At first glance, there may not seem to be much connection between the expanded Medicaid program and public health insurance exchanges and employer-provided coverage, but a closer look reveals at least two important ways employers will be affected.
On the plus side, since payments are now being made to providers for care that used to be uncompensated or provided more on an emergency basis, the rate of medical inflation more than likely will slow down in the group market over the next several years, as compared to what it otherwise would be. At the same time, however, a flood of newly insured Americans will make access to all health care services — and particularly primary care services — more challenging, considering that the number of providers will not change much.
Under the Affordable Care Act, Medicaid has now expanded in 22 states, plus the District of Columbia — with five other states pursuing alternative methods of expansion. Income eligibility for Medicaid in these states has risen to up to 138% of the federal poverty level (FPL) and is no longer restricted to certain segments of the population such as women, children, and the disabled. This has resulted in a 10% to 20% growth in Medicaid enrollment.
Layered on top of this development is the availability of a federally facilitated marketplace in 33 states, with the remainder providing state-run public health insurance exchanges. A centerpiece of this emerging marketplace is federal subsidies offered on a sliding scale even up to 400% of the FPL, which represents a major step toward making the safety net for public assistance more durable. The upshot: More than 8 million individuals have signed up for exchange plans, which is a big influx of enrollees.
Lower-paid workers — either part-time employees or those earning the minimum wage or close to it — have access to public assistance with health insurance if they earn less than 400% of the FPL. While employers haven’t done any significant outreach or coordination with Medicaid so far, it might be a strategy to consider. The law allows for some working Americans to have access to these benefits, and helping steer them in that direction could be good for everyone.
Mercer has assembled a panel of experts to reflect on key health care reform developments and share their expectations for the future. Branch McNeal is a Senior Partner at Mercer and National Practice Leader for Government Human Services Consulting, where he oversees Medicaid/CHIP and Medicare engagements.