Research

Study Offers New Insights on Medicaid Expansion Population

Thursday, January 25, 2018
Summary and Key Findings: 

The Anthem Public Policy Institute set out to improve understanding of the Medicaid expansion population by sponsoring a new study from Avalere Health, a leading health care data analysis firm.

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Since 2014, 31 states and the District of Columbia have elected to expand the eligibility requirements for their Medicaid programs as part of the Affordable Care Act. As a result, 11 million individuals who meet the expanded eligibility requirements (childless adults aged 19 to 64 with annual incomes below 138 percent of the federal poverty level) have gained health coverage under the program.[1]

While broad data have been available on the total number of new Medicaid enrollees, there has been very little analysis of the enrollment, care and spending patterns of these individuals over time.

The Anthem Public Policy Institute set out to improve understanding of this population by sponsoring a new study from Avalere Health, a leading health care data analysis firm. The report, available in full here, examined the Medicaid expansion population using data from multiple states and health plans.  The analysis adds meaningful insight to the Medicaid expansion population, including enrollment dynamics and cost and utilization trends. The study identified several key insights, including:

  • A significant number of enrollees in the expansion population disenrolled within one to three years of enrolling in coverage, with only about half of enrollees who obtained coverage in 2014 and early 2015 still covered after 18 months. Disenrollment was more common among younger enrollees, likely for a variety of economic and demographic reasons. In the first half of 2014, enrollees ages 19 to 29 accounted for almost a third (31 percent) of member months, but after two and a half years, enrollees ages 19-29 made up less than a quarter (24 percent) of member months.
  • Claims costs increased steadily over time, suggesting that expansion enrollees who remain enrolled in coverage over time have complex and/or chronic conditions. For example, among those who enrolled during the first half of 2014, average claims costs were $324 per member per month during the first 6 months of coverage, and rose to $389—a 20 percent increase—during the final 6 months of the study period, about three years later.  As a point of comparison, average annual growth in annual Medicaid spending has historically been less than 4 percent for full benefit enrollees.[2]
  • Across enrollment groups, spending on prescription drugs consistently increased over time, eventually becoming the largest single category of spending—another indication that expansion enrollees may have complex and/or chronic conditions.  Specifically, for enrollees who joined in the first half of 2014, compared to their first six months of coverage, the average per member per month prescription drug claims costs were 58 percent higher in months 13 to 18, and 89 percent higher during months 25 to 30 of enrollment.

Because most individuals who gained coverage under the Medicaid expansion did not previously have health insurance, states and the Centers for Medicare & Medicaid Services (CMS) generally expected these individuals to have pent-up demand, using a lot of health care services initially after enrolling. However, they also expected the group’s costs would fall over time and ultimately be less than those of traditionally eligible adults.  What this analysis shows is that among individuals who remain covered by Medicaid—who tend to be older and appear to have chronic care needs—costs are rising over time.  But, these costs are shifting from acute care, such as inpatient hospitalizations, to chronic care, such as prescription drugs, perhaps reflecting better care management.

As policymakers and health care industry stakeholders continue to examine developments and trends in this area, the Anthem Public Policy Institute will continue to share insights and ideas that can inform the policy discussion.

[1] Centers for Medicare & Medicaid Services. July 2017. Quarterly Medicaid Enrollment and Expenditure Report (July-September 2016). Available here: https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/enrollment-mbes/index.html.

[2] The Henry J. Kaiser Family Foundation. Average Growth in Annual Medicaid Spending from FY2000 to FY2011 for Full-Benefit Enrollees.. Available here:  https://www.kff.org/medicaid/state-indicator/average-growth-in-annual-me...

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