In January 2013 a U.C. Berkeley report (pages 4-5) analyzed what Medi-Cal Expansion would mean to California. Now we can compare some of the predictions to what has happened so far. (The report uses the terms "newly eligible" for what is called "Strict Expansion" in ACASignups (i.e. childless adults ages 19-64), and "already eligible but not yet enrolled" for what ACASignups calls "woodworkers" or "previously eligible.")
Prediction 1: "With the adoption of the Medi-Cal Expansion, we predict...more than 1.4 million Californians will be newly eligible for Medi-Cal, of which between 750,000 and 910,000 are expected to be enrolled at any point in time by 2019." According to ACA Signups, more than 750,000 "newly eligible" had enrolled by mid-March 2014, including 650,000 moved into Medi-Cal from the Low Income Health Program on Jan. 1.
Most ACA critics now grudgingly admit that people are getting insured after all, but they say there's a catch. "Where are we going to get all the doctors?" a social worker asked me recently. "We're overwhelmed as it is." A letter in the local paper said, "People aren't really covered unless someone accepts their 'insurance', and if nobody is accepting it, then why should people pay for it?"
I briefly answered the letter writer online, saying that the solution was in the provisions of the Affordable Care Act to increase the primary care workforce, not only with more primary care doctors but also more nurses, nurse-practitioners and physician assistants. I was then curious to find out more about what the ACA has been doing to upgrade primary care in the U.S. and found that it has already made major improvements.
According to a report issued last July by the Kaiser Commission on Medicaid and the Uninsured, if all states accepted Medicaid Expansion the number of uninsured would be reduced by an additional ten million people. The comprehensive report noted, however, that 4.9 million of those people were living in states that had refused the expansion and another 1.5 million were in states that had not yet decided.
Why have many governors refused the offer of the federal government to fund 100% of the expansion for three years, and 90% thereafter until 2022? Among other reasons, the governors claim they cannot depend on the promise of federal funding, but they rarely state their main concern: the possibility that a large number of additional regular Medicaid clients will come "out of the woodwork." These are people who could have qualified previously under the regular Medicaid rules but never enrolled, perhaps because they did not know about the system, did not realize they might qualify, or did not know how to find out. As reported by NPR in 2012: "what really has many state leaders worried is something called the 'woodwork effect.' When big parts of the health law go into force in 2014, they worry it will bring out of the woodwork the millions of people who are already eligible for Medicaid but aren't already enrolled."
It appears that many people have indeed been signing up for regular Medicaid because of the publicity about healthcare.gov and the state exchanges, as well as an easier, streamlined enrollment process required by the ACA. Evidence of the woodwork effect can be found in the latest CMS report. For states with Medicaid Expansion, there was an average increase of 14.4% in Medicaid applications Oct-Dec compared to the July-Sept average. For states not expanding Medicaid, there was an average decrease of 10.1% during the same period. This decrease may reflect a typical seasonal pattern, which makes the 14.4% increase in the Expansion states even more remarkable.
States refusing Medicaid Expansion fear the woodwork effect because the federal government pays a much smaller share of the costs of regular Medicaid: from 73 percent in a poor state like Mississippi, for example, to 50 percent for states such as Wyoming, California and Connecticut. When it comes to paying its share of Medicaid costs, the federal government will have to require that states distinguish clearly between regular Medicaid clients and the "non-elderly", non-disabled, childless, low-income adults between the ages of 19-64 who are newly enrolled because of Medicaid Expansion.
Currently, these states (plus DC) are expanding Medicaid:
AZ, AR, CA, CO, DE, HI, IL, IA, KY, MD, MA, MI, MN, MA, NV, NJ, OH, UT, NM, NY, ND, OR, RI, VT, WA, WV
The December report released Jan. 21 by Covered California shows that from Oct. 1-Dec. 31 the exchange received 1,107,229 electronic applications for health care coverage through both private plans and Medi-Cal. Multiplying that number by 1.8, "based on an average of 1.8 individuals per application," it was estimated that the number of applications represented 1,993,012 individuals.
The 1.8 factor was not used for "completed applications." From Oct. 1-Dec. 31, there were 771,008 completed applications for health care coverage through Covered California (including Medi-Cal) for 1,456,909 individuals. If the 771,008 completed applications had been multiplied by 1.8, there would have been only 1,387,814 individuals. This indicates that individuals, not households, were counted in the completed applications.
From Oct. 1-Dec. 31, there were 500,108 enrollments in a Covered California health plan (this did not include Medi-Cal). Of the 730,449 individuals who were "determined to be eligible for enrollment in Covered California", more than 2/3 enrolled. Clearly these were enrollments by individuals, not households.
"Churning" describes the process by which an estimated nine million people move off Medicaid every year when their income increases, perhaps because of a seasonal job, and then move back when their income drops. Usually, people churning out of Medicaid have remained without health care coverage until they re-enroll again.
Now, because of the Affordable Care Act, people who leave a Medicaid managed care plan may temporarily qualify for subsidized insurance through the exchanges, but they may experience gaps in coverage or have to change health plans or doctors as they move back and forth. The director of the National Association of Medicaid Directors, quoted in a Kaiser Health News article, explains the challenge: