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The Effects of Medicaid Expansion under the ACA: Findings from a Literature Review

Executive Summary

Research on the effects of Medicaid expansions under the Affordable Care Act (ACA) can help increase understanding of how the ACA has impacted coverage; access to care, utilization, and health outcomes; and various economic outcomes, including state budgets, the payer mix for hospitals and clinics, and the employment and labor market. These findings may also inform ongoing debates surrounding the Medicaid expansion. This brief summarizes findings from 61 studies of the impact of state Medicaid expansions under the ACA. It includes peer-reviewed studies as well as free-standing reports, government reports, and white papers published by research and policy organizations between January 2014 and May 2016, using data from 2014 or later. The brief only includes studies that examine impacts of the Medicaid expansion; it excludes studies on impacts of ACA coverage expansions generally (not specific to Medicaid expansion alone) and studies investigating potential effects of expansion in states that have not (or had not, at the time of the study) expanded Medicaid. In both the brief and the appendix tables, findings are separated into three broad categories: Medicaid expansion’s impact on coverage; access to care, utilization, and health outcomes; and economic outcomes. Key findings from the studies include the following:

Studies show that Medicaid expansion results in significant coverage gains. States expanding their Medicaid programs under the ACA have seen large increases in Medicaid enrollment,1,2,3,4,5 driven by enrollment of adults made newly eligible for Medicaid as well as enrollment growth among individuals who were previously eligible for but not enrolled in Medicaid.6,7 In comparison, non-expansion states have experienced slower enrollment growth.8,9,10,11 Numerous analyses demonstrate that Medicaid expansion states experienced large reductions in uninsured rates12,13,14,15,16,17,18,19,20,21  and that these reductions significantly exceed those in non-expansion states.22,23,24,25,26,27,28 The sharp declines in uninsured rates among the low-income population in expansion states are widely attributed to gains in Medicaid coverage.29,30,31,32,33 Additional research also suggests that Medicaid expansion has helped to reduce income- and race-based coverage disparities.34,35 

Most research demonstrates that Medicaid expansion positively impacts access to care and utilization of health care services among the low-income population, but some studies have not identified significant effects in these areas and more research is needed to determine effects on health outcomes. Many expansion studies point to improvements across a wide range of measures of access to care36,37,38,39,40,41 as well as utilization of some services,42,43,44,45,46,47  including behavioral health care services.48 Additionally, research suggests that Medicaid expansion improves the affordability of care and financial security among the low-income population.49,50,51,52,53, However, a few studies did not find significant effects of expansion on specific measures of access,54,55 utilization,56,57 or affordability.58,59,60,61 Some research shows that improved access to care and utilization is leading to increased diagnoses of certain chronic conditions.62,63 Studies also demonstrate that providers have experienced increases in Medicaid patient volume following expansion,64,65 and results are mixed with regard to provider capacity to meet increased demands for care.66,67,68,69,70 Although one study found modest improvements in measures of self-reported health following Medicaid expansions71 and another study documented provider reports of newly-eligible individuals receiving life-saving or life-changing treatments that they could not obtain prior to expansion,72 multiple analyses of self-reported health status have not found significant changes.73,74 Additional research is needed to provide longer-term insight into expansion’s effects on health outcomes.

Analyses find positive effects of expansion on multiple economic outcomes, despite Medicaid enrollment growth initially exceeding projections in many states. National, multi-state, and single state studies show that states expanding Medicaid under the ACA have realized budget savings, revenue gains, and overall economic growth.75,76,77,78,79,80,81 While projections show that states expect to experience net fiscal gains,82,83,84,85  at least one study shows annual deficits in later years as the state share of expansion costs reaches 10%.86 One national study found that slightly more than half of states implementing the expansion noted that enrollment initially increased faster than expected.87 However, that same study found that nearly two-thirds of expansion states reported that per member per month costs for the expansion population were at or below projections.88 Another national study found lower Medicaid spending per enrollee for the new ACA adult eligibility group than for other enrollees,89 and in Colorado, per capita expansion costs were lower than predicted despite overall expansion costs exceeding projections (largely due to higher than expected enrollment).90 Additional research shows that Medicaid expansions result in reductions in uninsured hospital visits91,92,93,94,95,96,97,98,99 and uncompensated care costs,100,101,102,103,104 whereas providers in non-expansion states have experienced little or no decline in uninsured visits and uncompensated care.105,106,107,108,109,110 Most studies of Medicaid expansion’s impact on employment and the labor market demonstrate positive effects or no negative effects.111,112,113,114,115

Issue Brief

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.