Brief • February 2015 Rural Implications of Medicaid Expansion under the Affordable Care Act Authors Introduction Erika Ziller, PhD In order for the Affordable Care Act (ACA) Medicaid expansion to effectively Jennifer Lenardson, MHS meet the needs of rural populations, implementation will need to be based on Andrew Coburn, PhD the underlying differences in rural and urban populations and on the unique Maine Rural Health Research Center University of Southern Maine needs of rural residents and health systems. Missing information that is critical to Muskie School of Public Service informing ACA implementation includes: the extent to which prior public health insurance expansions have covered rural populations; whether rural residents who are expected to be newly eligible for Medicaid in 2014 differ from their urban counterparts; the extent to which rural individuals might differentially benefit from the ACA Medicaid expansion in light of the expansion becoming optional; and whether rural enrollees are likely to have adequate access to primary care. SHARE is a Robert Wood This study addresses these knowledge gaps using the 2007-2011 panels of the Johnson Foundation (RWJF) Medical Expenditure Panel Survey (MEPS), linked with state-level Medicaid grant program that funds rigorous research on health reform at policy data and county-level primary care provider data. the state level, including state implementation of national reform. SHARE synthesizes the results of Background this research in order to establish an evidence base for state health In the years preceding ACA implementation, state Medicaid and/or Children’s reform and informs policy by Health Insurance Programs (CHIP) varied in the extent to which they included making research and analysis accessible to analysts and officials parents, the income levels at which parents were eligible, and the extent to through strategic translation and which eligible parents enrolled. By 2011, 24 states covered parents through a dissemination. SHARE operates out of the State combination of CHIP, Section 1115 Research & Demonstration waivers, and Health Access Data Assistance state-funded programs. More than 20 states also used waivers or state funds Center (SHADAC), an RWJF- to cover non-disabled childless adults, although benefits varied among states, funded state health policy research and technical assistance center in ranging from full Medicaid benefits to limited benefits to premium assistance the Division of Health Policy and programs for adults who met narrow criteria (Kaiser Commission on Medicaid Management, School of Public Health, University of Minnesota. and the Uninsured 2014). Among states without coverage expansions, access to Medicaid was often restricted to working parents with extremely low incomes (as little as 20% FPL) and typically excluded childless adults altogether (Rosenbaum 2009). Shortly after passage of the ACA, policy experts began to help states plan for Medicaid expansion by estimating the likely cost of adding new adult enrollees. These studies were somewhat limited because they used current Medicaid enrollees to project costs (e.g., Natoli, Chech, & Verghese 2011) instead of using individuals who were eligible but not enrolled or individuals who would be newly | State Health Access Reform Evaluation1 Rural Implications of Medicaid Expansion under the Affordable Care Act eligible under the ACA eligibility expansions—two expansion) by linking data from the 2007-2011 groups that could differ substantially from those who Medical Expenditure Panel Survey (MEPS) with were already enrolled in Medicaid. Some experts have state-level Medicaid policy data from the Kaiser argued that the uninsured are generally healthier Commission on Medicaid and the Uninsured and than Medicaid enrollees, so new enrollees’ service data on county-level primary care provider supply use should be lower than for current Medicaid and safety net programs from the Area Resource participants (Ku 2010). More recent studies File (ARF). The analysis was limited to non-elderly confirmed the notion that potential eligibles are adults (ages 19 to 64) with incomes below 138 healthier than current Medicaid enrollees, yet rural- percent FPL who were U.S. born and did not have urban differences remain unknown (Chang & Davis private insurance or Medicare. The resulting sample 2013; Hill, Abdus, Hudson, & Selden 2014). consisted of nearly 