The newly insured came to Medicaid with medical issues that had gone unaddressed for years. The same problem has been cited by insurers who have asked for large rate increases for 2016 for plans on the exchanges.
The cost of caring for those newly insured by Medicaid expansion is proving much higher than the federal government estimated, according to a new report CMS released Friday.
The numbers from the CMS Office of the Actuary showed that adults who were newly eligible for benefits cost of the government $5517 on average in 2014, compared with an average of $4650 for adults who were not receiving benefits for the first time.
Not only were the newly eligible adults more costly to care for than the existing beneficiaries, but earlier estimates had pegged their costs at 1% less than those already on the Medicaid rolls.
So far, 29 states have expanded Medicaid under the Affordable Care Act (ACA), and Montana awaits a waiver from CMS on its expansion plan. The ACA envisioned all states extending benefits to those earning up to 138% of the federal poverty line. However, the 2012 US Supreme Court ruling that upheld the law allowed states to decide whether to expand Medicaid, and not all have.
The report released Friday may fuel arguments in remaining states, led by Republican governors or legislatures, that expansion is too costly. The actuary’s report found that total Medicaid spending grew 9.4% between 2013 and 2014 to $498.9 billion, and CMS projects it will reach $835 billion in 2023.
Under the terms of the ACA, the federal government pays all expansion costs until 2017, at which point states will pay 10% of the cost of expansion. Even though most of the tab is paid by the federal government, some states still see expansion as too costly, since state constitutions require budgets to be balanced annually. Many Republican lawmakers do not trust the federal government to keep up Medicaid funding in perpetuity.
CMS’ actuary pinned the higher-than-expected costs on beneficiaries having medical needs than had gone unaddressed for years. This is the same issue that has been blamed by insurers who have filed for premium increases for plans sold on the exchanges: many of those buying coverage under the ACA have not had insurance for years, if ever, and are finally getting care for pent-up medical conditions.
In many states, rate increases sought for plans on the exchanges are in the double digits, and some are above 20%. However, some experts believe that this pattern will eventually taper off as conditions are treated, and medical spending and rates will stabilize.
Navigating Health Literacy, Social Determinants, and Discrimination in National Health Plans
February 13th 2024On this episode of Managed Care Cast, we're talking with the authors of a study published in the February 2024 issue of The American Journal of Managed Care® about their findings on how health plans can screen for health literacy, social determinants of health, and perceived health care discrimination.
Listen
Drs Raymond Thertulien, Joseph Mikhael on Racial Disparities in Multiple Myeloma Care Access
December 28th 2023In the wake of the 2023 American Society of Hematology Annual Meeting and Exposition, Raymond Thertulien, MD, PhD, of Novant Health, and Joseph Mikhael, MD, MEd, FRCPC, FACP, chief medical officer of the International Myeloma Foundation, discussed health equity research highlights from the meeting and drivers of racial disparities in multiple myeloma outcomes.
Listen
The Pivotal Role of Payers in Improving Health Equity, Maternal Health Care in the US
March 26th 2024A presentation at the Greater Philadelphia Business Coalition on Health's 2024 Women’s Health Summit discussed how payers, including employers and public entities, can strategically influence health care purchasing to prioritize maternal health and equity.
Read More
What We’re Reading: HHS' Funding Flat; Mifepristone Safety; Insulin Shortage
March 25th 2024Flat funding for Health and Human Services (HHS) leaves critical health initiatives stagnant; Supreme Court weighs tightening regulations on abortion pill; manufacturing delay sparks access concerns for insulin medication.
Read More