Medicaid expansion: Will we get our money's worth?

Should we just hand uninsured adult diabetics $1000 per year rather than enrolling them in Medicaid? That’s the question I’m left with after reading Medicaid Expansion Under Health Reform May Increase Service Use and Improve Access for Low-Income Adults With Diabetes in this month’s diabetes focused issue of Health Affairs.

If the Patient Protection and Affordable Care survives the Supreme Court and the Republican Party, millions of uninsured, non-elderly, low-income adults will be newly eligible for Medicaid in 2014. The authors of the article compared diabetics on Medicaid to those who lacked insurance and found:

  • Much higher health care spending for those on Medicaid: $14,229 v. $3,498
  • Much higher out-of-pocket expenses for the uninsured: $1,446 v. $415
  • Better access to medical services by those on Medicaid
  • Better access to prescription drugs by those on Medicaid

Compared to their uninsured counterparts, diabetics on Medicaid go to the doctor more, use more prescription drugs, get admitted to the hospital more and go to the emergency room more.

The authors would dearly love to say that outcomes for diabetics on Medicaid are better, but alas the evidence is lacking. A couple of process measures (HbA1c measurement and retinal exam) were significantly better for Medicaid patients but others –foot check, blood cholesterol measurement, flu vaccination– weren’t. (The authors cite poor sample size –but unfortunately the appendix, which is supposed to include more detail on these analyses is mysteriously absent from the Health Affairs website.)

There’s no attempt in the article to document real outcomes measures such as reduction in complications or even improved glycemic control.

I found this section of the discussion particularly discouraging:

“Taken together, the findings for spending, use, and access in our analysis indicate that Medicaid facilitates financial protection and access for enrollees with diabetes and complex health needs. The findings also indicate that currently uninsured adults with diabetes will probably experience increased utilization and improved access upon gaining Medicaid coverage.

Additional research is needed to understand Medicaid’s role in facilitating access to recommended diabetes care, because the literature on this topic has mixed conclusions.”

In other words, being in Medicaid definitely saves a diabetic enrollee money (how could it not?) and “probably” –but may not– improve access. (And there’s silence on outcomes.)

In the absence of more compelling evidence, there’s a pretty good argument to be made that the main impact of enrolling a diabetic in Medicaid provides doctors, hospitals, pharmaceutical companies et al. access to a paying customer to the tune of about $10,000 above what an uninsured diabetic yields. This is not the kind of access the authors want to talk about, but that’s what I read from the data.

From a purely financial standpoint maybe it would make more sense for the government to hand each uninsured diabetic $1000 per year (the difference in out-of-pocket costs between the Medicaid enrollee and the uninsured) and save the other $13,000 that’s captured by the health care system.

I’m not actually advocating such a policy, for three reasons:

  • Access to the health care system is important, and everyone deserves to have it
  • There probably is some outcomes benefit from being on Medicaid –it’s just not evident from the data presented in this article
  • We need to find a way to make Medicaid –and health insurance in general– useful for those with chronic illness. That can be done by reforming the delivery system

January 10, 2012

3 thoughts on “Medicaid expansion: Will we get our money's worth?”

  1. This is a very interesting discussion on the implications of medicaid expansion under the ACA and potential ways to correct the system. However, regardless of the analysis in this article, please take a look at the amicus brief filed by the American Action Forum regarding the unconstitutionality of the ACA.

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