Report: Medicaid expansion states, led by CT, reduce per-person costs

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Connecticut saw per-person Medicaid spending decrease more than any other state over a five-year period that included the first year of expanded coverage under the Affordable Care Act.

Per-person Medicaid spending in Connecticut dropped an average of 5.7 percent per year from 2010 to 2014, compared with an increase of 2.5 percent for private health insurance and an increase of 1.6 percent for Medicare, according to a analysis of federal data by Center for Medicare and Medicaid Services researchers published in the journal Health Affairs.

The article cites the implementation of the Affordable Care Act as having the most widespread impact on the health sector nationwide in the 2010-2014 period.

Spending more overall, but less per person

States such as Connecticut that chose to expand Medicaid under the Affordable Care Act collectively spent 12 percent more on Medicaid as a whole from 2013 to 2014, compared with 6 percent in non-expansion states, but on a per-person basis, the script was reversed.

Expansion states saw a 5.1 percent decrease in per-person Medicaid spending while non-expansion states saw a 5.1 percent increase.

An influx of healthier Medicaid enrollees under the expansion is credited with helping to bring down costs.

Looking at the mix of Medicaid in Connecticut, where it’s called HUSKY, just 12 percent are in the most expensive HUSKY C for seniors and blind or disabled people; 60 percent are children and their parents in HUSKY A and the remaining 28 percent are adults without minor children in HUSKY D, according to February figures from the state Department of Social Services.

HUSKY D is the Medicaid expansion category — Connecticut has added about 217,000 of these adults to HUSKY under the ACA expansion, according to DSS.

DSS also attributes cost savings to a 2012 shift from using three managed care companies to handle Medicaid medical benefits – and take on the risk associated with clients’ medical costs – to having one company administer the program with the state responsible for claims costs.

Private insurance enrollment grew faster in nonexpansion states

While states that didn’t expand Medicaid saw slower increases in overall Medicaid spending, they saw faster increases in spending by private health insurers, in part driven by more individuals purchasing private insurance through marketplaces set up under the ACA.

Nonexpansion states accounted for 45 percent of all private insurance enrollment but 55 percent of all ACA marketplace enrollment.

What’s happened since 2014?

Federal data move slowly, and 2014 is the last year all of the data for the state-by-state analysis were available, but DSS costs have continued to trend downward in the HUSKY D program, which includes the expansion adults.

Connecticut’s Medicaid expansion added 217,000 adults without minor children, but in the years since 2014 the state has made cuts to a different group.

In 2015 the state lowered the maximum eligibility income for adults with minor children, HUSKY A parents, from 201 percent of the federal poverty level to 155 percent, affecting close to 18,903 people.

Further cuts remain on the table in the budget session that has gone into extra innings. Gov. Dannel P. Malloy’s proposed budget would further reduce the maximum income for HUSKY A parents to 138 percent. The legislature’s nonpartisan Office of Fiscal Analysis estimates that would make an additional 9,200 people ineligible and save $11.8 million over two years.

Despite cutting some adults out of the program, DSS spokesperson David Dearborn said parental coverage changes aren’t likely to have a major impact on overall per-enrollee costs of the state’s Medicaid program since it covers close to 770,000 people.

About 41 percent — 7,789 — of those 18,903 who became ineligible for HUSKY A under the 2015 cuts still were receiving some form of HUSKY coverage in June, according to the June report tracking the group’s transition.  In some cases, people maintained eligibility because their incomes were lower than had previously been reported. Clients have remained eligible for one of the HUSKY programs for other reasons, such as having a disability or being pregnant.

Another 2,546 people had private health insurance; 1,204 had signed up for a plan but not longer had it as of June. The status of the remaining 7,364, was unknown.

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