American Journal of Law & Medicine

Medicaid on the Eve of Expansion: A Survey of State Medicaid Officials on the Affordable Care Act

I. INTRODUCTION

As of January 2014, 26 states had chosen to expand Medicaid under the Affordable Care Act (ACA) to cover individuals with incomes up to 138% of the federal poverty level. (1) In these states, Medicaid agencies are facing one of the largest implementation challenges in the program's history. We undertook a survey of high-ranking Medicaid officials in these states to assess their priorities, expectations, and programmatic decisions related to the coming expansion.

The Medicaid expansion poses major challenges in the domains of enrollment, management of health care costs, and providing adequate access to services for beneficiaries. (2) Previous research has documented that millions of individuals eligible for Medicaid are currently not enrolled and remain uninsured, (3) suggesting that state outreach strategies may underpin the success or failure of the ACA's coverage expansion. With the problematic launch of the Federal Marketplace in October 2013, concerns have grown about the ability of states and the federal government to enroll eligible individuals. (4)

New enrollment among previously-eligible individuals (the so-called "woodwork effect" or "welcome-mat effect") also may have major budget implications for states, since they will have to pay a larger share of costs for this group. (5) More generally, with spending on Medicaid increasing significantly in recent years, cost projections and approaches to managing program costs are critical and have played a key role in states' debates over whether to expand Medicaid in 2014. (6)

Lastly, recent studies have demonstrated Medicaid's value in expanding access to needed services, with somewhat conflicting results regarding its impact on various health measures. (7) At the same time, the program is faced with ongoing limitations in terms of the number of providers willing to care for Medicaid patients (8) and potential disruptions in coverage over time under the ACA, as patients cycle in and out of Medicaid eligibility. (9) While the Center for Medicare and Medicaid Services (CMS) has recently put out guidance to states on potential options to mitigate the impact of such coverage churning, as well as to increase enrollment more generally, (10) it remains unclear how many states are pursuing various options along these lines.

With major policy changes underway for nearly all aspects of the Medicaid program, understanding the perspectives of state leaders is critical. One recent article examined governors' perspectives on the Medicaid expansion, (11) but in this study, we targeted state Medicaid directors to focus on those officials actively supervising the details of implementation who may be closest to the everyday operational realities of the expansion. Two recent reports featuring surveys of Medicaid officials have focused on fiscal concerns and issues of integration of care. (12) Our study aims to build on this body of knowledge in the context of the quickly changing political environments at the state and federal levels, while covering a more comprehensive set of policy issues. Furthermore, by focusing specifically on those experiences of officials in states expanding Medicaid for 2014, we were able to explore in more depth the specific policies states are pursuing in the areas of outreach and enrollment, cost control, and improving access to care for newly-eligible adults.

Overall, our key findings--described in Part III below--show that Medicaid officials in expanding states were optimistic about the success of enrollment efforts, with community-based assistance predicted to play a large role in ensuring high enrollment rates. (13) However, state officials expressed concerns regarding costs to the state budget and remaining barriers related to newly-eligible beneficiaries' access to care. (14) Officials unanimously reported a heavy reliance on delivery system and payment reform to help control costs, with managed care also playing a key role. (15) Despite implementation challenges, Medicaid officials predicted that the expansion will deliver positive effects on health, access to care, and financial protection for those newly-eligible for Medicaid coverage. (16)

II. METHODS

A. Study Design

We used a structured in-depth survey of Medicaid directors in states expanding Medicaid in 2014 to investigate key policy issues relating to the expansion. We contacted the current Medicaid directors in all 26 expanding states including Washington, D.C. in cooperation with co-investigators at the Center for Health Care Strategies. (17) Officials were first contacted with general information about the study and were informed that participation was voluntary and confidential. After officials consented, they were sent the survey and invited to participate in a telephone call to review their responses.

