Providing better solutions for individuals on Medicaid expansion
The past several months have seen the emergence of numerous problems related to Louisiana’s Medicaid expansion to able-bodied adults. The Legislative Auditor reported late last year how an antiquated verification system left thousands of ineligible adults receiving Medicaid benefits. After outrage from the public and legislators, the Louisiana Department of Health removed tens of thousands of ineligible individuals from the Medicaid rolls, including nearly 1,700 beneficiaries with incomes of over $100,000 per year.
On the heels of the eligibility verification scandal, the Pelican Institute reported on a related phenomenon: Crowd out. This term refers to individuals who dropped their prior health coverage to enroll in Medicaid expansion — government programs crowding out private insurance.
Internal data from the Department of Health showed that in 2016 and 2017, several thousand individuals each month dropped their private coverage to enroll in Medicaid expansion. Unfortunately, the Department stopped compiling these crowd out statistics late in 2017. However, estimates suggest that crowd out has cost Louisiana taxpayers hundreds of millions of dollars annually. In other words, taxpayers have spent hundreds of millions each year providing health coverage to people who already had insurance prior to Medicaid expansion.
One easy solution would mitigate the cost of this crowd out phenomenon to taxpayers: Premium assistance. This term describes Medicaid-eligible individuals who remain on their private coverage, whether provided by an employer or purchased individually. Instead of going on to government-run Medicaid coverage, Medicaid will instead subsidize premiums and co-payments for individuals’ existing private coverage.
Premium assistance can represent a win-win for taxpayers and beneficiaries alike. Taxpayers save when Medicaid subsidies for a beneficiary’s private coverage cost less than putting the patient on the Medicaid rolls. Beneficiaries get to keep their existing insurance and often have access to broader doctor and hospital networks in their private plan than if enrolled in Medicaid. Beneficiaries also maintain personal responsibility by paying some portion of their private insurance premiums.
However, the Louisiana Department of Health has spent little time and energy promoting premium assistance for Medicaid expansion enrollees. Indeed, since rolling out its premium assistance program in July 2017, the Department has spent a mere $11,730.22 promoting this program to members of the public.
It would help to put this rather meager sum in perspective by knowing exactly how much the Department of Health has spent promoting Louisiana’s $3.1 billion Medicaid expansion over the past three years. But unfortunately, despite a public records request made on June 25, the Department has yet to release the total sum spent promoting Medicaid expansion.
Nevertheless, given the small amount spent promoting the premium assistance program, it stands as no surprise that its enrollment represents a mere fraction of the nearly 460,000 individuals enrolled in Medicaid expansion. According to the Department of Health, 891 Medicaid beneficiaries enrolled in premium assistance in September — only 0.19 percent of the 459,691 enrollees in Medicaid expansion that month. In no month has enrollment in premium assistance hit 1,000 beneficiaries.
State officials have an obligation to the public to serve as smart stewards of taxpayer dollars. Expanding Louisiana’s premium assistance program to more Medicaid-eligible individuals — or making enrollment mandatory for those eligible, as Utah recently did with its newly-approved Medicaid waiver — would help improve the efficiency of the Medicaid program. The Department of Health should increase its efforts to promote the value that premium assistance can bring to Louisiana working families and taxpayers.