many of the states electing to build their own marketplace include California, Massachusetts, and Oregon. These states generally have more social welfare programs and a larger social safety net. Meaning that there are other reasons that could have caused this increase over the difference in choice on state or federal marketplace. Some of these states took advantage of flexibilities provided by the Centers for Medicare & Medicaid Services (CMS) to ease the enrollment process. For example, states were given the option to integrate their SNAP (food stamps) system with their Medicaid systems to identify likely eligible enrollees. States that did not create their own marketplaces but expanded Medicaid oftentimes have not fully embraced the Affordable Care Act and have limited social welfare programs. For example, Indiana and Iowa had contentious debates over the expansion of Medicaid and their social welfare programs are seeing cuts while they are expanding Medicaid services.

However, looking back at the implementation of the HealthCare.gov, one issue that received less attention than the website glitches was the transfer of Medicaid applications from HealthCare.gov to the states. If a person logged on to HealthCare.gov to complete his or her insurance application and was deemed eligible for Medicaid, HealthCare.gov was designed to send the application to the state. The states’ Medicaid IT systems were supposed to be designed to receive these applications and process them in the same way as if someone applied directly to the states’ Medicaid program. Unfortunately, in the beginning months of the launch of the website, these functionalities were not working. This could have been the cause of some of the discrepancies between federal and state run Marketplaces. States with state run Marketplaces may have seen less problems with the transfer of applications.

CBO recently increased their projections of how many people will enroll in expanded Medicaid. They did this because their initial estimates underestimated the “take up rate” of the eligible number of Medicaid beneficiaries that would take up the social insurance program. More research must be done to understand why we are seeing higher levels of Medicaid expansion take up and looking at the application processes between state and federally run Marketplaces could give some information about varying levels in take up. But other factors such as outreach efforts, cultural barriers to public service programs, or robustness of benefit packages could shed additional light into why people enroll in expanded Medicaid coverage.

Interestingly, the state that saw the highest increase in Medicaid enrollment was Kentucky. Since the election of Governor Matt Bevin, the future of both the Kynect state run marketplace and the state’s Medicaid expansion has been in question. If the state’s Medicaid enrollment numbers fall in response to moving the Marketplace to HealthCare.gov it can be very telling that a state run Marketplace is closely related to Medicaid enrollment.

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