Demand for Medicaid is downward sloping

In a wonky, literature-referencing post on Vox, Adrianna reports on the consequences of even small Medicaid premiums.

Researchers [in the Journal of Health Economics] looked at enrollment trends in Wisconsin, which introduced monthly premiums for Medicaid beneficiaries living above 150 percent of the federal poverty line. The premiums started at $10 per month and increased with income.

The study found that the premium requirement itself — not the size of the required monthly payment — is what discourages enrollment. Introducing a $10 premium makes enrollees 12 to 15 percentage points more likely to exit the program. Though premiums got more expensive as enrollee income increased, these changes had little or no effect on enrollment.

This matters because a handful of states pursuing alternative Medicaid expansions have proposed premiums for enrollees between 100 and 138 percent of the federal poverty line. This Medicaid expansion population is poorer than the enrollees studied in Wisconsin, meaning they could be even more sensitive to required monthly payments.

So far, four states have requested to impose premiums on some of their Medicaid expansion populations who have incomes above the poverty line and two — Iowa and Michigan — have already received permission to do so. […]

Indiana and Pennsylvania are still in negotiations with the Department of Health and Human Services to expand Medicaid. Under its proposed expansion plan, Pennsylvania wants to charge premiums of $13 per month for single adults and $17 per month for families. Under Governor Pence’s “Healthy Indiana” plan, Hoosiers between 100 and 138 percent of the federal poverty line will be required to make monthly contribution of $3 to $25, depending on income.

Adrianna, with whom I caught up by email, said, “I attest that the paper is worth reading in full.”


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