11,000 individuals, of whom roughly 2,200 (22%) lived in a rural area. Previous studies have also not fully assessed the extent to which rural individuals might differentially The analysis sought to (1) differentiate between benefit from the ACA Medicaid expansion in light current and potential Medicaid enrollees; (2) of the expansion becoming optional. When the ACA establish which potential enrollees lived in expansion was passed, rural health policy experts suggested versus non-expansion states; and (3) describe the that individuals living in rural areas were most likely characteristics of each enrollee group. Findings are to benefit from expansion given their generally based on bivariate statistical analyses, which assessed lower incomes and higher uninsured rates (Coburn, the differences between current and potential Lundblad, MacKinney, McBride, & Mueller 2010; Medicaid enrollees by residence and between rural Lenardson, Ziller, Coburn, & Anderson 2009). potential enrollees living in expansion versus non- However, with the Medicaid expansion becoming expansion states. a state option, the impact on rural access to health insurance coverage is unclear. Findings Finally, while researchers have begun assessing state- level provider capacity to serve new enrollees, the Assuming Full Participation, Rural Residents adequacy of the rural provider supply has not been Would Benefit More than Urban Residents evaluated. Ku et al., document large differences in from Medicaid Expansion primary care capacity across states and speculate Prior to ACA implementation, rural adults with that inner cities and rural areas may be at high risk incomes below 138 percent FPL were somewhat of poor provider availability (2011). However, the more likely than their urban counterparts to be authors did not empirically test this assumption and, uninsured (45% versus 43%). As shown in Figure 1, while they note that states with high uninsurance this small difference was driven primarily by lower rates also have a lower primary care supply, they did rates of Medicaid coverage among rural adults (21% not assess the extent to which rural communities versus 25% urban), since rural adults in this income may be affected. group were slightly more likely than urban adults to have private insurance or Medicare. Methods These rural-urban differences in Medicaid coverage This study examines the characteristics of low- and uninsurance rates among low-income adults income rural and urban adults potentially eligible likely reflect state differences in Medicaid policy for Medicaid under the ACA (i.e., those who were prior to the ACA. For example, during the study previously eligible but not enrolled and those period we found that only 18 percent of low- who are newly eligible under the ACA Medicaid income rural adults lived in states that had expanded | State Health Access Reform Evaluation2 Rural Implications of Medicaid Expansion under the Affordable Care Act Figure 1: Health Insurance Coverage incomes below 138 percent FPL compared to only Among Rural and Urban Non-Elderly 34 percent of those in urban areas. Thus, if all states expanded Medicaid and all eligible adults enrolled, Adults Below 138% FPL (2007-2011) the reduction in uninsurance rates would be greater Rural % Urban % in rural than urban areas. Private Insurance 26.3 25.4 Medicaid 20.4 25.0 Uninsured Low-Income Adults Are Medicare 8.0 6.4 Generally Healthier than their Medicaid- Uninsured 45.3 43.2 Covered Counterparts, but with Rural-Urban Source: 2007-2011 Medical Expenditure Panel Differences Survey (MEPS). Rural-urban difference significant at Recent studies examining differences between p < .05. individuals enrolled in Medicaid and other low- income adults who are uninsured have found the Medicaid to parents living at or above the poverty uninsured to be generally healthier than those with level, compared to 26 percent of low-income adults Medicaid coverage (Chang & Davis 2013; Hill, in urban areas. Among childless adults, there was no Abdus, Hudson, & Selden 2014). The results of this rural-urban difference in eligibility for Medicaid. analysis support these findings for both rural and In addition to having slightly higher uninsurance urban adults. Generally speaking, the health status rates among low-income adults, rural areas have of potentially eligible individuals differs from that a higher concentration of the uninsured living in of