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Survey responses from newly eligible Medicaid members in Virginia showed that financial stress over medical bills and household expenses decreased following enrollment (Getty Images).

Medicaid beneficiaries report less financial stress following enrollment, VCU study finds

The study is the first in the U.S. to analyze the changes in subjective financial distress for a population of new Medicaid enrollees before and after enrollment.

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Following their enrollment in Virginia’s expanded Medicaid program, low-income individuals reported less worries about household finances and medical bills one year after enrollment compared to the year prior to enrollment, according to new research led by scientists from the Virginia Commonwealth University School of Medicine.

The study, published in the journal Health Affairs, is the first in the U.S. to analyze the changes in subjective financial distress for a population of newly eligible Medicaid enrollees before and after enrollment. 

“Since Virginia’s expansion of Medicaid in 2019, health insurance coverage has been extended to more than 500,000 adults,” said Hannah Shadowen, an M.D.-Ph.D. student within the VCU School of Medicine’s Department of Health Behavior and Policy and lead author of the new study. “Through this research, we are getting a closer look into how Medicaid expansion could be creating positive financial changes and improving equity for low-income families.”

The study is part of a larger five-year Medicaid expansion evaluation that VCU is leading on behalf of the Virginia Department of Medical Assistance Services. The evaluation is being led by Peter Cunningham, Ph.D., a professor in VCU School of Medicine’s Department of Health Behavior and Policy, and Andrew Barnes, Ph.D., also a professor in the Department of Health Behavior and Policy.

The research team conducted a baseline survey of individuals newly eligible for Medicaid to understand their health care experience and financial situation in the year prior to enrolling. Follow-up surveys were then sent more than 18 months after enrollment. The team collected over 3,000 responses in total. 

Using data from the surveys, the researchers examined how financial concerns about medical and nonmedical needs changed for beneficiaries one year after enrollment. This included worries related to paying for housing, food, monthly bills, credit card and loan payments and health care.

“Most studies that look into the financial implications of Medicaid expansion concentrate on health care affordability or catastrophic financial events like bankruptcy. In this research, we wanted to see whether enrolling in the program also impacts a person’s ability to pay household expenses like housing and food,” said Barnes, a co-author of the study.

The research team’s analysis showed that, after 12 months of Medicaid enrollment, enrollees were 33.7% less likely to be concerned about normal health care costs and 23.8% less likely to be concerned about catastrophic health care costs compared with the year before. The enrolled respondents also reported having less trouble paying medical bills and paying off medical debt over time.

Additionally, researchers found that enrolled individuals showed reduced concerns about general expenses not associated with health care. These findings were consistent with previous studies that have shown the positive impacts of Medicaid expansion on nonmedical costs.

The reported changes in financial need following Medicaid enrollment were broadly similar across demographic subgroups, including sex, rurality, and race and ethnicity. 

“Medicaid is a critical antipoverty program, but it is important to understand if the positive outcomes of the program are extended to all different types of Medicaid members,” Shadowen said. “It’s very encouraging to see that low-income families from different backgrounds were all experiencing similar positive effects from Medicaid enrollment. In fact, when we did see a few differences in outcomes, individuals from groups historically marginalized experienced even greater positive outcomes after enrollment. This is an encouraging sign that publicly funded coverage can actually encourage health equity.”

Because the follow-up surveys, conducted from August 2020 to May 2021, coincided with the COVID-19 pandemic, the results also added insights on the impact of public health insurance in a time of economic and public health crisis.

“For many low-income families in the U.S., Medicaid is an important social safety net. The COVID-19 pandemic has reinforced this role as millions of Americans lost their jobs and employer-based health insurance coverage,” Barnes said. “Our findings offer evidence for the potentially critical role of Medicaid expansion during times of public health crisis and economic hardships.”