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.
