Medicaid Expansion Choices Mean Different Care for Poor Diabetics, Depending on Where They Live

Evidence-Based Diabetes Management, May 2014, Volume 20, Issue SP8

Patients with diabetes, and public health efforts to combat the rising incidence of the disease, have starkly different prospects in states that have expanded Medicaid eligibility under the Affordable Care Act (ACA) compared with patients and programs in states that do not.

The 2012 US Supreme Court ruling that generally upheld the constitutionality of the ACA struck down a provision penalizing states that do not expand Medicaid to all adults earning no more than 133% of the federal poverty level, plus 5% set aside for cost sharing, which came to $15,415 for an individual or $26,344 for a family of 3 in 2012. If expanded to all 50 states, Medicaid would be covering an additional 21.3 million people by 2022, a 41% increase compared with Medicaid before passage of the ACA. Almost all the newly eligible are adults.1

Nearly half the states,2 including 7 of the 10 reporting the highest diabetes prevalence to the CDC in 2012, have chosen to not expand Medicaid.3 A Harvard study found that, among many health consequences, these state-level decisions mean that more than 400,000 diabetics will not get care they could otherwise receive.4

The ACA allocates to states 100% federal funding to expand Medicaid, a change that took effect January 1, 2014. Federal funds will continue paying the entire cost of the expansion through 2017, and 90% of the cost thereafter. Arguments against expanding Medicaid have been a mix of concern about long-term costs and an expressed philosophy that government programs should not grow. Most states where Medicaid did not immediately expand have Republican governors—1, Arkansas, has a Democratic governor and a Republican legislature, and had a protracted debate toward a “private option” that has allowed new Medicaid recipients to use federal funds to purchase private insurance.5

Representative of the Republican governors opposing Medicaid expansion is Bobby Jindal of Louisiana, who claims to be the first governor to do so. His op-ed in The Times Picayune of New Orleans stated that Medicaid expansion would have cost Louisiana taxpayers $1.7 billion over 10 years. “Expansion would result in 41% of Louisiana’s population being enrolled in Medicaid. We should measure success by reducing the number of people on public assistance. But the Left has been very clear: their goal is to transform all healthcare in America into government-run healthcare,’’ he wrote.6

Across the nation, the Medicaid provision would have expanded coverage to 16 million adults previously excluded. The decision by some states not to expand means that 3.6 million people will remain uninsured, and the affected states will not receive $8.4 billion in federal payments.7

The Harvard study, “Opting Out of Medicaid Expansion: The Health and Financial Impacts,” determined that state-level decisions to not expand Medicaid will result in 422,553 diabetics not receiving medication. Also, 712,037 persons with undiagnosed depression will not receive mental health screening, an estimated 240,700 individuals will suffer catastrophic medical expenditures that otherwise would have been covered, 195,492 women aged 50 to 64 years will not receive mammograms, and 443,677 women aged 21 to 64 years will not receive the Papanicolaou test (Pap smear). Full expansion “would have resulted in an additional 658,888 women in need of mammograms gaining insurance, as well as 3.1 million women who should receive regular Pap smears,’’ the study found.4

Most sobering of all, the study projected between 7115 and 17,104 deaths attributable to the lack of Medicaid expansion in opt-out states.4 In Florida, where Republican governor Rick Scott called for a limited expansion of Medicaid8 but faced resistance from the legislature, the media has reported on the death of a young uninsured woman from a diagnosed heart condition she could not afford to have treated.9

Krista Maier, associate director of public policy for the American Diabetes Association, noted that states declining to expand Medicaid are effectively closing off health insurance to some of their poorest residents. The ACA assumed everyone earning 133% or less of the federal poverty level would be enrolled in Medicaid, so the law does not provide tax credits to purchase insurance on exchanges to persons earning less than 100% of the federal poverty level.4

“We fully support states accepting the federal funding; otherwise the poorest people have no viable option for acquiring,’’ she said.

The states with the most restrictive income eligibility for Medicaid still must enroll the poor who become disabled, Maier noted.

“When you can’t afford the care to manage your disease, you scale back the care. Without adequate care, you increase risk of complications,’’ she said. “The states that don’t expand Medicaid are, essentially, waiting for the person to become so sick they are disabled to be eligible. If they expanded eligibility these people could receive care before they are disabled.’’

