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U of M researchers find new health reform efforts could lead to a substantial increase in Medicaid participation

A new University of Minnesota analysis shows that the Affordable Care Act is likely to lead to a substantial increase in Medicaid participation among people who are currently eligible for Medicaid but not enrolled.

One impact of such enrollment – termed the “welcome-mat” effect – will be higher Medicaid spending and increased caseloads, even in states that do not expand their Medicaid programs as called for by the Affordable Care Act.

The new analysis, titled “Medicaid ‘Welcome-Mat’ Effect of Affordable Care Act Implementation Could Be Substantial in Some States” was led by Julie Sonier, M.P.A., a senior research fellow in the University of Minnesota’s School of Public Health and deputy director of the State Health Access Data Assistance Center (SHADAC) at the University of Minnesota.   It was published on June 26 as a web first article by the journal Health Affairs, and will also appear in the journal’s July issue.

“Within the context of ACA reform efforts some type of Medicaid welcome-mat effect is widely anticipated, but to date there’s been limited research evidence to help estimate its size,” said Sonier. “And although there will be increased costs for states, it’s important to remember that states also incur costs today when uninsured people defer medical services until they have a potentially preventable and even costly health event that then pushes them to enroll in Medicaid.”

Using health reforms that were enacted in Massachusetts in 2006 as a case study, and controlling for other factors, the latest U of M analysis found that among low-income parents who were previously eligible for Medicaid, Medicaid participation increased by 19.4 percentage points in comparison to a group of control states.

Massachusetts was used as a case study because it is the only state that has implemented reforms of a scale and scope similar to those of the Affordable Care Act.

“The size of the welcome-mat effect is likely to vary across states, but there is potential that the effect could be even larger in some states than what we saw in Massachusetts,” said Sonier. “Our study provides new evidence to help states estimate the potential size of this impact as health reform is implemented.”

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