Policy and Regulation News

State Medicaid Expansion Should Reduce Emergency Room Visits

Delphine O'Rourke, Managing Partner of the Philadelphia office at Hall, Render, Killian, Heath & Lyman, mentioned state Medicaid expansion would be advantageous in the sense that it increases healthcare coverage for many low-income families.

By Vera Gruessner

The Patient Protection and Affordable Care Act brought a variety of changes for the healthcare industry as well as individual states. For example, the Affordable Care Act called on for Medicaid expansion among the 50 states. However, a Supreme Court ruling mandated that states have the right to expand their Medicaid programs on a voluntary basis.

Affordable Care Act

This led to a large number of states declining Medicaid expansion even though the federal government would provide 100 percent of the federal assistance necessary to expand this program during the first three years. Afterward, the federal government would provide 90 percent of the financial means to continue the greater coverage available through state Medicaid expansion.

Delphine O'Rourke, Managing Partner of the Philadelphia office at Hall, Render, Killian, Heath & Lyman, mentioned state Medicaid expansion would be advantageous in the sense that it increases healthcare coverage for many low-income families. O’Rourke provided additional details about the importance of Medicaid expansion and the Affordable Care Act in an exclusive interview.

HealthPayerIntelligence.com: What are the biggest benefits of Medicaid expansion?

Delphine O’Rourke: “The biggest benefits would be increasing your covered lives. These would be individuals who would otherwise not have access to health coverage. What are the benefits? Globally you have the benefit of having more of your citizens with access to healthcare. The idea would be to divert that population away from high cost emergency care.”

“There are two reasons why you are looking to divert your populations away from emergency care. First is, once you’ve gotten to the point where it’s an emergency situation, you have patients who are sicker than they otherwise would have been before they’re accessing healthcare. Therefore, their chances of recovery decrease.”

“When we’re looking at healthcare reform, the focus is on prevention and wellness. That’s how we can have a healthier population, a healthier American, a population that is taking less time away from work, and fewer chronic disease. Generally, as a population, we’re becoming sicker and more money is spent on our care. If you’re not covered, you generally wait until you are so sick that you have to go to the emergency room.”

“The second piece of that is emergency room care is very costly. So the benefits of Medicaid expansion is covering a population with preventive care. You’re looking at the  appropriate level and use of our healthcare services.”

“If you have the flu or bronchitis and you’re uninsured, you may go to the emergency room, but arguably that’s not the most appropriate level of care. You’re insuring a population that otherwise would seek its medical care not on the wellness prevention or the most appropriate point of contact with the healthcare system, but really when they are in crisis mode. That increase healthcare cost.”

“Another benefit is, under Medicaid expansion, the federal government is picking up most of the tab at least for the initial three years. There’s a proposal right now that would add another three years of 100 percent coverage through federal funds.”

“Even though the states have to cover 10 percent of the costs, you still have 90 percent of that funds are coming from the federal government and into the state economy. If you have a population that’s now insured, you’re fueling the economy. You’re hiring more employees and creating jobs. We call this the multiplier effect.”

“Those people who now have jobs will spend money in the community. They’re going to go restaurants. They’re going to buy groceries. They’re going to buy homes. This multiplier effect of Medicaid expansion is due to the federal government fueling in money, creating jobs, and also saving costs in healthcare because now the insured patients can get pre-acute care, manage their comorbidities, and get away from the acute care environment.”

“You have a more vibrant economy. This is a very direct effect of Medicaid expansion beyond even the healthcare environment. We’ve seen sales of homes increase. While the economics are still in flux, we’re getting to a tilting point where we’re now at 31 states and the District of Columbia that have all expanded Medicaid and we’re seeing the secondary multiplier effect of Medicaid expansion beyond merely the healthcare piece.”

HealthPayerIntelligence.com: Should the remaining 18 states that haven’t expanded their Medicaid programs do so? Why or why not?

Delphine O’Rourke: “The answer would be yes because eventually they’re going to be out of synch with the vision of the ACA. The ACA is here to stay. The ACA is focused on wellness and prevention. It’s focused on developing the continuum of care. It’s moving away from the acute hospital setting. Not everybody needs to be an inpatient in the hospital. That’s not necessarily where your best care is obtained for your specific issue.”

“To move to that model, you need to be able to manage your population. Let’s say I have a population of diabetics. What’s the best way to treat this disease? It might not be having them come in and have them be an inpatient. How can we treat and care for our patients differently?”

“Why expand Medicaid? There are economic incentives and what’s interesting is that many of the states that haven’t expanded Medicaid are Republican states and Southern states that are struggling economically. The argument has been ‘we’re already struggling and we’re not meeting our budget, so this is yet another expense’ without focusing on the multiplier effect. So why should they expand? The economic benefits well beyond healthcare.”

“Second of all, their costs. If this population isn’t taken care of through Medicaid, the states going to be taking care of them some other way. There’s an interesting study published by the Robert Wood Johnson Foundation found that states that haven’t expanded Medicaid, their healthcare costs are actually rising.”

“To think that if you’re not expanding Medicaid, you’re just not going to take care of this population is incorrect. You’re going to have to take care of the uninsured patients some way such as through emergency care.”

“Medicaid expansion so far is the best program. Is it the final solution? Maybe not, but based on the solutions that are on the table, it’s your best option.”

HealthPayerIntelligence.com: What advice would you offer health payers that are struggling to sell health plans through the insurance exchanges?

Delphine O’Rourke: “The answer is make it simpler. Think of your audience and make it clearer. What are you getting? What are your copays going to be? What are your deductibles? Make it easier to understand. Provide navigators.”

“If you’re looking at Medicaid expansion, you’re now covering up to 138% of the poverty level. That’s about $16,000. This is for people who only make little over $16,000 per year.”

“Make it easier to understand for your audience. In terms of the platinum, gold, silver, and bronze plans, those names are, in a lot of ways, misleading. People thought that since they signed up for gold plan, it must cover all their expenses, but it doesn’t. Maybe it’s gold compared to the other two. Make it user-friendly. If you’re selling a commercial product, you will market in a way that you’re audience understands what you’re selling. Then you have a satisfied customer.”

“The exchange is still incredibly confusing. There will be more funding for navigators. These are the people who you call up to find out how to navigate the website. This is proof that the information that is available is insufficient for the audience. They are your clients. Communicate in a way that your clients can understand.”

HealthPayerIntelligence.com: What can health payers expect for the future of the Affordable Care Act?

Delphine O’Rourke: “They should expect more insurance. There is going to be a continued push to have more people enrolled. The push right now is for enrollment. The second wave is going to be: who will take care of them? You’re going to have this new population of individuals who now have access to healthcare. Who’s going to provide the care?”

“That’s where you’re going to see a tiered system or a breakdown in the system. We already have a shortage of providers and physicians in the United States without millions of new insured patients. Who’s going to take care of them? They’re going to have access in theory but they won’t be able to get in.”