5 Real Facts About Medicaid In Plain English

Medicaid now covers 73 million people, making it the nation’s largest insurer. It is the centerpiece of the U.S. health care safety net, providing benefits to adults and children who would otherwise have difficulty getting and paying for care. Yet the program is not well understood by the public.

Here are five facts about Medicaid:

Nearly 16 million people have gained Medicaid coverage under the Affordable Care Act’s expansions; most had previously been uninsured.

Thirty-one states and the District of Columbia have expanded eligibility for their Medicaid programs—leading to an estimated 13.3 million people gaining coverage since October 2013.1  Even in the 19 states that have yet to expand Medicaid eligibility, 2.4 million people enrolled—due to the ACA’s efforts to shed light on the program and simplify enrollment. A recent Commonwealth Fund survey found that three of five of these newly insured adults were uninsured prior to gaining Medicaid coverage.

Medicaid helps people get care and improve their health.

Seventy percent of new Medicaid enrollees who’ve used health services said they would not have previously been able to access or afford their care. In 2014, adults with Medicaid coverage reported getting recommended preventive care services at rates similar to those with private coverage (Exhibit 3). Another study compared adults in two southern states that expanded Medicaid eligibility (Arkansas and Kentucky) to those in Texas, which did not. It found that people in the expansion states had greater access to primary care, were less likely to skip medications due to cost, were less likely to visit the emergency department, and were more likely to say they were in excellent health.

Cancer, cardiovascular disease, and diabetes are responsible for the majority of deaths and healthcare costs in the United States. In 2008, the journal of the American Heart Association published a study entitled “The Impact of Prevention on Reducing the Burden of Cardiovascular Disease.” The authors found that:

  • about 78% of U.S. adults aged 20-80 years are “candidates for at least one prevention activity” that would reduce the risk of cardiovascular disease, such as taking aspirin, drugs that reduce LDL cholesterol, and drugs that decrease blood pressure.
  • “aggressive” but “feasible” implementation of such prevention strategies would reduce the number of heart attacks by 36% and the number of strokes by 20%, thereby increasing the average life expectancy of all adults by 1.3 years.
  • “if all the recommended prevention activities were applied with 100% success,” the costs of implementing these measures would be ten times greater than the savings of not treating the illnesses prevented.

Medicaid and the Children’s Health Insurance Program (CHIP) provide health and long-term care coverage to more than 70 million low-income children, pregnant women, adults, seniors, and people with disabilities in the United States. Medicaid is a major source of funding for hospitals, community health centers, physicians, and nursing homes.

The CBO report says it doesn’t give “any explicit prediction about which states would make which choices” and that “how individual states would ultimately respond is highly uncertain.” But with reduced federal Medicaid funding under the Senate bill, states would need to make some choices on “whether to commit more of their own resources to finance the program at current-law levels or to reduce spending by cutting payments to health care providers and health plans, eliminating optional services, restricting eligibility for enrollment through work requirements and other changes, or (to the extent feasible) arriving at more efficient methods for delivering services,” CBO says. 

By 2026, CBO estimates that 15 million fewer people would have Medicaid coverage, with 5 million of those being would-be enrollees in states that would have opted in to the expansion in the future under current law. The other 10 million reduction in the insured is due to “all other effects on enrollment.”

An Urban Institute report, published in June, analyzed the House health care bill’s impact on Medicaid. That bill would eliminate the enhanced federal funding for new enrollees in expansion states, beginning in 2020, and drop enhanced funding for current enrollees who have a gap in coverage of one month. The Urban Institute said: “Many states may have no choice but to eliminate coverage of the expansion population because they would be unable to substantially increase their own spending. Moreover, they have limited scope to cut benefits and provider payment rates.”

The  new Senate bill would cap Medicaid funding to the states starting in 2020. States will  struggle to find a way to continue coverage for populations that pre-dated the ACA (children, some parents, pregnant women, people with disabilities) as well as those made newly eligible under the ACA, and it’s impossible to see how they do so without scaling back on coverage eventually.

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