currently Medicaid enrollees in several key ways. the income range targeted by Medicaid expansion: In both rural and urban areas, potential enrollees 40 percent of uninsured adults in rural areas have (1) report themselves to be in fair or poor health less often than current enrollees; (2) report fewer chronic health Figure 2: Rural-Urban Differences in Health Status of conditions than current enrollees; Potential Medicaid Enrollees and (3) are less likely to be obese than current enrollees. Rural potential enrollees are less likely to smoke than current enrollees (47% versus 54%), but in urban areas smoking rates are the same for both current and potential enrollees (approximately 42%). Although our analysis indicates that potential Medicaid enrollees are in better health than current enrollees, potential enrollees living in rural areas are older (23% are aged 50 years or older in rural areas versus 19% in urban areas) and are more likely to have health problems Source: 2007-2011 Medical Expenditure Panel Survey (MEPS). than their urban counterparts. *Rural-urban differences in obesity rate significant at p < 0.10; other differences For example, 21 percent of significant at p < 0.05) rural potential enrollees report | State Health Access Reform Evaluation3 Rural Implications of Medicaid Expansion under the Affordable Care Act Figure 3: State Medicaid Expansion Rural Residents Are Less Likely to Live in Status Among Rural and Urban Adults States that are Expanding Medicaid (19-64) with Incomes Below 138% FPL Although our findings suggest that low-income rural adults are more likely than their urban counterparts Rural % Urban % to benefit from full Medicaid expansion, our Expanding Medicaid 37.9 49.7 findings also suggest that the potential impact of Alternative Model 4.4 1.6 the ACA is limited by the Supreme Court decision Not Expanding Medicaid 43.8 35.2 making the law’s Medicaid expansion optional for Source: 2007-2011 Medical Expenditure Panel Survey states. While 50 percent of urban low-income adults (MEPS) and Kaiser Commission on Medicaid and the Important live in a state that is expanding its Medicaid program Uninsured; Kaiser Family Foundation 2014. Information (as of January 2014), only 38 percent of rural low- income adults do (Figure 3). About 44 or factsof percent that Rural-urban difference significant at p < .05. themselves to be in fair or poor health, compared to all low-income rural adults live in a state with no the illuminate 18 percent of urban potential enrollees (Figure 2). plans to expand coverage in any form, comparedof the content Similarly, 30 percent of potential Medicaid enrollees to 35 percent of low-income adults in urban areas. in rural areas have two or more chronic health However, four percent of low-income adults in rural conditions, compared to only 23 percent of those in areas live in a state that has opted to expand coverage urban areas. Rural potential enrollees are also more through an alternative to Medicaid (e.g., Indiana likely to be obese than are urban potential enrollees has a waiver to enroll its low-income uninsured in (34% versus 30%). a program akin to a health savings plan), compared to 2 percent of low-income adults in urban areas. Figure 4: Percent of Rural-Urban Uninsured Rural Uninsured in Non-Expansion in Non-Expansion States with Safety Net States Have Lower Access to Safety Providers in their County (Adults age 19-64, Net Providers Rural potential Medicaid enrollees have access to a smaller number of primary care providers per capita, irrespective of their state’s decision to expand Medicaid. In expansion states, the average number of primary care providers per 100,000 rural residents is 49.6, compared to 79.9 for urban residents. In non-expansion states, there are 58.1 providers per 100,000 people in rural areas and 70.0 providers in urban areas. This finding suggests that rural uninsured individuals who gain Medicaid under the ACA might still have lower access to primary care than their urban Source: 2007-2011 Medical Expenditure Panel Survey (MEPS) and Kaiser counterparts. Commission on Medicaid and the Uninsured; Kaiser Family Foundation 2014 and Area Resource File. Access to health care is likely to be an even Rural-urban difference significant at p < .05. greater problem for potential enrollees | State Health Access Reform Evaluation4 Rural Implications of Medicaid Expansion under the Affordable Care Act who