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Texas is one of just 10 states that did not expand Medicaid under the Affordable Care Act—but what do we know about the impact?

New study finds the ACA facilitated a shift in hospital payer mix from uninsured to insured in Texas
Diverse group of people waiting in hospital reception lobby to attend medical appointment with general practitioner. Patients in waiting room lobby sitting at healthcare clinic. Hospital queue

The federal Affordable Care Act (ACA) was enacted in March 2010 to make affordable health insurance available to more people, to support innovative medical care delivery methods and to expand Medicaid to cover all adults below a certain income threshold.

To date, however, 10 states, including Texas, have not adopted the Medicaid expansion to increase insurance coverage. The result is that regardless of their income, Texans younger than 65 who aren’t disabled or a child are ineligible for Medicaid.

Although disparities in health insurance uptake have been documented, little is known about disparities in hospital payor mix in non-expansion states, and specifically Texas.

To learn more, Benjamin Ukert, PhD, an assistant professor of health policy and management in the School of Public Health at Texas A&M University, and a colleague from Penn State Beaver analyzed the impact of the ACA health insurance exchanges (marketplace) on the rate of uninsured hospital discharges in Texas.

“Texas is an important state for this study given that it is the second-most-populous state and also has the nation’s highest percentage of uninsured residents,” Ukert said.

In addition, Texas is home to more than 7 percent of all marketplace enrollees nationwide. Ukert said that most studies to date have focused on determining the effect of the Medicaid expansion on uninsured discharges, but the expansion of the individual marketplace is equally large and important and has received much less attention by researchers. Texas also is diverse in terms of geography, race and ethnicity, with many rural communities and rural hospitals that treat a high percentage of uninsured patients.

For their research, the pair conducted a retrospective study using difference-in-difference regressions to estimate the effects of the ACA Marketplace on Texas hospital discharge data for non-elderly adults at acute care hospitals that reported data from 2011 to 2019. The main outcome was the uninsured discharge rate. They stratified the sample by patient’s race, age, gender, urbanicity, major diagnostic categories and emergent type of admissions.

The study found that expansion of insurance through ACA marketplaces led to reductions in the uninsured discharge rate by 9.9 percent (95 percent confidence interval, -17.5 percent, -2.3 percent) relative to the baseline mean hospital uninsurance rate prior to the ACA. The ACA did not increase the demand for hospital care, however, as the number of hospitalizations remained constant.

“Our findings indicate that the ACA facilitated a shift in hospital payer mix from uninsured to insured,” Ukert said. “Its effects were strongest in counties that had four characteristics: below average county level share of Hispanic populations, a larger population of Black and other racial groups, a significant share of female and older individuals, and urban areas that have high-volume diagnoses and emergent type of admissions.”

“Our findings are consistent with previous studies that showed that Hispanics and those aged 50-64 in Texas made significant gains in insurance coverage after 2013,” Ukert said. “They also align with a finding that the rate of uninsured hospital discharges decreased strongly for urban counties.”

In addition, the study found that decreases in uninsured discharges were equally distributed in the top four conditions that accounted for 40 percent of all discharges (related to pregnancy, circulatory, respiratory and digestive system)—with some of these conditions, especially circulatory care, known to be associated with high insurance payments.

In terms of the ACA’s impact on the uninsured discharge rate, the study’s findings for the marketplace alone are smaller in magnitude (about 10 percent) compared to studies that found that the ACA Medicaid expansion resulted in uninsured discharge reductions between 30 percent and 72 percent.

“This finding could be because the uninsurance rate in Texas remained relatively high even after the implementation of the marketplace, which led to only a marginal reduction in the uninsured discharge rate,” Ukert said.

Ukert added that changes in hospital care are driven by people who either are employed or who live in households with moderate incomes, and this population is generally healthier than those who qualify for Medicaid.

“In short, we found that the effect of the Texas marketplace is smaller than those reported in Medicaid expansion studies, but this comparison is limited so far by the relatively few studies that have examined the impact on uninsured discharges,” Ukert said.

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