Louisiana expanded Medicaid on July 1, one of just a handful of southern states to take this option under health reform. Louisiana has already enrolled a quarter-million new people in Medicaid, which underscores the state’s unmet need for health care coverage. It also speaks to the unmet need in the region generally. Nearly 90 percent of low-income uninsured Americans who don’t have access to Medicaid coverage because their state hasn’t expanded live in the South.
The nation has experienced historic gains in health coverage since health reform’s major coverage provisions took effect in 2014. The biggest gains have come in states that have expanded Medicaid, most notably Arkansas (which slashed its uninsured rate among adults from 22.5 percent to 9.6 percent in two years) and Kentucky (where the rate fell from 20.4 percent to 7.5 percent). This isn’t surprising because both states provided extremely limited Medicaid coverage to poor parents before health reform and no coverage to poor adults without children. Under health reform, states can expand Medicaid to cover parents and childless adults with incomes up to 138 percent of the poverty line (about $16,400 for an individual and $27,800 for a family of three).
Medicaid coverage is improving the well-being of expansion enrollees in Arkansas and Kentucky, research shows. For example, newly eligible adults are getting regular medical care at a higher rate than adults in Texas, which hasn’t expanded. Arkansas and Kentucky residents also are finding it easier to pay their medical bills, and fewer are skipping medications due to cost than in Texas.
Louisiana is poised to make similar progress. Over time, it expects as many as 450,000 people to enroll in Medicaid, which will go a long way toward connecting vulnerable residents with needed health care. 30 percent of uninsured Louisianans who are newly eligible for Medicaid suffer from a mental illness or a substance use disorder.
As more people gain health coverage, Louisiana expects to spend less on payments to hospitals to help cover their costs for providing uncompensated care. It also expects to collect more revenue from the tax it levies on the Medicaid managed care plans covering the new enrollees. These factors are why Louisiana expects expansion to produce savings of $180 million this fiscal year, as well as savings in coming years.
Despite the clear benefits of expansion for people and state budgets, 19 states still haven’t expanded. As a result, 2.9 million uninsured adults in these states are caught in a “coverage gap”: their incomes are too high for Medicaid (the typical income limit in non-expansion states is only 44 percent of the poverty line, or $8,840 for a family of three) but too low to qualify for subsidies to buy marketplace coverage. Fully 89 percent of these uninsured adults live in the South and 55 percent are people of color.
Opposition to Medicaid expansion in the South may be unraveling further. For example, lawmakers in Georgia and Tennessee are beginning to discuss proposals that could be the basis for upcoming legislative debates. With such large unmet health needs in the South, other states should follow their lead.