live in rural areas in non-expansion states. mission to serve underserved populations. Taken Compared to their urban counterparts, the rural together, these findings suggest that the decision by low-income uninsured are far less likely to live in a some states to not expand Medicaid may increase county with a formal safety net provider (Figure 4). disparities in access and uncompensated care burden These safety net providers have a mission to serve for some rural populations and providers. low-income populations regardless of their ability to pay and are a critical part of the health care Suggested Citation infrastructure for both the uninsured and Medicaid enrollees. However, just 51 percent of individuals Ziller, E., Lenardson, J., & Coburn, A. 2015. in rural areas have a federally qualified health center “Rural Implications of Medicaid Expansion under (FQHC) in their county, compared to 88 percent of the Affordable Care Act.” SHARE Issue Brief. individuals in urban areas. Similarly, only 12 percent Minneapolis, MN: SHADAC. of rural potential enrollees in non-expansion states have access to a community mental health center (CMHC), compared to 52 percent of their urban counterparts. Conclusion The findings from this study confirm that rural communities have much to gain from full Medicaid expansion under the ACA. Since their uninsured rates are higher than those in urban areas, and a greater concentration of their uninsured population falls within the ACA’s targeted income range, rural communities stand to see disproportionate coverage gains under Medicaid expansion. However, as of January 2014, low-income rural adults are less likely than their urban counterparts to live in a state that is expanding Medicaid (Kaiser Family Foundation 2014). As a result, the opportunity to eliminate the rural-urban gap in insurance coverage is unlikely to be realized unless additional states choose to participate in the future. At the same time, primary care resources are more limited for rural potential Medicaid enrollees, in both expansion and non-expansion states. This suggests the need for high-level health resource planning to ensure that rural communities can better meet the primary care needs of their populations. This is particularly true for rural communities in non-expansion states, where a large portion of the low-income uninsured lack access to providers such as FQHCs and CMHCs that have a formal | State Health Access Reform Evaluation5 Rural Implications of Medicaid Expansion under the Affordable Care Act References Chang, T., and Davis, M. 2013. “Potential Adult Medicaid Beneficiaries under the Patient Protection and Affordable Care Act Compared with Current Adult Medicaid Beneficiaries.” Ann Fam Med 11(5): 406-411. Hill, S., Abdus, S., Hudson, J., and Selden, T. 2014. “Adults in the Income Range for the Affordable Care Act’s Medicaid Expansion Are Healthier Than Pre-ACA Enrollees” Health Aff 33(4): 691-699. Coburn, A., Lundblad, J., MacKinney, A., McBride, T., & Mueller, K. 2010. “The Patient Protection and Affordable Care Act of 2010: Impacts on Rural People, Places, and Providers: A First Look.” Columbia, Mo: Rural Policy Research Institute (RUPRI). Lenardson, J., Ziller, E., Coburn, A., & Anderson, N. 2009. “Profile of Rural Health Insurance Coverage: A Chartbook.” Portland, ME: University of Southern Maine, Muskie School of Public Service, Maine Rural Health Research Center. Kaiser Commission on Medicaid and the Uninsured. 2014. “Where Are the States Today? Medicaid and CHIP Eligibility Levels for Children and Non-Disabled Adults as of January 1, 2014.” Menlo Park, CA: Kaiser Commission. Fact Sheet. Kaiser Family Foundation. 2014. “Status of State Action on the Medicaid Expansion Decision, 2014.” Retrieved from http://kff.org/ health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act. Natoli, C., Cheh, V., & Verghese, S. 2011. “Who Will Enroll in Medicaid in 2014? Lessons from Section 1115 Medicaid Waivers.” Washington, DC: Mathematica Policy Research. Rosenbaum, S. 2009. “Medicaid and National Health Care Reform.” N Engl J Med 361(21): 2009-2012. Ku, L. 2010 “Ready, Set, Plan, Implement: Executing the Expansion of Medicaid.” Health Aff 29(6): 1173-1177. Ku, L., Jones, K., Shin, P., Bruen, B., & Hayes, K. “The States’ Next Challenge—Securing Primary Care for Expanded Medicaid Populations.” N Engl J Med 364(6): 493-495. | State Health Access Reform Evaluation6