State experiments to test whether premiums and complex incentives can encourage Medicaid enrollees to adopt healthy behaviors haven’t achieved their goals, partly because many enrollees don’t fully understand the new rules. Nevertheless, the Trump Administration has approved state proposals requiring enrollees to comply with even more complex requirements to keep their Medicaid. New research based on a survey of low-income people in three states provides further evidence that many people subject to these proposals will likely become uninsured.
The survey compared experiences in Kansas, which hasn’t adopted the Affordable Care Act’s Medicaid expansion; Ohio, which adopted the expansion; and Indiana, which expanded its Medicaid program through a waiver called the Healthy Indiana Plan (HIP). HIP enrollees with incomes above the poverty line lose coverage if they don’t pay their premiums, while lower-income enrollees who don’t pay their premiums get fewer benefits and pay cost-sharing charges. All enrollees also have “POWER accounts,” modeled on health savings accounts, and enrollees who pay their premiums can roll over part of the funds left in the account at the end of the year and use them to reduce their premiums the following year.
Not surprisingly, the survey found that health coverage rates were much higher in Ohio and Indiana than Kansas, which didn’t expand Medicaid. But it also found an important difference between the two expansion states: Indiana respondents were likelier than those in Ohio to report that they’d delayed getting health care due to costs. Moreover, fully 39 percent of Indiana respondents who said they had Medicaid said they hadn’t heard of the POWER accounts, while 26 percent had heard of them but didn’t consistently make their required payments. Latinos, men, and those with less education were significantly less likely to hear of the accounts — a problem that could increase health disparities, the authors noted. Nine percent of uninsured Indiana respondents reported that they lost coverage for not paying premiums.
This survey adds to the robust body of research showing that premiums depress Medicaid participation and that enrollees risk losing coverage if they don’t fully understand complex policies. But under new waivers approved this year in Kentucky, Indiana, Arkansas, and New Hampshire, enrollees will lose their coverage if they don’t work or engage in work activities for a specific number of hours per month, pay premiums, or renew their coverage on time. Enrollees will face significant obstacles to keeping their coverage due to the new rules’ complexity and the likelihood that errors will occur. For example, Kentucky enrollees, who beginning on July 1 could lose coverage for failing to meet a work requirement, pay premiums, or renew their coverage or report income changes on time, have received a 50-page resource guide with complicated explanations of the new rules and how they apply in various situations.
Many eligible people will likely lose coverage simply because they don’t understand the new requirements or get caught in red tape — which would conflict with Medicaid’s purpose: to provide health coverage to people who otherwise wouldn’t have it.