An Aug. 10 Urban Institute report says uninsured nonelderly adults who could receive coverage under the health reform law’s Medicaid expansion starting in 2014 are much less likely than those now eligible for Medicaid to be parents living with dependent children. But this type of demographic change does not faze health insurers as they prepare for the new market participants, an executive of a trade group that includes not-for-profit insurers serving Medicaid tells HRW.

“The expansion will mean that plans will have a slightly different mix of members. The report is largely in line with what plans have expected: The expansion population is likely to be a little bit older, and there will be more adult males,” says Meg Murray, CEO of the Association for Community Affiliated Plans (ACAP).

“So, our plans are preparing for this change in several ways,” she continues. “The simple growth in numbers means that plans will need to expand their provider networks to assure that all of their members can see a doctor in a timely fashion. With the shift in demographics, some plans may also need to adjust the makeup of the specialists in their network. For instance, a plan might need to recruit more dermatologists in order to meet the needs of a slightly older population.”

In the Urban Institute study, which was funded by the Robert Wood Johnson Foundation, the report authors detail the percentage variances between the newly eligible and those eligible for Medicaid now. “The most striking difference is that those newly eligible are considerably less likely to be parents living with dependent children [18% compared with 52%],” the report says (see table, p. 4). “Eighty-two percent, or 12.4 million, of the newly eligible uninsured adults are not living with dependent children.” Newly eligible uninsured adults are also more likely than now-eligible uninsured adults to be men, white and U.S. citizens, the report says.

Changed Demographics Make Disease Care Vital

The newly eligible, childless adults under age 35, and with annual incomes up to 138% of the federal poverty level (FPL), are extremely important to the overall health care system, since taking care of illnesses and diseases at a younger age could cut future costs under Medicare when these prospective new recipients are older.

The Urban Institute report seeks to fill what its authors say is a gap in knowledge about the makeup of this potential new class of insured Americans. The numbers of newly covered, however, will be dramatically lower than originally thought, given the June 28 Supreme Court decision allowing states to decide whether to opt in on Medicaid expansion (HRW 7/2/12, p. 1).

A July 24 Congressional Budget Office (CBO) report projects that 30 million previously uninsured Americans will gain coverage by 2022. This is 3 million fewer than had been predicted before the court’s decision.

Jenna Stento, a manager in health care consultancy Avalere Health’s health reform practice, tells HRW that this group of previously uninsured (with incomes up to 138% of FPL) are the people who “have never been covered before” and if left uncovered will resort to being part of the uncompensated-care category who use emergency rooms for their health care needs. “They will have no source of insurance coverage” if states opt out of expanding Medicaid under the reform law, she says. “There will be a small break for people making 100% to 133% [of FPL] with the exchanges, but the rest of them are out of luck,” Stento adds.

View the Urban Institute report at www.urban.org/publications/412630.html.

© 2012 by Atlantic Information Services, Inc. All Rights Reserved.

Join us for “Medicaid Expansion, Dual Eligibles and Basic Health Plans: New Populations, New Programs, New Opportunities,” one of seven Health Business Roundtables on compelling bottom-line issues for health business leaders taking place during New Health Insurance Business Models for a Post-Reform World, a two-day conference in Washington, D.C., on Oct. 4-5. Visit www.AISHealth.com/roundtable/october2012 to review the Full Program and register today!