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A look at law's effects on cities

Think tank finds Pa. Medicaid expansion could cut Phila.'s uninsured by half.

The number of uninsured Philadelphians could be sliced in half if Pennsylvania expands Medicaid, according to research from the nonprofit Urban Institute.

In its study of the health law's effects on American cities, the Washington, D.C.-based think tank reported that Philadelphia's uninsured rate fell from 16 percent to 12 percent after the Affordable Care Act began. But that number would drop to single digits if the state expanded traditional Medicaid.

"If Medicaid costs people about what it does now, then the uninsured rate in Philadelphia would fall to about 7 percent," said study coauthor Matt Buettgens, an Urban Institute analyst.

But the state remains stuck in limbo waiting for the Department of Health and Human Services to act on a waiver for its controversial Healthy Pennsylvania plan.

Unlike other Medicaid programs, the Pennsylvania plan would give federal subsidies to an estimated 500,000 eligible low-income residents who are uninsured to buy private insurance over the state's federally run exchange.

For the first time, Medicaid recipients would have to pay "substantial premiums and cost sharing, and that obviously is going to drive down" enrollment, Buettgens said.

Pennsylvania and the 23 other states that haven't expanded Medicaid have signed up fewer than three million people for the program. That's in sharp contrast to the almost 10 million people enrolled by the 26 states and District of Columbia that expanded Medicaid when the marketplace opened November.

Using federal statistics, the Institute did another study and found that the 10 million people now on Medicaid represent about half of the total number projected to be in the program in 2016 when enrollment is expected to stabilize.

"We should be over halfway [to the projected total] by the end of 2014," said Buettgens. "That is very good for something that includes such a large new expansion of Medicaid."

The institute's study is the first look at the accuracy of Medicaid coverage estimates and gives a snapshot of how expansion versus non-expansion states are faring, Buettgens said.

In fact, the actual number of people on Medicaid may turn out to be higher because many states are struggling to process a backlog of applications, Buettgens said. Once that backlog is cleared, the total number of people covered could reach 66 percent.

The backlog may be larger in states that didn't expand Medicaid, he said.

Buettgens theorizes that most of the new recipients in non-expansion states signed up for plans on the marketplace because of the individual mandate. Once in the system, they were screened and found to be Medicaid eligible. Parents could also enroll their children in Medicaid's Children's Health Insurance Program (CHIP).

So "a lot of the new enrollment in the non-expansion states is going to be children," Buettgens said.

Just more than half of states expanded Medicaid coverage. Many of those who chose to run their own marketplaces tended to have the highest number of new Medicaid members, Buettgens said. For instance, Washington state was very successful in integrating its state-run marketplace with its Medicaid and Children's Health Insurance Program.

"That states where the integration was made a priority and it was achieved, you definitely see the difference in enrollment" in Medicaid, he said. "But even states like Oregon that had real information technology problems with its marketplace interface and still do, took other pathways to enroll Medicaid people."

Oregon officials searched out people who might be eligible for Medicaid through community outreach programs and screening people eligible for food stamps.

Other states like New Jersey, which expanded Medicaid but is using the federal exchange, have "enrolled everyone that we are able to enroll from the federal marketplace at this time," Nicole Brossoie, a spokeswoman for the New Jersey Department of Human Services, wrote in an e-mail.

"That's about 150,000 people" put on the rolls by the state's contractor, Xerox, she noted. "At one time, the application backlog was as high as 50,000 in the counties and over 10,000 with Xerox. We're now about 37,000 in the counties and [fewer] than 1,500 with Xerox."

Pennsylvania, meanwhile, is waiting for a verdict from HHS about its plan. Gov. Corbett expects it to be approved, though the more controversial elements may be delayed. Critics, however, say the state has lost more than $1 billion in federal Medicaid payments by waiting a year.