Medicaid Expansion May Restrict Access to Care

Published April 25, 2012

According to a recently released study, President Obama’s expansion of Medicaid, intended to add upwards of 16 million Americans to the program, could actually restrict access to health care for those in the program unless the government increases provider reimbursement levels.

The Center for Studying Health System Change published a study comparing the effects of expanding coverage of Medicaid and the subsequent costs for doctor visits. The study, utilizing a 12-year National Health Interview Survey to analyze outcomes for children from all four socioeconomic quartiles, determined an increase in physician’s fees improved access to care.

Study author Chapin White focused his analysis on the Children’s Health Insurance Program (CHIP) as the most recent major expansion of public coverage not extensively studied. When coverage expanded, physicians weren’t necessarily utilized more, White found. An increase in reimbursement allowances to providers did improve access for children in the low socioeconomic quartiles and potentially in the higher as well.

Expansion Could Cause Problems

According to Avik Roy, senior fellow at the Manhattan Institute, indicators of access may be mixed but have obvious implications—in this case, that unless states foot the bill for increased appointments past the federal funding expiration date of 2015, access will take a major hit.

“Combined with everything else we know about Medicaid, this study shows that Medicaid is going to cause problems,” Roy said. “Physician fees are going to go down, not up, [and] quality of care is directly associated with physician reimbursement.”

“The aggregate utilization of physicians in the system stayed the same, roughly speaking,” Roy explained. “For very poor people who didn’t have insurance, those in the fourth socioeconomic quartile, their access to care increased somewhat, but for other people, access to care decreased. So for those who had alternate coverage, were on Medicaid or private coverage already and shifted to the CHIP program, their access decreased. Also, people on private insurance may not have changed. What the coverage did was redistribute coverage from people who did have insurance to people who didn’t.”

Devon Herrick, a senior fellow at the National Center for Policy Analysis, says he views the study as evidence of a necessary increase in funding to support an increase in physician utilization, and if states cannot fund the increase in doctors’ services once federal funding stops in a few years, access to specialist and even routine appointments could be difficult to attain.

“We know there have been numerous studies that [found] people who are uninsured or have private coverage have an easier time getting a new appointment with a primary care provider or specialists,” Herrick said. “I think what the study found was that Medicaid enrollment didn’t really increase utilization, but the reimbursement does matter. How much a doctor got paid had an effect on how easy it was to see that doctor.

“Medicaid is a 50-state patchwork, so each state has its own reimbursement schedule. States with the most generous eligibility have some of the smallest, most paltry, reimbursement rates,” Herrick added.

Mixed Indicators of Access

White says viewing the study’s results as a definitive relationship between Medicaid expansion and a reduction in access to health care would be a misinterpretation.

“The study’s bottom line is that increasing physician fees clearly increased children’s access to physician services, while the effects of coverage expansions under CHIP were less clear,” White said. “The study compares trends in indicators of access to physician care in states with large verses small CHIP expansions. The study also examines indicators of access in states with increases verses [those with] decreases in Medicaid physician fees. The differences between the trends in large- versus small-expansion states were mixed.”

White gave the example of increased access to emergency department visits among low-income children in large-expansion states compared to another indicator, non-cost-related access problems among upper-middle income children, showing a decline in access.

“Trends in the rest of the indicators of access were not statistically different between large- versus small-expansion states and showed no clear pattern,” he said.

Implications for Policymakers

White points out President Obama’s law increases the fees state Medicaid programs pay to primary care physicians for certain services, but only temporarily. The increase applies in 2013 and 2014 only, and is limited in scope.

“Policymaking involves tradeoffs, and this study helps clarify those tradeoffs,” White said. “Extending that provision would, obviously, increase state and federal outlays for the Medicaid program. At the same time, the study findings indicate that maintaining higher Medicaid payment rates for primary care physicians beyond 2014 might help expand access to physician services.”

Herrick says the study confirms expansion without increased reimbursement would decrease access.

“I think what policymakers should do with the information is something they already know: If you really want [to increase] your Medicaid enrollees’ access to care, the amount of money you’re willing to reimburse your doctors does matter,” Herrick said. “The Affordable Care Act does increase reimbursement . . . for two years, but then it’s up to the states. When you talk about the states taking on a burden they can’t afford, that’s it.

Roy stresses funding increases alone cannot solve the many problems with the current Medicaid system.

“Dramatic expansion of Medicaid is not a good idea,” Roy said. “A better approach is to give people access to private insurance. Medicaid is a disaster. The best policy route is to repeal Obamacare and privatize Medicaid, giving governors the ability to replace Medicaid with subsidized private insurance. Medicaid is inadequate.”


Internet Info:

“A Comparison of Two Approaches to Increasing Access to Care: Expanding Coverage versus Increasing Physician Fees,” Health Services Research: