Medicaid Demonstrations Point the Way to Beneficiary Wellness After the Pandemic

Medicaid Demonstrations Point the Way to Beneficiary Wellness After the Pandemic

Evidence from Mathematica’s recently released evaluation of alternative Medicaid expansions offers insights on how Medicaid programs can support the health of beneficiaries as the nation recovers from the COVID-19 pandemic.

Evidence from Mathematica’s recently released evaluation of alternative Medicaid expansions offers insights on how Medicaid programs can support the health of beneficiaries as the nation recovers from the COVID-19 pandemic.

In the coming months, the rollout of COVID-19 vaccines will provide a long-awaited opportunity to stabilize the U.S. health care system and population health. Studies have found that during the pandemic, people have avoided needed care, resulting in worsening medical conditions, exacerbated health disparities, and predicted excess deaths from diseases like cancer. Medicaid covers one in five Americans, giving it a uniquely important role in pandemic recovery. How can Medicaid programs support the wellness of beneficiaries as the health system gets back on track?

Evidence from Mathematica’s recently released evaluation of alternative Medicaid expansion demonstrations offers useful insights. In partnership with the Centers for Medicare & Medicaid Services, we examined the outcomes of section 1115 demonstrations from 2014 to 2017 in six states—Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire—that tested new approaches to administering Medicaid for adults with low incomes. These states implemented one or more of the following policies: healthy behavior incentives, mandatory premium assistance that supports enrollment in qualified health plans, and premiums or monthly account payments.

Demonstrations with beneficiary incentives, premium assistance, or monthly payment programs from 2014 through 2017

State Demonstration implementation date Beneficiary incentives for health behaviors Mandatory Marketplace enrollment (premium assistance) Premiums or other monthly contributions (monthly payments)
Arkansas January 2014   a
Indiana February 2015  
Iowa January 2014 Ended Dec 2015
Michigan April 2014  
Montana January 2016    
New Hampshireb January 2016    

a Arkansas’s monthly payments started in January 2015, paused in April 2016, and resumed in January 2017.

b New Hampshire implemented premium assistance in 2016 after expanding Medicaid coverage in 2014.

Our evaluation built on existing evidence, generating the following cross-state findings on service use, access, and enrollment. These findings suggest ways to help adults with low incomes catch up on needed care.

  • Highly targeted, understandable incentives motivate beneficiaries to seek recommended care. Medicaid beneficiaries living in states that offer a financial incentive for wellness visits were more likely to have such visits and tended to complete their visits sooner than beneficiaries in comparison states. Preventive service use was also consistently higher in demonstration states than in comparison states, but we otherwise found little evidence of differences in other health service utilization or health changes stemming from the incentivized behaviors. Combined with evidence from the demonstration states’ own evaluations on beneficiary understanding of incentives, our findings suggest that incentives can positively affect beneficiary behavior if they are directly related to specific recommended services and easy to understand.

    From insight to action: Currently, states can only extend financial incentives for health behaviors through section 1115 demonstration authority. However, Medicaid managed care plans have developed their own rewards to promote preventive services and, like states, have a strong interest in helping beneficiaries re-engage in their care. Managed care plans have the flexibility to provide rewards because they receive capitated payments and may be able to cover the cost of rewards if they offset other health care costs. More than two-thirds of Medicaid beneficiaries nationwide are enrolled in managed care, suggesting an administratively simpler way to extend incentives.

  • States can promote receipt of recommended care by ensuring that Medicaid beneficiaries can see a doctor. Access to care is enhanced by higher physician reimbursement rates. States with premium assistance demonstrations pay the cost of premiums to enroll Medicaid beneficiaries in qualified health plans in the federally facilitated Marketplace instead of paying for coverage through fee-for-service Medicaid or Medicaid managed care. We found that beneficiaries in premium assistance states had a higher probability of having a physician office visit than their counterparts in other states, as early as two months into their enrollment spans. Premium assistance also appears to reduce unmet needs for care at the population level, based on the percentage of national survey respondents reporting that they had a checkup in the last year and that they have a personal provider. These findings are consistent with one of the reasons demonstration states chose to implement premium assistance: relatively high levels of physician reimbursement under qualified health plans can lead to better access to care. However, we also found that premium assistance probably costs more for states to administer than direct Medicaid coverage.

    From insight to action: States need not enact premium assistance demonstrations to establish policies based on this evidence. States and health plans can adjust Medicaid reimbursement rates without waiver authority. Raising provider reimbursement in the current fiscal climate could be difficult, but states and health plans should consider ways to structure reimbursement for essential services that would help support a return to normal care patterns.

  • Coverage is a major determinant of access to care. Premiums or monthly beneficiary account payments negatively affect coverage rates among Medicaid-eligible adults. Premiums are a common policy tool for familiarizing low-income, able-bodied adult Medicaid beneficiaries with a feature of commercial health insurance. But asking people with limited incomes to make such payments keeps many of them from enrolling. People who live in states with premiums are less likely to enroll in Medicaid, regardless of whether they are expected to owe any premiums. We found an even lower probability of enrollment among those who do owe premiums. Premiums also caused enrolled beneficiaries to drop out, shortening the average duration of enrollment by 16 percent. These findings are consistent with prior studies of enrollment uptake and enrollment continuity among low-income adults and children with premium requirements.

    From insight to action: As a condition of increased federal financial participation during the public health emergency, the Families First Coronavirus Response Act currently prohibits states from disenrolling Medicaid beneficiaries for nonpayment of premiums—or from attempting to collect unpaid premiums after the emergency. But Medicaid premiums might still be common after the pandemic. States with demonstration authority for premiums should consider how this policy could affect pandemic recovery efforts. And states interested in pursuing demonstration authority for this policy should carefully consider how it positions them to manage future crises.

Individual behavior has been an important factor in determining the trajectory of the COVID-19 pandemic, and it will be no less important in recovery efforts. Our findings show how states and health plans can use policies to influence uptake of Medicaid coverage, access to care, and use of preventive services. States and health plans can use these lessons to promote the health of adults with low incomes and to achieve longer-term objectives for state Medicaid programs once the current public health emergency has ended.

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