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Arizona, Ohio Medicaid Proposals Jeopardize Coverage Gains

May 2, 2016 at 12:15 PM

Ohio and Arizona, where uninsured rates have fallen sharply since they adopted health reform’s Medicaid expansion, have now proposed Medicaid changes such as new premiums that would make it harder for low-income adults to afford and maintain coverage.  Ohio has made it clear that these changes would cause fewer people to enroll in Medicaid, and Arizona’s changes likely would as well.  That’s not surprising:  research has long shown that participation drops when people with little or no income have to pay premiums. 

The Ohio and Arizona changes would affect most of their non-elderly adult Medicaid beneficiaries, some who were eligible before health reform and some who gained coverage under the state’s Medicaid expansion.  Under both proposals, the state would create accounts for beneficiaries modeled on health savings accounts (HSAs), into which nearly everyone would have to make a monthly premium payment. 

These proposals, which require approval by the Department of Health and Human Services (HHS), are modeled on Indiana’s Medicaid expansion waiver, and it’s too early to know whether that state’s experiment with accounts has succeeded, as we’ve shown.

Ohio expects enrollment among beneficiaries covered under the waiver to be 9 percent lower than if it continued its program as is.  Arizona didn’t release enrollment projections, but given the similarities between the two states’ proposals — as well as studies on how premiums affect people with little or no income — enrollment there would likely drop significantly as well. 

The people who lose Medicaid coverage likely wouldn’t have an offer of coverage from their employer, and they wouldn’t be eligible for subsidies to buy marketplace coverage.  So most would end up uninsured.

Arizona’s uninsured rate has dropped by 33 percent and Ohio’s by 45 percent since health reform’s major coverage provisions took effect in 2014, and their decisions to expand Medicaid are a big reason why.  HHS’ criteria for proposed Medicaid waivers emphasize that they must, among other things, “increase and strengthen overall coverage of low-income individuals in the state.”  By acknowledging that fewer people will have coverage under its proposal, Ohio clearly fails this test.  And given the similarities between the two proposals, Arizona almost certainly fails as well.