Association for Public Policy Analysis & Management

Panel: Access to Health Care Among Low Income Populations: The Role of Financial Responsibility and Financial Literacy

(Health Policy)

Low income populations often have poor access to care, and cost is a key reason many report having to delay or forgo needed care. To improve coverage among low income consumers, the Patient Protection and Affordable Care Act (ACA) adopted the following strategies: expanding eligibility for the Medicaid program, providing both premium subsidies and cost-sharing reductions for health plans offered through Health Insurance Marketplaces, and authorizing provision of Transitional Medical Assistance (TMA) to ensure extended coverage to transition beneficiaries from ‘welfare to work.’ In the context of these approaches, policy makers face a common challenge of understanding the role of cost sharing as a tool to curb moral hazard and whether financial responsibilities could negatively alter health care seeking decisions. The findings from papers presented in this panel will contribute to an understanding of widely implemented policy tools that directly affect access and utilization of care among the low income populations. Additionally, results are relevant to policy efforts under the ACA as states experiment with coverage models to determine optimal levels of subsidies that could address budgetary concerns without negatively impacting the poor. The panel includes four papers that determine the impact of various policy tools, specifically cost sharing responsibilities and subsidies on health care decisions among low income populations. The first paper uses Medicaid Analytic eXtract (MAX) files for 2003, 2008 and 2010 across 46 states to examine how state-level cost-sharing policies influence breast and cervical cancer screening among Medicaid enrollees prior to implementation of the ACA. In the second paper, using administrative data from 2000-2011 of a coverage program for a previously uninsured childless low income adult population, authors determine how newly covered enrollees respond to health coverage under managed care principles and the extent to which cost sharing responsibilities determine utilization of emergency departments, outpatient and inpatient services. As states consider modified programs for Medicaid, evidence from both these studies will be relevant to inform cost-sharing policies and their impact on health seeking behaviors. In the third paper, authors examine administrative data on over 19 million health insurance plan choices of individuals who purchased their plans in either 2014 or 2015 through the Federal Marketplace. The authors assess whether consumers are aware of the value of cost-sharing subsidies and provide elasticity and crowd-out estimates. The evidence is critical to inform ACA Marketplaces on financial literacy of their consumers and identify areas to improve plan selection by enrollees, which is important to maintain sufficient enrollment and make improvements in rates of insurance coverage. The final paper addresses the TMA program by taking advantage of a new program in Wisconsin. It will provide an in-depth description of how enrollees use TMA benefits and determine the extent to which enrollees are responsive to changes in the marginal cost of transitioning back to work. This will provide important evidence on the interaction of health insurance safety net and labor market and inform policies designed to transition Medicaid beneficiaries from ‘welfare to work’.