Different rates in different states: ACA enrollment variations and the future of health care

Despite facing technical and political challenges, the Affordable Care Act (ACA), often called Obamacare, has helped bring health care coverage to millions of uninsured Americans through its insurance exchanges and expansion of Medicaid programs. Enrollment figures in these two programs vary widely from state to state, with some states insuring nearly all of their citizens while others have barely made a dent in reducing the size of their uninsured population. A new study examines these variations to determine their causes and what those differences mean in face of efforts to repeal and replace the ACA.

The study, published in the Journal of Health Politics, Policy and Law by Timothy Callaghan, PhD, assistant professor in the Department of Health Policy and Management at the Texas A&M School of Public Health, and his University of Minnesota colleague Lawrence Jacobs, PhD, analyzes why insurance exchange and Medicaid enrollment varied dramatically across states, controlling for the size of each state’s uninsured population prior to the enactment of the ACA.

“Texas enrolling a million people doesn’t mean much in a comparative context if there are still almost five million uninsured,” Callaghan said. With these adjusted enrollment figures, the researchers calculated the effects of four factors on ACA enrollment: partisanship, economic measures (state affluence and state unemployment rates), state administrative capacity and percentage of the state that voted for President Obama in the 2012 election.

The researchers found that insurance exchange and Medicaid enrollment rates were each highly correlated with state unemployment rates. Insurance exchanges saw a negative effect from high unemployment, which Callaghan said is hardly surprising, as insurance involves an extra cost that unemployed people might not be willing to take on. Unemployment had the opposite effect on Medicaid, with states with higher unemployment rates seeing higher Medicaid enrollment rates. This effect was much more noticeable in states that expanded their Medicaid programs.

Each state’s support for President Obama in 2012 proved to be another significant factor in exchange enrollment, even after controlling for partisanship in the state. States that were supportive of President Obama had populations who were more willing to enroll in the exchange. “How a state viewed Obama mattered,” said Callaghan, “but only when analyzing exchange enrollment, on the Medicaid side, Obama support was insignificant.”

The second factor affecting each state’s Medicaid enrollment is the relative competence of the state’s administrative apparatus. States with a history of having competent administrators were more effective at finding and enrolling eligible people, leading to higher enrollment rates. Callaghan said this indicates the potential value of investing in competent administrative staff. “If you have rule-guided civil servants used to running large programs, then the extra burdens of the Affordable Care Act are not as difficult to manage,” he said.

The study also gives insight into the future of health insurance in the United States under the Trump administration and Republican-controlled Congress. Efforts to repeal and replace all or portions of the ACA will be technically and politically challenging. Portions of the law, such as restricting denials for pre-existing medical conditions, are popular, and taking health insurance away from people who have it would be politically difficult. Regardless of what happens, it is reasonable to assume that a lot of control will shift from the federal level to individual states. This means that state administrative competence will become increasingly important and that states will need to learn from each other as they try to innovate. “States without much experience in healthcare may look to other states for guidance,” said Callaghan, “using new discretion gained under President Trump to implement policies that successfully cover the uninsured and are fiscally sustainable.”

The ACA and healthcare policy in general are complex, and there is still plenty of work to be done to understand how enrollment differences play out. Callaghan emphasizes there will be more to learn as we move into an uncertain future. “A lot of this is up in the air,” he said.