Some Medicaid expansion supporters overlook the policy’s tradeoffs – and their oversimplification of the research literature does a disservice to policymakers trying to understand expansion’s impact.

Consider this example.

On its website, the National Alliance on Mental Illness (NAMI), a staunch supporter of Medicaid expansion, claims:

In states that have expanded Medicaid, people are less likely to skip medications due to cost and more likely to seek regular care for their ongoing health conditions while reporting improvements in their overall health. [Links in original.]

Most readers would probably interpret the word “people” in that statement to mean the residents of expansion states, or perhaps Medicaid enrollees in expansion states. But that’s not who the studies NAMI cites are about.

Both studies (the first two links reference the same paper) focus exclusively on individuals targeted to gain coverage under Medicaid expansion. The first study limits its sample to 19-64 year-olds with incomes below 138% of the federal poverty level (FPL). The second study imposes the same age restriction but includes only those below 100% of FPL.

By excluding children, older adults, and those earning more than 138% (or even 100%) of FPL, these studies ignore the effects of Medicaid expansion on the vast majority of people – including the majority of Medicaid enrollees.

Of course, it’s perfectly legitimate, and highly relevant, to study the effects of Medicaid expansion on newly eligible individuals. The studies cited by NAMI were well executed and provide valuable information. But they simply don’t support the assertions NAMI is making.

The practice of interpreting these (and similar) studies as measuring the population-level impact of Medicaid expansion – all too common among news outlets, advocacy organizations, and even research centers – obfuscates the fact that Medicaid expansion creates winners and losers. Previously uninsured adults who gain Medicaid coverage are the clear winners. But by adding 20 million people (many of whom already had private insurance) to Medicaid’s rolls without meaningfully increasing the number of Medicaid providers, expansion likely exacerbated problems accessing timely care for those already on the program. Studies have found, for example, that Medicaid expansion was associated with a 10% increase in wait times in emergency departments and lower chances among Medicaid patients of getting an appointment with a provider. I discussed similar research in a previous post.

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Given its focus on mental health, NAMI should be especially alert to these findings. Nearly 157 million Americans – about half the U.S. population – live in areas with shortages of mental health professionals, which means many existing Medicaid beneficiaries faced barriers to access even before tens of millions of new enrollees began competing for a limited pool of providers.

Medicaid expansion’s impact on the mental health of existing enrollees has not received the attention such an important issue deserves, especially given that available evidence already points to a tradeoff between expanding coverage and maintaining access to care for those already relying on Medicaid.

In December, Mercatus senior research strategist Charles Blahous and I published research showing that expansion states have shifted financial resources away from low-income children (see the illustration below). If expansion states had kept pace with non-expansion states in the growth of per capita Medicaid spending on children from FY 2013 to FY 2019, an additional $504 per capita would have been spent on healthcare for children on Medicaid in expansion states, on average. Although our findings do not relate directly to mental health care, they illustrate the negative spillover effects of expansion.

*From “Unintended Consequences: How Medicaid Expansion Diverts Healthcare Spending Away from Kids,” by Charles Blahous and Liam Sigaud, Mercatus Center at George Mason University.*

It’s possible to acknowledge these challenges and still favor Medicaid expansion. Maybe NAMI believes that newly eligible enrollees are more in need of mental health treatment than existing enrollees, or that the gains of expansion outweigh the losses.

But instead of mischaracterizing the research literature to promote the idea that Medicaid expansion has no downside, NAMI and similar organizations should face the real-world consequences of expansion – and justify their stance.

Open Health Policy

Medicaid Expansion: Who Are We Talking About?