Academic journal article Health Care Financing Review

Covering Uninsured Adults through Medicaid: Lessons from the Oregon Health Plan

Academic journal article Health Care Financing Review

Covering Uninsured Adults through Medicaid: Lessons from the Oregon Health Plan

Article excerpt

INTRODUCTION

The size of the uninsured U.S. population has been a persistent concern, even during recent years of strong economic growth and low unemployment. Expanding Medicaid eligibility has been adopted as one approach to reducing the ranks of the uninsured, particularly among children and pregnant women. A few States have adopted a broader Medicaid strategy, using it to cover low-income populations generally. Among these is Oregon's section 1115 Medicaid waiver program, OHP, which expands Medicaid eligibility to include all residents with incomes below 100 percent of the Federal poverty level (FPL). Other important innovations adopted as part of OHP include the use of a prioritized list of medical conditions and treatments to define the benefit package and mandatory enrollment in managed care for nearly all eligibles.

The OHP expansion population includes adults age 19 or over and is divided into two groups: adults with children and childless adults.(1) Prior to Oregon's implementation in July 1998 of the State Children's Health Insurance Program (SCHIP), which covers all children under age 19, up to 170 percent of the FPL, the adults with children category also included children born before October 1, 1983.(2) Although the two categories of expansion beneficiaries are subject to the same eligibility standards and receive the same benefits, OHP distinguished the two groups because it was assumed that their utilization would differ substantially. Adults with children were thought to closely resemble traditional Aid to Families with Dependent Children (now Temporary Assistance for Needy Families [TANF]) eligibles, whereas, childless adults initially were expected to resemble a commercially insured population. However, after the program was implemented, it became evident that childless adults were far sicker and more costly than anticipated.

The expansion program has been extremely successful at enrolling uninsured Oregonians in Medicaid. It is estimated that the program enrolled 64 percent of the potentially eligible population in 1996 (Lipson and Schrodel, 1996). Over the first 5 years of OHP operation, the eligibility expansion extended Medicaid coverage to nearly 428,000 individuals. The vast majority (over 80 percent) were adults. The expansion population grew far more rapidly than anticipated, peaking during the program's second year at more than 134,000 eligibles. However, it subsequently declined to just over 81,000 by January 1999, the end of the fifth year (Figure 1).(3) The decrease in the number of eligibles occurred among both adults with children and childless adults. However, as shown in Figure 1, the decline between July 1997 and July 1998 was far more precipitous for the adults with children category. This is partly explained by the movement of children out of this category following the implementation of Oregon's SCHIP program. A variety of other explanations have been advanced to explain the declining size of the expansion population, including the imposition of a premium requirement (Haber, Mitchell, and McNeill, 2000), a robust economy, and several changes in eligibility requirements.(4)

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The expansion population quickly became a very significant portion of Oregon's Medicaid program. In mid-1995, expansion eligibles comprised 40 percent of the Phase 1 population(5) and 33 percent of the total Medicaid population. Despite the reduction in the number of expansion eligibles, they still accounted for 32 percent of Phase 1 eligibles and 24 percent of all Medicaid eligibles in January 1999.

This article describes Oregon's experience with its eligibility expansion, including sociodemographic and other characteristics of the expansion population, its service use, and the continuity of coverage provided. In addition to profiling the expansion population generally, we contrast experience for adults with children and childless adults. …

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