My must read of the day is "Emergency Visits Seen Increasing With Health Law," in the New York Times:
Supporters of President Obama’s health care law had predicted that expanding insurance coverage for the poor would reduce costly emergency room visits because people would go to primary care doctors instead. But a rigorous new experiment in Oregon has raised questions about that assumption, finding that newly insured people actually went to the emergency room a good deal more often.
The study, published in the journal Science, compared thousands of low-income people in the Portland area who were randomly selected in a 2008 lottery to get Medicaid coverage with people who entered the lottery but remained uninsured. Those who gained coverage made 40 percent more visits to the emergency room than their uninsured counterparts during their first 18 months with insurance.
The pattern was so strong that it held true across most demographic groups, times of day, and types of visits, including those for conditions that were treatable in primary care settings.
A key argument in favor of expanding Medicaid was that it would provide coverage to individuals who were already costing taxpayers billions of dollars in hospital visits. The idea was that, if they have coverage, people will have a doctor to treat less severe illnesses and can largely avoid hospital visits.
There are numerous problems with the expansion of Medicaid that has occurred under the Affordable Care Act, and this is a big one. What’s the point of expansion if it leads to more emergency room visits?
Not to mention, there’s still the ongoing issue of how Medicaid expansion might affect state budgets.
In the expansion, the federal government created two groups within Medicaid. There’s "traditionally eligible" and "newly eligible."
The "newly eligible" group includes anyone who qualifies for Medicaid under the new, expanded criteria: a higher federal poverty level and an allowance that all adults, including those without dependent children, are eligible.
As a part of the expansion, the federal government would pay for 100 percent of the cost of the "newly eligible" for the first three years of Obamacare.
Some states were worried about what’s called the woodwork effect: It describes a phenomenon in which people who were previously eligible but did not sign up, either because they were unaware of their eligibility or because they simply did not want to be in the program, suddenly start registering because they see more advertisements and are now aware of their eligibility.
The result: more "traditionally eligible" Medicaid enrollees, not "newly eligible" ones.
So who pays for those people? Presumably they will be paid for the old way – jointly between states and the federal government, with the federal government paying between 50 percent and 73 percent of the costs, depending on the state. Unlike the federal government, most states actually are supposed to balance their budgets, and the result of additional Medicaid enrollees can be burdensome on state budgets in the immediate future and the long run.
In a nutshell: The Medicaid expansion is a confusing mess. It has the potential to cause serious budget issues for states, and it is not lowering emergency room costs. It may even be increasing them.