Reasons for the wide variation in Medicaid participation rates among states hold lessons for coverage expansion in 2014

Abstract

The Affordable Care Act will expand Medicaid eligibility in 2014 to adults with incomes of up to 133 percent of the federal poverty level. To maximize this opportunity, policy makers need to ensure that participation, or "take-up," among eligible adults exceeds current rates. Using the Current Population Survey 2005-10, we estimated that the nationwide Medicaid participation rate was 62.6 percent among eligible adults ages 19-64 without private insurance. Take-up varied widely by state, from 43.0 percent in Arkansas and Louisiana to 82.8 percent in Massachusetts, after adjusting for population demographics. Participation was highest among disabled adults, 75.8 percent, and lowest among childless adults, 38.3 percent. Factors linked to higher take-up rates included low cost sharing for beneficiaries; more generous benefits; and greater use of managed care programs for Medicaid populations. Factors associated with lower take-up rates included the existence of asset tests in some states. Massachusetts's health reform was associated with a major increase in Medicaid participation. Our results suggest that when Medicaid is expanded in 2014, take-up may be less than anticipated because new enrollees will be offered a more restrictive set of benefits--known as "benchmark coverage"--compared to those in traditional Medicaid, and the majority of newly eligible adults will be in groups with traditionally low take-up (primarily nondisabled adults). To encourage high participation in the expanded Medicaid program, states will need to offer comprehensive coverage of needed benefits; provide community-based outreach; and consider more dramatic changes to their enrollment processes, such as automatically enrolling people in Medicaid based on their participation in other public programs.