When the Department of Health and Human Services approved a proposal allowing Arkansas to experiment with a “private option” for expanding Medicaid through President Obama’s healthcare law, it was viewed as a possible model for other states. But a recent report by the Government Accountability Office could change this thinking.
Under the Arkansas Medicaid model that HHS approved in September 2013, adults eligible for Obamacare’s Medicaid expansion are allowed to use government subsidies to choose among privately administered health plans on the new insurance exchange created by the law.
But a GAO report released Sept. 8 questioned the integrity of the HHS approval process. The report stated that, “In approving the demonstration, HHS did not ensure that the demonstration would be budget-neutral — that is, that the federal government would spend no more under the state’s demonstration than it would have spent without the demonstration.” GAO estimated that the $4 billion in spending that HHS approved for Arkansas was $778 million higher than what the state would have received under traditional Medicaid expansion. In addition, HHS “gave Arkansas the flexibility to adjust the approved spending limit if costs, once the demonstration is underway, prove higher than expected.”
HHS has also approved similar plans in Iowa and Pennsylvania, while at least two other states — New Hampshire and Utah — have been exploring the option. But GAO wrote that if HHS allows other states to follow the Arkansas model, it would have “significant cost implications for the federal government.”
In theory, the Arkansas program was supposed to represent a more market-based alternative for states reluctant to embrace an expansion of the traditional government-run Medicaid program. But the problems highlighted in the GAO report could discourage other states from following Arkansas’ lead.
Obamacare boosts coverage, but not health, among young adults
One of the vexing questions confronting the healthcare policy community is whether expanding health insurance coverage actually translates to an improvement in individuals’ health. A study appearing this month in JAMA Pediatrics (a journal published by the American Medical Association) suggests it might not.
The study looked at surveys of individuals age 19 to 25 and 26 to 34 taken in 2009 and 2012. Obamacare became law during this period and forced insurance companies to allow younger Americans to remain on their parents’ plans until they were 26.
Researchers found that the rate of insurance among the younger cohort increased as a result of the law, but “without significant changes in perceived health care affordability or health status.”
There was “no significant change” in the number of those in the younger group who received a routine medical checkup in the previous year or in the perceived affordability of prescription drugs, dental care, or physician visits. The study also found there was no change in the percentage of the younger cohort that reported receiving a flu shot.
Previous studies on the relationship between health insurance and health outcomes have produced mixed results. In 2013, a major study published in the New England Journal of Medicine found no significant improvement in measured physical health outcomes in those who gained coverage through Medicaid in Oregon. But this May, a large study published in the Annals of Internal Medicine found a significant reduction in mortality in Massachusetts after the state’s 2006 expansion of insurance coverage.
One thing the JAMA study highlights is the distinction between health coverage and compliance. Just because people gain health coverage doesn’t necessarily mean that they’re going to seek care, particularly if they’re young and healthy.
