Cost-Sharing Drives Medicaid Disenrollment

Cost-sharing requirements appear to lead people to disenroll from Medicaid programs that impose such requirements, according to a new study.

Those disenrolling are likely to be healthier in general than those who choose to remain enrolled in Medicaid despite cost-sharing requirements.

This is among the findings in a study by the National Bureau of Economic Research of Michigan’s Medicaid program, which was one of the first in the country to be authorized to require certain beneficiaries to share in their medical costs.

Such disenrollments also may lead to adverse selection among health care plans that serve Medicaid patients.Learn more about the study, what it found, and what its implications are for Medicaid beneficiaries and the providers who care for them in the National Bureau of Economic Research Study “Adverse Selection in Medicaid:  Evidence From Discontinuous Program Rules.”

A Look at Alternative Medicaid Expansion

While most states expanding their Medicaid programs in response to the opportunity presented by the Affordable Care Act simply expand their existing Medicaid programs, six states have taken a different approach, obtaining Medicaid demonstration waivers so they could tailor their programs in different ways.

In addition, a number of states currently considering Medicaid expansion appear to be considering pursuing demonstration waivers, often referred to as section 1115 waivers, as well.

commonwealth fundOne area in which these demonstration programs differ from traditional Medicaid expansion is in the degree of financial responsibility new Medicaid beneficiaries assume. Typically, new Medicaid participants must pay more for the benefits they receive under their states’ Medicaid expansion through greater cost-sharing responsibilities.

In the new issue brief “How Will Section 1115 Medicaid Expansion Demonstrations Inform Federal Policy?” the Commonwealth Fund looks at the alternative approaches different states have taken and considers the implications of those different approaches for both beneficiaries and the states. Find that issue brief here.

Medicaid Cost-Sharing Re-Emerges

States are beginning to look anew at imposing cost-sharing requirements on their Medicaid population.

Indiana now requires Medicaid recipients to contribute to health savings accounts, Arkansas and Iowa have cost-sharing requirements, and Arizona, Ohio, and Utah are considering introducing cost-sharing.

This new trend is emerging after years out of favor when cost-sharing in Medicaid and children’s health insurance programs led to declining enrollment in Florida, Kentucky, New Hampshire, Oregon, and Wisconsin.

iStock_000015640638XSmallThe new “Healthy Indiana Plan” is receiving a good deal of attention for its use of health savings accounts instead of premiums and co-pays. People who put money in their health savings accounts essentially get free care while those who engage in certain preventive activities can see their required contributions fall and those who fail to make the payments can lose some benefits.

Learn more about the renewed interest in requiring Medicaid patients to pay for some of their health care and the potential implications of such an effort in this Los Angeles Times article.