A Movement Toward Prevention

According to the Trust for America’s Health and the Robert Wood Johnson Foundation,10 the 10 states with prevalence of type 2 diabetes mellitus (T2DM) above 11% are West Virginia, Mississippi, Alabama, Louisiana, Tennessee, Ohio, South Carolina, Oklahoma, Florida, and Arkansas. Louisiana, Alabama, and Mississippi each top 12%, while West Virginia has the unwanted first place spot with 13%. Of the 10 states, only West Virginia, Ohio, and Arkansas are expanding Medicaid.2

Under current cost-sharing formulas, Medicaid expansion is a bargain for the states. A study by the Kaiser Family Foundation calculated that if every state expanded Medicaid, cumulative state Medicaid spending would increase by $76 billion from 2013 to 2022, while federal Medicaid spending would increase by $952 billion. Some states would enjoy decreases in Medicaid spending while states with the largest populations of poor, uninsured people would shoulder “relatively small increases in spending.’’1

While expanding Medicaid appears inexpensive for states, studies show that refusing the influx of federal funds is costly. Texas, the largest opt-out state, would have to spend $15 billion over 10 years as its portion of increased Medicaid spending, but the state, local governments, and hospitals will spend about that much anyway on adult healthcare that would be covered by Medicaid, if expanded. Local taxpayers across the Lone Star State already spend $2.5 billion for indigent care, inpatient hospital care for jailed individuals, and charity care, most of which the expansion would cover. Texas hospitals write off $1.8 billion in unreimbursed charity care, some of which funds individuals that Medicaid would cover under an expansion.11

Kentucky, with a 10.7% diabetes prevalence, is expanding Medicaid. An analysis commissioned by the Cabinet for Health and Family Services found, aside from “tremendous benefits for the health of hundreds of thousands of Kentuckians,” that “It would cost Kentucky more’’ to not expand Medicaid eligibility than to accept the federal money. The analysis, done by Price WaterhouseCooper and the University of Kentucky, concluded that expanding Medicaid would pump $15.6 billion into the state economy between this year and 2021, create 17,000 new jobs, and have a net positive impact on state and local government budgets of $802 million over the same period. The report estimated the cost of care for Kentucky’s uninsured population at $1.1 billion annually, with costs spread to government, hospitals, public clinics, and patients or their unpaid doctors.12

Governor Steve Beshear has decried Kentucky’s poor health statistics as not only morally unacceptable but also as a barrier to lifting large portions of the commonwealth out of poverty.13 The state ranks first among the 50 states in mortality and at or near the top for mortality from cancer, where it ranks first; cardiovascular disease, where it ranks fourth; heart disease, where it ranks fifth; and stroke, where it ranks twelfth. Kentucky is 50th among the states in per capita income and 5th in percent of the population earning under the federal poverty level. Prior to Medicaid expansion, 600,000 residents lacked health insurance.9,10 Diabetes prevalence among adults in Kentucky has tripled from 3.5% in 1995 to 10.7% of the population in 2012, said Theresa Renn, coordinator of the state’s Diabetes Prevention and Control program.

Diabetes is a costly disease to treat. Medicaid spending on persons with diabetes averages $14,229, versus $4568 on those without diabetes.14

“We know many people have diabetes many years before diagnosis and diabetes prevalence tends to be higher in the Medicaid population, so Medicaid expansion will probably increase the number of people we see, but the number of hospitalizations and complications will go down,’’ Renn said.

The ACA contains several provisions to encourage state Medicaid programs to reimburse for diabetes screening, prevention, care, and treatment.3 John Langefeld, MD, medical director of the Kentucky Department of Medicaid Services, said in an e-mail that the state is exploring how to utilize incentives within the ACA to expand prevention services for diabetes and other chronic diseases.

“Medically necessary services related to diabetes along with other chronic conditions are covered by Medicaid. The Kentucky Department for Medicaid Services has had discussions with the MCOs (managed care organizations) regarding DPPs (diabetes prevention programs). There is interest in supporting this initiative; however, currently there are limited examples of DPP deployment in Medicaid populations. The active discussion is around potentially starting a pilot program. The MCOs are actively monitoring chronic conditions—including diabetes—from a quality-of-care and outcomes standpoint, and we also are actively discussing how to establish a diabetes registry.”

Renn, whose entire career has been focused on caring for people with diabetes, said there is great interest in Kentucky in bringing much greater public health resources to bear on prediabetes.

“Diabetes education is a huge help, but often not well reimbursed,’’ she said. “Medical nutrition training is another, helping people learn what they can eat to keep their blood sugar under control. We have great interventions coming along for people who are at high risk, but you need screening to find them. There are evidence-based approaches we can employ. Tackling prediabetes is a whole new world.’’

Where Is Public Opinion?

Governors in Southern states with high rates of diabetes who decline to expand Medicaid may run into evolving public opinion on this portion of the ACA. In late April, the Kaiser Family Foundation and The New York Times released a poll that showed despite continued distrust among Southerners for the term “Obamacare,” there appears to be support for Medicaid expansion, even in states where it has faced resistance from elected officials.15

The poll was conducted April 8 to 15, 2014, in Kentucky, North Carolina, Louisiana, and Arkansas. (North Carolina has not expanded Medicaid.) All 4 states have competitive United States Senate races where residents have seen advertising about the ACA.

