Expanding Coverage to Low-Income Childless Adults in Massachusetts: Implications for National Health Reform

In April 2006, Massachusetts enacted an ambitious health care reform bill that resulted in significant gains in insurance coverage, access to and use of care, and the affordability of care for the Massachusetts population as a whole and, especially, for lower income adults (e.g., Clark et al. 2011; Long 2008; Long and Stockley 2010; Tinsley et al. 2010; Zhu et al. 2010). Given the success of health reform in Massachusetts, many of the key features of the Bay State's initiative were incorporated in national health reform under the 2010 Patient Protection and Affordable Care Act (ACA), including expansions of public coverage, subsidies for private coverage, a health insurance exchange, insurance market reforms, requirements for employers, and an individual mandate. While there are differences in the details of Massachusetts law and the ACA, the core structure is quite similar (Levy /20132012). Thus, the experiences in Massachusetts provide an estimate of the potential gains under the ACA, including the expansion of Medicaid eligibility. Consistent with the link between Massachusetts reforms and the ACA design, estimates of the impacts of the Massachusetts reforms on insurance of coverage have been used to inform the assumptions on individual behavior that underlie many of the microsimulation models used to estimate the potential gains under the ACA at the national and state levels (e.g., models by the Congressional Budget Office, the Urban Institute, and Jonathan Gruber).1 Under the ACA, states have the option of expanding Medicaid eligibility to nearly all adults with family income up to 138 percent of the federal poverty level (FPL)2 in 2014.3 As of January 2014, 25 states and the District of Columbia had committed to the ACA Medicaid expansion (Kaiser Family Foundation 2014). This opportunity for state Medicaid expansions represents a significant change to national Medicaid policy, particularly for childless adults—that is, adults without dependent children who are not aged, disabled, or pregnant. Prior to the ACA, low-income childless adults, unlike other low-income adults, were only eligible for Medicaid coverage as a state option, and only a handful of states made Medicaid or Medicaid-like coverage available to low-income childless adults. Massachusetts is one of those states, having added fully subsidized coverage for low-income childless adults under the Commonwealth Care program, a Medicaid-like program, as part of its 2006 reform initiative. Key differences between Commonwealth Care and MassHealth, the Medicaid program in Massachusetts, include a more limited set of benefits, co-payments for some services, and, for those with incomes above 150 percent of the FPL, premiums. Under the 2006 reform, Massachusetts provided fully subsidized coverage under the Commonwealth Care program to adults up to 100 percent of the FPL as of October 2006, with the full subsidy expanded to include adults up to 150 percent of the FPL as of 2007. Partially subsidized coverage was provided to adults between 150 percent and 300 percent of the FPL as of July 2007. Prior to that, parents were eligible for Medicaid coverage up to 133 percent of the FPL, while childless adults were not eligible for Medicaid coverage unless they were aged, disabled, or pregnant. Consequently, we would expect the effects of the expansion of public coverage to low-income adults in Massachusetts to have a stronger impact on childless adults than parents. We would also expect a stronger effect for the lower income adults who were eligible for fully subsidized coverage. Estimating the impacts of Massachusetts health reform initiative on the childless adults in the ACA's Medicaid target population is challenging: Sample sizes for states in national surveys tend to be relatively small—for example, less than 3,000 in the Current Population Survey, less than 2,000 in the NHIS, and less than 500 in the Medical Expenditure Panel Survey (State Health Access Data Assistance Center 2011), making it difficult to focus on narrow population groups, while state-specific surveys, which may offer a larger state sample size, cannot support the stronger designs needed to disentangle the effects of health reform from other factors. In an attempt to address both of these limitations, this article combines data from two surveys—the Massachusetts Health Reform Survey (MHRS) and the National Health Interview Survey (NHIS)—to examine the impacts of the Massachusetts reforms for the low-income childless adults and parents who are targeted by the ACA Medicaid expansion. The MHRS provides a relatively large sample of low-income adults in Massachusetts, while the NHIS provides data for low-income adults in other states to support a stronger difference-in-differences evaluation design (Wooldridge 2002) than is possible with data on a single state. Although we are not aware of other efforts to combine state-specific surveys with the NHIS, the NHIS has been combined with other national surveys to expand the analyses that are possible (e.g., Schenker et al. 2002; Bostean 2013). Combining data from state-specific surveys like the MHRS with the NHIS is a promising strategy for state health reform evaluation efforts for those states that regularly conduct population surveys on health insurance coverage and health care access and use.4 Findings here for Massachusetts provide insights into the potential effects of the Medicaid expansion and other ACA changes for the key target population of low-income childless adults in other states, including the potential effects in states that have not expanded Medicaid under the ACA. These estimates, which are based on the ACA target population rather than the Massachusetts target population used in prior work, more closely reflect the potential impacts of the ACA for other states based on the Massachusetts experience. To the extent that microsimulation models currently rely on findings from Massachusetts for higher income groups in constructing assumptions on individual behaviors under the ACA, these estimates offer the possibility of more refined estimates that more closely target the Medicaid expansion population under the ACA.