Loss of Medicaid supplemental coverage disproportionately harms Black, Hispanic patients: study

People who lose their supplemental Medicaid coverage as their income rises experience greater barriers to getting care due in part to higher out-of-pocket costs, according to a study published in JAMA Internal Medicine.

Medicaid is a key coverage supplement to Medicare, and people may lose eligibility once their income exceeds the threshold of 100% of the federal poverty level (FPL).

In addition, being disqualified from dual eligibility worsens racial and ethnic disparities in healthcare because Black and Hispanic enrollees will be more affected than white Medicaid members. According to the study, exceeding the Medicaid eligibility threshold meant a 43.8 percentage point lower probability of Medicaid enrollment among Black and Hispanic Medicare beneficiaries, compared to a 31 percentage point lower probability of Medicaid enrollment among White Medicare beneficiaries.

Researchers found that exceeding the threshold came with lower use of outpatient services, and filling prescriptions for Black and Hispanic patients compared to white patients.

“Discontinuities in these outcomes were smaller or nonsignificant among White beneficiaries,” the study said.

Corresponding author Eric T. Roberts, Ph.D., of the Department of Health Policy and Management at the University of Pittsburgh School of Public Health, told Fierce Healthcare in an email that the study illustrates that losing Medicaid coverage because of redetermination might present significant barriers to obtaining healthcare coverage.

“Black and Hispanic older adults with low incomes may be less able to pay for health care costs when they don’t have Medicaid (e.g., they may have fewer savings to offset a loss of Medicaid),” said Roberts. “Thus, there is a need to minimize potential Medicaid coverage disruptions among older adults.”

In the study, one silver lining is that exceeding the threshold was not associated with a statistically significant discontinuity in hospitalizations, and two factors may account for that.

“First, any increase in adverse health events would likely be concentrated among hospitalizations that are most sensitive to underuse of medications and outpatient care (eg, admissions for ambulatory care-sensitive conditions)," the researchers wrote. "However, these hospitalizations are relatively rare, and our sample might not have been large enough to detect a difference in these events.”

Also, it may take time for the underuse of care to have measurable effects on hospital utilization, the study found.

Eric T. Roberts, Ph.D.
Eric T. Roberts, Ph.D. (University of Pittsburgh)

The cross-sectional study used a regression discontinuity design to measure the differences. Researchers analyzed data of Medicare beneficiaries with incomes of 0% to 200% of FPL from 2008 to 2018. They compared discontinuities in outcomes among 2,885 Black and Hispanic beneficiaries to 5,259 white beneficiaries. The data were examined between Jan. 1, 2022, and Oct. 1, 2022, by researchers from various institutions, including Pitt, Harvard Medical School and the University of Michigan Medical School.

Though the data were collected before the COVID-19 pandemic, the study results come as states cut back on the number of people eligible for Medicaid—a number that had been expanded under the public health emergency caused by the COVID-19 pandemic. The health emergency is due to end on May 11.

“Those redeterminations are now resuming, and they will affect older adults for whom Medicaid supplements Medicare,” Roberts said.

Redeterminations may disqualify someone for Medicaid if the individual’s financial circumstances have changed, if the enrollee does not complete recertification in time or if there’s some sort of clerical error.

“This is of particular concern in older adults for whom Medicare is their primary insurer and Medicaid is a supplemental insurer because Medicaid coverage for this older adult population is complex and difficult to navigate,” Roberts said.

Because individuals who lose their dual eligible status will be less likely to seek care, that will result in physicians having to deal with more advanced stages of disease when patients finally do get care, Richard Stefanacci, of Jefferson College of Population Health at Thomas Jefferson University, told Fierce Healthcare in an email.

Payers will also see increased costs, he said.

The study said that “although the cliff in Medicaid enrollment (ie, proportions of beneficiaries with Medicaid above vs below the federal poverty level) differed by racial and ethnic group, instrumental variable analyses revealed larger reductions in use of care associated with not having Medicaid among Black and Hispanic vs white beneficiaries, adjusting for the cliff in Medicaid enrollment in each group. These findings suggest that low-income Black and Hispanic beneficiaries encounter greater difficulty obtaining care when they do not have Medicaid supplemental insurance to cover Medicare’s cost sharing.”

Black and Hispanic Medicare beneficiaries experience more chronic diseases than white beneficiaries, the study said. They include diabetes, hypertension, and heart disease, all of which can be managed effectively through medication and outpatient care.

They suggest redesigning eligibility, tying Medicaid supplemental coverage to 200% of the FPL while gradually tapering Medicaid cost-sharing assistance to between 100% and 200% of FPL to avoid a coverage cliff.

“These recommendations remain salient following the passage of the Inflation Reduction Act, which includes several provisions to lower out-of-pocket drug costs in Medicare,” the study said.

One provision increases eligibility for the maximum Part D low-income subsidy to 150% FPL. Currently, individuals with more than 135% and less than 159% of FPL qualify for partial subsidies.

The authors noted, however, that relatively few individuals have taken advantage of the low-income subsidy.