In Kentucky, Louisiana, and North Carolina, sizable segments of the population did not know whether their states had expanded Medicaid, which is consistent with earlier Kaiser polling that revealed that much of the population is confused about the new law.16 In Kentucky, 45% were unsure about expansion or did not answer; in Louisiana the share was 36%, and in North Carolina it was 39%. When asked whether their states should expand Medicaid, 52% in Louisiana and 54% in North Carolina said yes, compared with the 40% in Louisiana and 36% in North Carolina who preferred to “keep Medicaid as it is today.”15

Arkansas respondents received different questions; 52% favored expanding “government programs like Medicaid to cover more low-income people,” while 23% favored the use of government funds “to purchase private health insurance for low-income people through the new healthcare marketplace.” Only 7% said “the state shouldn’t do anything to help low-income people get health insurance.”15

Jindal faces term limits in 2015. Should Louisiana’s next governor expand Medicaid, it has a model community healthcare program to deliver diabetes care. The Greater New Orleans Community Health Connection, known by its acronym GNOCHC (pronounced like the round pasta), was created with a Medicaid waiver to deliver care after Hurricane Katrina. The program grants Medicaid to otherwise uninsured people making no more than the federal poverty level, which is $1963 per month for a family of 4. The program pays for primary and mental healthcare visits with no out-of-pocket costs at 40 community health centers.

“It really is community-based healthcare,” said Susan Todd, executive director of 504HealthNet, which takes its name from the region’s area code, and is among 18 healthcare nonprofits that make up GNOCHC. The well-functioning network already features an electronic health record system called for by the ACA, and is ready to expand if Medicaid does.



1. Holahan J, Buettgens M, Carroll C, Dorn S; the Urban Institute. The cost and coverage implications of the ACA Medicaid expansion: national and state-by-state analysis. Kaiser Family Foundation website. http://kaiserfamilyfoundation. Published November 1, 2012. Accessed April 9, 2014.

2. How will the uninsured fare under the Affordable Care Act? Kaiser Family Foundation website. Published April 7, 2014. Accessed April 15, 2014.

3. Diabetes Report Card 2012. CDC website. Published 2012. Accessed April 19, 2014.

4. Dickman S, Himmelstein D, McCormick D, Woolhandler S. Opting out of Medicaid expansion. Health Affairs Blog. Published January 30, 2014. Accessed April 19, 2014.

5. DeMillo A. Arkansas house approves private option funding. Associated Press. Published March 4, 2014. Accessed April 24, 2014.

6. Jindal B. Why I opposed Medicaid expansion. The Times Picayune. Published July 23, 2013. Accessed April 21, 2014.

7. Price CC, Eibner C. For states that opt out of Medicaid expansion: 3.6 million fewer insured and $8.4 billion less in federal payments. Health Aff. 2013;32(6):1030-1036.

8. Governor Rick Scott: We must protect the uninsured and Florida taxpayers with limited Medicaid expansion [press release]. Tallahassee, FL: Office of the Governor; February 2, 2013. Accessed April 21, 2014.

9. Manes B. The perils of Florida’s refusal to expand Medicaid. Orlando Weekly. Published April 9, 2014. Accessed April 14, 2014.

10. Trust for America’s Health. A healthier American 2013: strategies to move from sick care to healthcare in the next 4 years. Robert Wood Johnson Foundation website. Published January 2013. Accessed April 21, 2013.

11. Caffrey MK. Leveraging healthcare reform to combat a history of cancer: Kentucky to expand Medicaid, increase clinical trials as U of K Markey Center gains NCI status. Am J Manag Care. 2013:19(SP6)SP212-SP218.

12. Hamilton B. Expanding Medicaid in Texas: smart, affordable and fair. Texas Impact and Methodist Healthcare Ministries of South Texas Inc. advocacy_and_public_policy/Smart%20Affordable%20and%20Fair_FNL_FULL.pdf. Published January 2013. Accessed April 14, 2014.

13. Kentucky Cabinet for Health and Family Services. Analysis of the Affordable Care Act (ACA): Medicaid expansion in Kentucky. Published October 2012. Accessed April 14, 2014.

14. Garfield RL, Damico A. Medicaid expansion under health reform may increase service use and improve access for low-income adults with diabetes. Health Aff. 2012;(1):159-167.

15. Hamel L, DiJulio B, Firth J, Brodie M. New York Times Upshot/Kaiser Family Foundation polls in four Southern states. Kaiser Family Foundation website. Published April 24, 2014. Accessed April 25, 2014.

16. Caffrey MK. Kathleen Sebelius’ name isn’t on any ballot, but make no mistake, this is her campaign. Am J Account Care. 2014;2(1):28-32.

“Three years ago, after passage of the ACA but before the Supreme Court ruling, we were preparing for Medicaid expansion,” Todd said. “I think it will come, eventually, and we have a program we can scale up when it does.”