Medicaid Opportunities & Challenges Task Force May 13, 2013 Jeff Bechtel, Senior Consultant

1. Summary of Research Findings – Economic, Health, & Personal Financial Impacts of Medicaid Expansion Medicaid Opportunities & Challenges Task Force May 13, 2013 Jeff Bechtel, Senior Consultant

2. Presentation Overview • Economic Impacts of Expansion • Health Impacts of Expansion • Personal Financial Impacts • New Findings – Oregon Medicaid Expansion Study 2

3. Economic Impacts of Expansion – “Multiplier Effect” • Research has shown that federal Medicaid dollars spur economic activity within a state beyond the initial investment. • The Kaiser Family Foundation issued a report that reviewed 29 state-level studies of Medicaid’s economic impact. Kaiser Family Foundation, The Role of Medicaid in State Economies: A Look at the Research (Jan. 2009); http://kaiserfamilyfoundation.files.wordpress.com/2013/01/7075_02_es.pdf • Numerous studies have been released by various entities estimating the number of jobs that would be created in specific states as a result of Medicaid Expansion. Examples: • Missouri Hospital Association: 22,000 Missouri jobs from 2014 to 2020. Source: University of Missouri School of Medicine, Department of Health Management and Informatics, and Dobson DaVanzo & Associates, LLC, The Economic Impacts of Medicaid Expansion on Missouri (November 2012); http://web.mhanet.com/uploads/media/MU_Medicaid_Expansion_Economic_Report.pdf 3

4. Economic Impacts of Expansion ̶ Jobs (cont’d) • University of Florida: 54,000 permanent Florida jobs over the next decade. Source: Alan W. Hodges and Mohammad Rahmani, Economic Impacts of the Patient Protection and Affordable Care Act in Florida,University of Florida, Food & Resource Economics Department (November 5, 2012); http://www.fha.org/reports_resources/files/RPT-Economic-Impact-of-the-ACA-in-Florida-11302012.pdf • The Hilltop Institute, a non-partisan health research organization in Baltimore: Nearly 27,000 new jobs in all sectors of Maryland’s economy by 2020. Source: S.H. Fakhraei, Maryland Health Care Reform Simulation Model: Detailed Analysis and Methodology, The Hilltop Institute (July 2012); http://www.hilltopinstitute.org/publications/MarylandHealthCareReformSimulationModel-July2012.pdf 4

5. Economic Impacts of Expansion – Mortality Rates • Research has shown that the expansion of Medicaid may reduce death rates. • By comparing three states that substantially expanded adult Medicaid eligibility since 2000 (NY, MA, AZ) with neighboring states without expansions, researchers concluded that mortality rates have been reduced significantly. • Source: Benjamin D. Sommers, M.D., Ph.D. et al., Mortality and Access to Care Among Adults After Medicaid Expansions, N. Eng. J. Med. (July 25, 2012). 5

6. Economic Impacts of Expansion – Access to Care • A large body of research shows that: • Medicaid increases access to care and lowers financial barriers to care. • On key measures on access to preventive and primary care, children in Medicaid and CHIP fare as well as children with private insurance, but adults face more difficulty. • Medicaid restricts cost-sharing, lowering financial barriers to access. • Source: Medicaid: A Primer. Kaiser Commission on Medicaid and the Uninsured, June 2013; http://www.kff.org/medicaid/7334.cfm(summary of research findings, page 20). 6

7. Personal Financial Impact – Financial Hardship • In addition, the financial security brought about by the Medicaid Expansion may also lead to reductions in bankruptcies. Medical debt factors into fully 62% of all bankruptcies. • Source: David Himmelstein et al., Medical Bankruptcy in the United States, 2007: Results of a National Study, 122 J. of Am. Med. 741 (August 2009). • An analysis of Oregon’s Medicaid expansion to uninsured adults found that • insurance coverage reduces by 40% the probability that people report having to borrow money or skip payments on other bills because of Medical expenses, and • decreases by 25% the probability that they will have unpaid medical bills sent to a collection agency. • Source: Katherine Baicker, Ph.D. & Amy Finkelstein, Ph.D., The Effects of Medicaid Coverage-Learning from the Oregon Experiment, 365 N. Eng. J. Med. (August 25, 2011). 7

8. Oregon Medicaid Expansion Study – Background • New research findings were published on Wednesday, May 1, 2013 in the New England Journal of Medicine. • The research uses data from Oregon, where the state held a lottery among low-income adults in 2008 for a limited Medicaid expansion. Of the 90,000 people who applied, 10,000 ultimately gained coverage. • The lottery gave researchers a unique opportunity to conduct the first randomized experiment on Medicaid coverage. • The analysis is based on 12,229 people – 6,387 of whom gained coverage. • The first study of the Oregon lottery population, published in 2011 found that new Medicaid enrollees tended to self-report better health after gaining coverage. Catastrophic out-of-pocket spending was virtually eliminated. 8

9. Oregon Medicaid Expansion Study – Findings • The new paper published on May 2, 2013 delved into greater details on how patients used the healthcare system and whether their health improved as a result. • The Study found that, compared to people who did not receive Medicaid coverage: • People with Medicaid used more health care services - more doctor visits, more medications and more tests. • People with Medicaid spent more money on health care overall. • People with Medicaid were less likely to go bankrupt due to health care expenditures. • People with Medicaid had less depression and overall, had better health-related quality of life. • People with Medicaid did not have meaningful improvements in their hypertension, cholesterol, diabetes, or other measures of overall health. 9

10. Oregon Medicaid Expansion Study – Observations • Lead study author Katherine Baicker: “You might very well expect changes to accrue over a long time period. That being said, one might have hoped that these particular conditions were amenable to treatment in the time frame we studied.” • Opponents of Medicaid expansion: “This throws up a huge stop sign in front of the Medicaid expansion. The benefits are highly questionable.” - Cato Institute health policy director Michael Cannon. • Proponents of Medicaid Expansion: The Medicaid program had a significant impact on reducing financial hardship and improving mental health outcomes. 10

11. Discussion 11

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