IHP 610 Module 6 Milestone Two Example

Milestone Two: Four Ways to Address the Coverage Gap, Compared

[Student Name]

Southern New Hampshire University

IHP 610: Health Policy and Law

Module Six Milestone Two

[Instructor Name]

[Date]

The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.

Milestone Two: Four Ways to Address the Coverage Gap, Compared

Milestone One framed the problem: about 180,000 low-income adults in the state fall between Medicaid and marketplace help, and Prairie Ridge Health carries much of the resulting unpaid care. This milestone identifies the realistic policy options under current federal law, sets criteria for judging them and compares them using the best available evidence.

The Criteria

Six criteria were chosen with input from the system's finance, legal and community health leaders. Coverage asks how many uninsured adults would gain insurance. State cost asks what the state would pay after offsets. Hospital finances asks how uncompensated care would change. Equity asks whether the option reaches groups most affected by the gap, including rural, Black and Hispanic adults. Administrative complexity asks how difficult the option would be to run. Political feasibility asks whether it could pass the current legislature and gain federal approval. Coverage and feasibility are weighted most heavily, since an option that cannot pass helps no one and one that covers few people does little.

Option A: Traditional Expansion

The state would extend Medicaid to adults up to 138% of poverty, with the federal government paying 90% of costs for the expansion group. An estimated 260,000 adults would gain coverage, including those now in the gap and some now buying marketplace plans. Gross state cost would be about $210 million a year, offset in part by savings in existing programs and a temporary federal matching bonus available to new expansion states.

What the Budget Evidence Shows

Opponents argue expansion will crowd out spending on schools and roads. Sommers and Gruber (2017) examined state budgets in the first two years of the Affordable Care Act expansions and found that expansion brought large increases in federal spending in expansion states without significant increases in state Medicaid spending or cuts to education, transportation or other programs. That period featured full federal funding, so it does not settle the question of costs once states pay 10%, but it weakens the claim that expansion inevitably squeezes other priorities.

Option B: Expansion Through Private Plans

Under a federal Section 1115 waiver, the state would use Medicaid funds to buy marketplace plans for newly eligible adults, as Arkansas did. Coverage would be similar to Option A, but per-person costs would be somewhat higher because private plans pay providers more, which would also benefit hospitals. The design may appeal to legislators wary of expanding a government program.

Comparing Traditional and Private Approaches

Sommers et al. (2016) surveyed low-income adults in Kentucky, which expanded traditional Medicaid, Arkansas, which used the private option, and Texas, which did not expand. Both expansion approaches produced large gains in coverage relative to Texas, along with more primary care use, fewer emergency visits, better management of chronic conditions and improved self-reported health. Differences between Kentucky and Arkansas were few, suggesting the private option can achieve similar results for patients.

Work Requirements as an Add-On

Some legislators will ask for work requirements as a condition of support. Sommers et al. (2019) studied Arkansas's requirement in its first year and found that Medicaid coverage fell among targeted adults while employment did not increase. Most of those subject to the rule already worked or qualified for an exemption, and many were confused about reporting. Adding such a requirement would reduce coverage and raise administrative costs, and courts have blocked several similar waivers.

Option C: Partial Expansion

The state would cover adults only up to 100% of poverty, closing the gap without moving people out of marketplace plans. Federal officials have generally not approved the enhanced 90% match for partial expansions, so the state would receive its regular matching rate of about 68%, making each enrollee more expensive to the state. About 150,000 adults would gain coverage.

Option D: A Larger Indigent Care Fund

The state would add $30 million a year to its indigent care program, which reimburses hospitals for part of the cost of treating uninsured patients. No one would gain coverage, but hospitals would recover a larger share of uncompensated costs. The option is politically easiest but does nothing for patients' access to primary care or protection from medical debt.

The Comparison

The table rates each option on the six criteria. Options A and B score similarly on coverage and hospital finances; B scores better on feasibility and worse on cost and complexity. Option C costs the state more per person and covers fewer people. Option D is feasible but fails on coverage and equity.

Table 1. Options Rated Against Criteria

Note. Composite estimates; costs are net of offsets and exclude the temporary federal bonus.

Weighing the Trade-Offs

With coverage and feasibility weighted most heavily, Option B emerges as the strongest choice: it matches traditional expansion on coverage, equity and patient outcomes and stands a better chance in the legislature, at a modest additional cost. Option A is preferable on cost and simplicity if the political climate allows. Option C costs more for less coverage, and Option D addresses hospital finances without solving the underlying problem.

Uncertainties

Cost estimates depend on enrollment, which has exceeded projections in some states. Federal waiver policy changes with administrations. And legislators may attach conditions, such as work requirements, that would change the option's performance. Milestone Three will plan advocacy that anticipates these risks. Litigation over waivers is a further risk: courts have set aside several approved waivers when they found federal officials had not adequately considered effects on coverage, which is one more reason to keep the design simple.

Conclusion

Judged against explicit criteria and evidence, expansion through private plans offers the best balance of coverage, equity, hospital benefit and political feasibility, with traditional expansion close behind. The comparison also gives Prairie Ridge a reasoned basis to oppose amendments, such as work requirements, that evidence shows would undercut coverage.

References

Sommers, B. D., Blendon, R. J., Orav, E. J., & Epstein, A. M. (2016). Changes in utilization and health among low-income adults after Medicaid expansion or expanded private insurance. JAMA Internal Medicine, 176(10), 1501-1509. https://doi.org/10.1001/jamainternmed.2016.4419

Sommers, B. D., Goldman, A. L., Blendon, R. J., Orav, E. J., & Epstein, A. M. (2019). Medicaid work requirements: Results from the first year in Arkansas. New England Journal of Medicine, 381(11), 1073-1082. https://doi.org/10.1056/NEJMsr1901772

Sommers, B. D., & Gruber, J. (2017). Federal funding insulated state budgets from increased spending related to Medicaid expansion. Health Affairs, 36(5), 938-944. https://doi.org/10.1377/hlthaff.2016.1666