Summary: With a couple of months under the belt of the exchanges, a surprise is made evident as to the largest group of enrollees – Medicaid. Medicaid signups are a dual-edged sword for healthcare.
With the passing of the Affordable Care Act of 2010, one of the main goals was to provide affordable healthcare to more Americans. To this avail, many provisions were enacted, such as expanding Medicaid and creating health insurance exchanges.
Medicaid expansion was originally slated for all states, requiring them to expand to 138% of the poverty level. In 2012, this provision was deemed to be unconstitutional and permitted discretion to each individual state to choose whether or not to expand. With the expansion comes federal funding to the tune of 100% for the first three years and progressively reducing to 90% and lower after the initial time period. There are 26 states which have elected to expand leaving approximately 50% that opted not to expand. The reason stated was largely the costs associated especially after the initial three year period.
In addition to Medicaid expansion, public exchanges were created with open enrollment beginning October 1, 2013 and becoming effective in 2014. The exchanges have certainly come under scrutiny both in terms of the computer glitches associated with enrollment as well as the protection of healthcare and financial personal information. In order to enroll in the public exchanges, financial data is now required. Financial data is two-fold – one to determine if the enrollee is eligible for Medicaid and two to determine if federal funding in the form of subsidies might be available.
There has been a lot of talk about the public exchange enrollment in regard to needing large numbers of young healthy individuals to sign up to help offset the costs incurred by older individuals and those who aren’t as healthy. The subsidies were created as a dangling carrot to entice people to sign up, again especially those who are young and healthy. Additionally, individual mandates have been enacted requiring all Americans (with few exceptions) to be covered under health insurance or be assessed a penalty.
The enrollment numbers are beginning to trickle in and thus far, Medicaid is the largest group, outnumbering private insurance by nearly 4 to 1. Medicaid signups are a dual edged sword for healthcare. Medicaid enrollment suffices the goal of the Affordable Care Act to provide insurance coverage to more Americans. The other side of that coin is to provide affordable coverage.
- Medicaid enrollees tend to have more chronic conditions which can add to healthcare costs.
- On the other hand, Medicaid tends to be less costly than private insurance.
- Increasing the enrollment numbers for Medicaid can serve to encourage preventative healthcare which in the long run can help reduce healthcare costs.
These numbers are still preliminary numbers very early in the healthcare exchange process. The glitches with the healthcare.gov website have contributed to the higher numbers of Medicaid enrollees. Many of the glitches were related to choosing plans and “shopping” for insurance providers, plans, provisions, and benefits. With Medicaid, these options don’t exist making the enrollment process much simpler than for those seeking private insurance. Additionally, states have initiated many outreach programs to those who are on federal plans such as food stamps. Some have even gone so far as to send out a form to these recipients enabling them to simply return the form or make a phone call to enroll. These two factors have significantly impacted the Medicaid enrollment. It will be interesting to see how the final numbers turn out and how healthcare costs will be affected.
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