A key finding was that enrollment and costs proved difficult to predict, with the initial estimates “often diverging significantly from the actual outcome,” according to the study. For instance, Connecticut ended up with 84,000 new Medicaid beneficiaries in the first year of expansion, nearly twice as many as expected. The resulting budget pressure on the state led legislators to consider cutting back the expansion, though those plans were vetoed by the CMS.
In Washington, D.C., many of the people eligible for expanded Medicaid previously were in a public insurance program called DC Healthcare Alliance. Once the District began transferring beneficiaries from that program into Medicaid, it realized it hadn't accurately estimated the costs of prescription drugs for enrollees who were HIV positive. Under the Healthcare Alliance, these drugs cost less because they were purchased at the Defense Department's discounted rates. When these patients shifted to Medicaid, the price of the drugs increased to standard Medicaid rates.
“It led to some unexpected budget pressures,” said Linda Elam, Medicaid director at the District of Columbia's Department of Health Care Finance. As a result, the District had to carve out HIV drugs from its Medicaid program and offer that benefit separately to make the drugs more affordable.
In light of these experiences, states that are expanding their Medicaid program starting in January should be cautious in relying on early enrollment and cost projections, the report said. In the end, states should be prepared for a range of potential outcomes.
Another finding was that new Medicaid enrollees had greater-than-expected use of behavioral health services, including substance abuse treatment. That could mean major improvements in mental healthcare for a population that has traditionally had difficulty obtaining needed services, according to the study. Another implication is that states likely will need to improve the availability and quality of mental health services, requiring both additional provider capacity and better care coordination for patients with complex behavioral health needs.
To better coordinate care for this population, Minnesota launched Hennepin Health, an accountable care organization that will serve up to 10,000 low-income adults in 2013. The organization brings together physical, mental and dental health providers along with social support services, including transportation and housing. That's a better arrangement for people suffering from mental illness, said Scott Leitz, an assistant commissioner at the Minnesota Department of Human Services.
“It integrates mental and chemical health with physical health,” he said. “It's a tight network of county-run facilities, and the upfront capitation payment to the county allows them to be flexible in investing in services upstream to hopefully keep folks from using services downstream.”
MaryAnne Lindeblad, Washington state's Medicaid director, said Minnesota's approach in serving beneficiaries with mental health and substance abuse issues hopefully will be adopted by other states. “I can give you lots of examples about how fragmented delivery systems make it more difficult to reach the people who need care the most,” she said.