Young and Healthy People Tend To Not Stay On Medicaid

Young and healthy people appear to leave Medicaid once they have obtained employment or additional hours at work, according to a new analysis from Avalere Health.

The report, funded by the research arm of insurance giant Anthem, comes as the CMS is starting to allow states to make employment, or the search for it, a requirement of Medicaid coverage.

Individuals aged 19 to 29 made up 31% of Medicaid enrollees that joined the program in the first half of 2014, while enrollees aged 50 to 64 accounted for 28% of member months.

But after 2½ years of enrollment, beneficiaries ages 19 to 29 made up just 24% of member months, while enrollees ages 50 to 64 made up about 33%.

Avalere theorizes the exits could be the result of enrollees gaining access to employer-sponsored insurance or an enrollee’s income could increase, making them ineligible for Medicaid and instead eligible for premium tax credits.

Despite the exodus, the report found that average monthly costs for Medicaid expansion enrollees rose roughly 20% from $324 in 2014 to $389 after 2½ years of being enrolled.

Avalere attributes the increase to chronic care needs of those Medicaid expansion enrollees who stay in the program and the rising cost of care.

Inpatient claims for expansion enrollees initially accounted for the largest share of claims costs

After eight months of enrollment, prescription drug costs surpassed inpatient costs, growing to just under 30% of total claims costs by 30 months.

This switch may have occurred because enrollees may have received more outpatient and chronic care management as they established relationships with healthcare providers, thus increasing medication use but reducing complications requiring an ER visit or inpatient admission, according to Avalere.

“As new Medicaid beneficiaries gain a consistent and sustained source of insurance coverage, their spending patterns reflect improved care for chronic conditions and less need for acute hospitalizations,” Michael Lutz, vice president at Avalere said in a statement. “This suggests that newly insured populations have underlying health needs but insurance coverage may help rationalize their healthcare spending in favor of longer-term, less costly treatments overall.”

Avalere based its findings on claims data from three Medicaid managed-care organizations serving members in plans across multiple states that expanded eligibility for Medicaid in January 2014.

Over 11 million people have gained coverage since Medicaid expansion, however there is relatively little information available about the utilization trends for these newly covered low-income, childless adults.

Avalere conducted its analysis to understand how enrollment, utilization and cost patterns for newly eligible enrollees have changed over time and whether spending patterns differed for earlier versus later expansion enrollees.

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