Medicaid program expansion

A central goal of the Affordable Care Act (ACA) is to expand access to health care insurance for all Americans. One way the act achieved this goal was through broadening eligibility for Medicaid coverage; as a result, the Medicaid program is a rapidly growing source of health coverage in the U.S. However, the effects of this expansion vary greatly between states. Medicaid is a complex program administered by the states but with many federal requirements and supported by federal funding. As a result of this unique structure, states administer the program and make coverage decisions, but the federal government sets some requirements for the program and provides financial support. Funding for the program ranges from a 50/50 mix of state and federal funding in some areas to others in which the state receives $3 in federal funding for each dollar spent.

Program eligibility varies among the states. All states provide coverage for children in low-income families, seniors in need of nursing home care, people with disabilities, and pregnant women; however, at present, coverage differs greatly for other groups, including low-income parents or childless adults.

This column describes changes occurring in the Medicaid program that have the greatest impact on practicing surgeons. Because the Medicaid program is so complex and variable from state to state, the American College of Surgeons (ACS) must keep its efforts to advocate for Medicaid patients and the surgeons who participate in the program focused on those areas of most importance to its constituencies.

What were the intended changes to Medicaid in the ACA of 2010?

One of the primary goals of the ACA was to reduce the number of uninsured throughout the country. The ACA sought to achieve this objective through several means, including making it easier for middle- income Americans to enroll in private insurance plans and for low-income Americans to obtain Medicaid coverage.

As passed, the law required the states to expand Medicaid to provide coverage to all Americans with incomes below 138 percent of the poverty level or lose all federal funding. The federal government picks up 100 percent of the cost of those individuals newly enrolled under the expansion from 2014 through 2016, then falling gradually to 90 percent in 2020 and beyond. States also have the option of applying for a waiver to expand coverage by other means.

Is Medicaid expansion beneficial for surgeons and their patients?

Despite a number of persistent issues with the Medicaid program (discussed later in this column), Medicaid expansion provides benefits to both surgeons and their patients. Newly covered patients in the Medicaid program were, by and large, previously uninsured, meaning any care they received before securing Medicaid coverage likely was uncompensated. For more information about how surgeons believe Medicaid expansion is affecting their practices, see the related article in this issue.

Why haven’t all states expanded coverage?

In its June 2012 ruling on the constitutionality of the ACA, the U.S. Supreme Court determined that the expansion as drafted was too coercive to the states, but left the rest of the law largely in place. This caveat effectively made expansion voluntary, yet with full federal funding during the first few transition years.

As of the beginning of March 2016, 31 states plus the District of Columbia had expanded coverage, including seven states that chose to do so under a waiver (although Pennsylvania later transitioned to a more traditional system).* States that have chosen not to expand have cited several concerns, including the federal government’s ability to maintain its share of funding, cost of the expansion to the state once the period of full federal funding ends, and general opposition to the ACA.


Figure 1. Medicaid expansion by state



How has Medicaid expansion affected coverage rates in the states?

According to the Kaiser Commission on Medicaid and the Uninsured, Medicaid enrollment in 2015 increased 18 percent across the 32 expansion areas (including DC), and some states saw much higher increases than had been projected due to pent-up demand for coverage among the uninsured. In those states that did not expand Medicaid, enrollment increased by 5.1 percent. Some of the increase in non-expansion states is attributable to those individuals who went to the exchange to purchase a plan and learned they were eligible for Medicaid.

What are some of the top concerns for surgeons who participate in the Medicaid program?

One concern is that state Medicaid programs will not cover certain services. Although Medicaid covers most common and necessary surgical services, particularly in the hospital setting, coverage decisions can vary from state to state, particularly with respect to bariatric surgery and certain types of cancer care, as well as new high-cost treatments for other surgical conditions.

Surgeons and other physicians often cite the level of compensation that Medicaid provides as a cause for concern. Surgeons may be paid significantly less for treating Medicaid patients than they receive for providing care to patients with private insurance.

Access to timely surgical care for Medicaid patients also is a concern. Due to the lower payment rates, as well as administrative burdens and other barriers, states may have too few participating surgeons or those surgeons who do participate may limit the number of Medicaid patients they will see. As a result, Medicaid patients are more likely to receive care when their conditions have progressed and, therefore, experience more negative, impairing outcomes.

Has the ACS taken a position on Medicaid expansion in the remaining states?

The ACS supports expansion of health insurance coverage to the uninsured but has not taken a formal position on the ACA Medicaid expansion. However, in those states where the local ACS chapter is addressing Medicaid expansion, the ACS Division of Advocacy and Health Policy may be able to provide support in their advocacy efforts.

What is the ACS doing to improve Medicaid for patients and surgeons, and what can Fellows do to help?

The ACS, working with other stakeholder organizations, will continue to monitor state Medicaid expansion and weigh in on any legislative efforts to modify the program or alter coverage or payment rates as appropriate. Specifically, the Division of Advocacy and Health Policy will look for opportunities to support efforts to increase access to surgical care by providing reimbursement and coverage for all appropriate surgical procedures. Although the division staff is unable to respond to individual billing or coverage issues that surgeons may experience, we encourage interested Fellows and ACS chapter executives to contact the federal and state teams in the Washington, DC, office to bring coverage, payment, or other legislative proposals to the College’s attention. E-mail questions or comments about Medicaid coverage and expansion to

*Rudowitz R, Snyder L, Smith V. The Kaiser Commission on Medicaid and the Uninsured: Medicaid enrollment and spending growth: FY 2015 and 2016. Available at: Accessed March 8, 2016.

The Henry J. Kaiser Family Foundation. Status of state action on the Medicaid expansion decision. Available at: Accessed March 14, 2016.

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