We obtained responses from 23 of 26 states (a response rate of 88%) and conducted interviews between July 8, 2013 and November 5, 2013. All but two interviews were completed before the ACA's open enrollment period began on October 1, 2013. In eighteen states (78%) we spoke with the Medicaid director, and in the remaining five (22%) we spoke with other high-ranking Medicaid officials appointed by the director to complete the survey. To protect confidentiality, we are unable to provide further details on the official titles or state of origin for each official. (18)

B. Survey Development

Topics selected for inclusion in the survey were based on prior research that identified major policy challenges in Medicaid, (19) as well as a series of semi-structured interviews conducted from December 2012 to February 2013 with six Medicaid directors who had previous experience implementing coverage expansions. (20) Survey domains included outreach efforts and predictions regarding enrollment; the role of pre-existing state programs as a basis for the Medicaid expansion; cost-control mechanisms and budget projections; potential barriers to care for new enrollees; and major implementation challenges. (21) The survey was pilot-tested with two former Medicaid directors and refined based on multiple rounds of feedback.

C. Data Analysis

We analyzed survey responses using descriptive statistics of frequencies and means. Results were based on the total number of officials to each item; the denominator for each question excluded item non-responses. For several variables of interest, we conducted bivariate analyses based on policy-relevant characteristics, such as the state's expected budgetary impact of the expansion and whether states will have state-run or federally assisted exchanges under the ACA22 (the federal exchange was recently renamed the Federal "Marketplace," though our survey instrument referred to "Exchanges," so we primarily use that terminology here). We tested for bivariate associations in the survey responses using chi-square tests for categorical data and Wilcoxon rank-sum tests for ordinal data.

D. Limitations

Our analysis has several limitations. The first is the small sample size. While our survey attained a very high response rate (88%) in a time of tremendous time constraints on state officials, we were restricted by the number of states expanding Medicaid for 2014. (23) Thus our results are primarily useful at a descriptive level, with limited power for identifying statistical significance. Second, many survey questions asked about officials' perceptions or projections for the Medicaid expansion. (24) Such responses are subjective and may not have been supported by actual data; however, they provide a useful portrait of the perceptions of state Medicaid leaders and may be prescient in identifying key challenges in the ACA expansion.

Lastly, despite the assurance of confidentiality and questions designed to be neutral, social desirability bias may have affected officials' responses. This may have been the case particularly when considering questions that could cast their programs or states in a negative light or undermine political support for their policies. Nonetheless, the officials surveyed offered numerous examples of concerns or challenges they are facing in their program, suggesting that most officials were not providing an overly varnished view of the Medicaid expansion.

III. RESULTS

A. ENROLLMENT IN THE MEDICAID EXPANSION

Overall, predictions of enrollment were optimistic. Table 1 summarizes responses regarding the coverage impacts of the expansion. (25) 76% of officials estimated that between half and three-quarters of newly-eligible uninsured adults in their state will sign up for Medicaid. (26) Two states predicted that 76-90% will participate, while three predicted enrollment will be under 50%. (27) The vast majority of state Medicaid officials (73%) reported that they also expect "moderate" or "large" enrollment increases among individuals previously eligible for Medicaid who had not yet signed up for the program (the woodwork effect). (28)

The majority of states (55%) have pre-existing state-funded insurance programs for low-income adults that will be partially or fully replaced by the Medicaid expansion in 2014. (29) Half of these states have small programs, comprising less than 25% of their Medicaid expansion; however, four states expect that the majority of new enrollment in Medicaid in 2014 will come from transferring individuals enrolled in pre-existing programs. (30)

When asked what single factor will have the largest impact on whether newly-eligible individuals enroll in Medicaid in their state, 59% of officials indicated "active outreach and community-based application assistance," while 18% answered public education efforts. (31) Figure 1 presents policies that states are employing to encourage enrollment, with the implementation of new information technology (IT) systems (100%), the use of administrative data to reduce paperwork burden on applicants (91%), and the use of enrollment facilitators (86%) emerging as the most common approaches. (32)

Overall, officials expect most Medicaid applications to come via state-based Exchanges (23%), navigators/outreach assistance (23%), or directly to Medicaid (45%); none expected Healthcare.gov to be the primary means of Medicaid enrollment. (33) Table 2 shows the expected paths of enrollment for new applicants, depending on each state's Exchange type. …

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