Opting Out Of Medicaid Expansion: The Health And Financial Impacts

By Sam Dickman, David Himmelstein, Danny McCormick, and Steffie Woolhandler
Health Affairs Blog, January 30, 2014

The Affordable Care Act (ACA) was designed to increase access to health insurance by: 1) requiring states to expand Medicaid eligibility to people with incomes less than 138 percent of the Federal Poverty Level (FPL) ($19,530 for a family of three in 2013), with the cost of expanded eligibility mostly paid by the federal government; 2) establishing online insurance “exchanges” with regulated benefit structures where people can comparison shop for insurance plans; and 3) requiring most uninsured people with incomes above 138 percent FPL to purchase insurance or face financial penalties, while providing premium subsidies for those up to 400 percent of FPL.

Recent studies suggest that Medicaid expansion will result in health and financial gains.  Older studies also found salutary health effects of expanded or improved insurance coverage, particularly for lower income adults.

The Supreme Court ruled in June 2012 that states may opt out of Medicaid expansion, and as of November 2013, 25 states have done so.

The Consequences of Opting Out

The Supreme Court’s decision to allow states to opt out of Medicaid expansion will have adverse health and financial consequences. Based on recent data from the Oregon Health Insurance Experiment, we predict that many low-income women will forego recommended breast and cervical cancer screening; diabetics will forego medications, and all low-income adults will face a greater likelihood of depression, catastrophic medical expenses, and death.

The ACA’s tax subsidy for insurance purchase on the Exchanges is only available to persons with incomes above 100 percent of FPL.  People below this threshold in opt-out states (the so-called low-income “coverage gap”) will see no benefit as the law goes into effect.  They may even see harm because the ACA cuts disproportionate share (DSH) funding to safety net hospitals, reducing the resources available to care for the remaining uninsured.

Examining the numbers

Nationwide, 47,950,687 people were uninsured in 2012; the number of uninsured is expected to decrease by about 16 million after implementation of the ACA, leaving 32,202,633 uninsured.  Nearly 8 million of these remaining uninsured would have gotten coverage had their state opted in.  States opting in to Medicaid expansion will experience a decrease of 48.9 percent in their uninsured population versus an 18.1 percent decrease in opt-out states.

We estimate the number of deaths attributable to the lack of Medicaid expansion in opt-out states at between 7,115 and 17,104.  Medicaid expansion in opt-out states would have resulted in 712,037 fewer persons screening positive for depression and 240,700 fewer individuals suffering catastrophic medical expenditures. Medicaid expansion in these states would have resulted in 422,553 more diabetics receiving medication for their illness, 195,492 more mammograms among women age 50-64 years and 443,677 more pap smears among women age 21-64. Expansion would have resulted in an additional 658,888 women in need of mammograms gaining insurance, as well as 3.1 million women who should receive regular pap smears.


Apparently for no other purpose than to make a political statement, politicians in about half of our states are willing to expose about 8 million poor people to further financial hardship and greater impairment in health care access. More than 7,000 of those people will die as a result. That’s not simply politics; that’s a crime!

In a PNHP press release, Dr. David Himmelstein, co-author of the study and co-founder of PNHP said it well: “Medicaid is far from perfect. In many parts of the country Medicaid pays so little that patients have trouble finding a doctor who will accept it. A single-payer program like Canada’s that covers all Americans is a far better solution for both the poor and the middle class. But until we get to single payer, Medicaid is the only safety net for many low-income Americans.”

PNHP press releasehttp://www.pnhp.org/news/2014/january/more-than-7100-deaths-likely-from-…