Costs of healthcare beset nation, prompt look at Medicaid expansion

Urban Institute finds benefit in Medicaid expansion for certain regions

A recent study from the Urban Institute shows that the financial burden of out-of-pocket medical costs varies widely from state to state – and regionally. The study offers a first-of-its-kind look at which state’s residents could most benefit from Medicaid expansion. 

The report “Financial Burden of Medical Spending by State and the Implications of the 2014 Medicaid Expansions,” funded by the Robert Wood Johnson Foundation, shows which states’ residents could most benefit from the Medicaid expansion as spelled out in the Affordable Care Act.

“Not surprisingly, the poor pay a large share of their resources to access healthcare. However, the burden levels vary considerably from state to state,” said lead author Kyle J. Caswell, of the Urban Institute in a press release. “This has implications for Medicaid expansion. States with a larger share of low-income residents currently facing high medical spending burden levels may benefit most. State officials can alleviate this burden by expanding Medicaid eligibility, which will enable people with limited resources to access healthcare at no or very low cost.”

The researchers found variations in medical costs from state to state and even across broader regions of the country, and found wider variations in healthcare spending among poorer populations than it did for those with higher incomes.

According to the research, 8.1 percent of Nevada’s non-elderly population has low income and high medical cost burden with no Medicaid or CHIP coverage – the highest rate in the country. Comparatively, in Vermont, only 3 percent of the population has low income and high medical cost burden (defined as medical costs in the top 25 percent in the country).

Broadly, residents of the Mid-Atlantic states have the lowest out-of-pocket spending burden, while those living in Mountain and East South Central states spend a greater percentage of their incomes on out-of-pocket costs and therefore have a higher burden.

Factors that contribute to the geographic variations include such things as availability and generosity of safety-net programs, how frequently people in the region sought care and the overall price of care.

“In sum, the ACA’s Medicaid expansions can potentially play an important role in expanding access to comprehensive medical care at no or very limited cost to low-income individuals,” the report noted. “Given that states have the choice to participate in these expansions and that some states have larger potentially Medicaid-eligible populations experiencing high burden levels, the choice to participate will affect states differently. States that participate in the expansions have an opportunity to significantly decrease financial burdens for a high-need segment of their population.”

Of the 25 states with the highest share of low-income, high-burden populations, nine of them (Louisiana, Mississippi, Georgia, Alabama, Idaho, South Carolina, Texas, Oklahoma and North Carolina) have announced they will not participate in Medicaid expansion. Ten states (Nevada, Montana, Arkansas, New Mexico, Florida, Arizona, Missouri, North Dakota, California and Colorado) have indicated they will expand the program and six (Utah, Oregon, Kentucky, West Virginia, Tennessee and Kansas) are still undecided.