Blacks gain most from health care act when Medicaid is expanded

Freddie Allen | 1/9/2015, 9:49 a.m.
As families prepare to choose health insurance coverage during the open enrollment period, a recent report by the Urban Institute ...
Renee Walker, from Orlando, and other demonstrators express their support for Medicaid Expansion during a rally in the Capitol Courtyard in Tallahassee, Florida, March 3, 2014 – one day before lawmakers met to address concerns about health care and other issues. Phil Sears

WASHINGTON – As families prepare to choose health insurance coverage during the open enrollment period, a recent report by the Urban Institute shows that Blacks have the most to gain from the Patient Protection and Affordable Care Act if the states they live in expand Medicaid under the law.

The Urban Institute, a nonprofit research group focused on social and economic policy, estimated that Blacks will experience, “the largest decreases in uninsurance rates under full Medicaid expansion: a drop from 11.3 percent (projected with current expansion decisions) to 7.2 percent” and the uninsurance rate gap between Blacks and Whites will fall from 6.5 percent under current Medicaid expansion to 2.6 percent with full expansion.

However, the gap between Black and White uninsurance rates will remain closer to 7 percent, at least for the near future, because most Blacks live in states that have refused to expand Medicaid under the ACA.

The original law, passed in 2010, mandated Medicaid expansion nationwide, but the United States Supreme Court 2012 decision in the National Federation of Independent Business v. Sebelius case reversed that provision, leaving it to the states to decide whether they want to take additional Medicaid funding under the ACA.

According to the Urban Institute, “As of December 2014, 27 states and the District of Columbia had expanded Medicaid or planned to expand by January 2015.”

The Urban Institute projected that Blacks would comprise 12.8 percent of all coverage gains under current Medicaid expansion policies and 2.9 million Blacks would get health insurance. The uninsurance rate for Blacks would fall from 19.6 percent to 11.3 percent.

More than half of all Blacks live in states, primarily in the South and led by Republican governors, that didn’t expand Medicaid after the ACA was passed in 2010.

When states refused to expand Medicaid, the move trapped Blacks in a “coverage gap,” because many of them don’t meet the income-based requirements to qualify for Medicaid under their own state rules or to receive subsidies through the ACA marketplace.

About 1.4 million Blacks fall into this category, accounting for more than 23 percent of the uninsured non-elderly adult Blacks. For example, in Florida, Georgia, Texas and North Carolina, the uninsured rates for Blacks would plummet roughly 30 percent compared to current rates, if those states expanded Medicaid coverage under the ACA.

“For blacks, however, the difference between their uninsurance rates and whites’ rates is projected to narrow under the ACA with current Medicaid expansion decisions only in Medicaid expansion states,” the report said. “Across all states, the difference in uninsurance rates between blacks and whites is projected to stay approximately the same both under the ACA with current Medicaid expansion decisions and without the ACA.”

In August 2014, researchers with the Urban Institute said that 6.7 million residents would still remain uninsured in 2016 in the states that continued to block Medicaid expansion through the ACA.

“These states are foregoing $423.6 billion in federal Medicaid funds from 2013 to 2022, which will lessen economic activity and job growth,” the August 2014 report said. “Hospitals in these 24 states are also slated to lose a $167.8 billion (31 percent) boost in Medicaid funding that was originally intended to offset major cuts to their Medicare and Medicaid reimbursement.”