Medicaid 2.0: Why Medicaid Isn’t a Dirty Word in Business
While the Affordable Care Act expanded Medicaid coverage for millions of Americans, the policy continues to stir debate in business. But the reality is that most criticism is a product of misunderstanding, not the symptoms of a flawed program.
For example, despite being the country’s largest health insurance program, Medicaid is often criticized as a system of handouts for people who don’t work. In reality, it’s a program designed to assist Americans who need a little boost after experiencing a setback. It enables millions of working individuals, families, children, elderly, pregnant women, and disabled persons to find affordable health coverage every day while keeping more money in their pockets.
In many cases, CEOs who have negative views of Medicaid know the political talking points surrounding it without understanding the policy details. They don’t realize the numerous ways Medicaid can benefit their business, their role as a leader, or their employees.
Debunking Medicaid Myths
Migrating eligible employees from company plans to Medicaid makes good financial sense for the business and employees.
Sound surprising? These common Medicaid myths could be clouding your vision:
Myth 1: Employed persons are ineligible for Medicaid.
Reality: Before expansion by the Affordable Care Act, Medicaid eligibility thresholds in most states were so low that only non-working or disabled persons could qualify for the program. In states that have expanded Medicaid eligibility, the program covers those who make up to 138 percent of the federal poverty level, which equates to $33,465 annually for a family of four in 2015. Now, 27 percent of uninsured Americans — or about 8.2 million individuals — are eligible for Medicaid.
So far, 31 states (including Washington, D.C.) have expanded Medicaid. In most of those states, at least half of the newly eligible Medicaid recipients are employed individuals. In the 19 states that haven’t expanded coverage, an estimated 57 percent of would-be-eligible people are employed, proving that working individuals and families can and do benefit from Medicaid.
Myth 2: Employees’ Medicaid enrollment can’t benefit a business’s bottom line.
Reality: Rising healthcare costs are an ever-growing business concern. The Henry J. Kaiser Family Foundation found that the average annual premium for employer-sponsored family health coverage reached $17,545 this year, with employees contributing an average of $4,823 toward coverage. And the ACA’s employer and individual mandates means more employees are signing up for company-sponsored health plans to avoid penalties, stretching corporate budgets even thinner.
But CEOs who facilitate employees’ Medicaid enrollment can save the company thousands of dollars per year. For starters, when employees switch to Medicaid from company coverage, the employer’s contribution drops from up to $13,000 per employee per year to $0. That’s right — zero.
Employers can also expect to see “soft” savings as more employees gain access to affordable healthcare. Improved employee health, lower absenteeism, greater company loyalty, reduced turnover, and increased productivity all translate to financial savings.
Myth 3: Medicaid provides inferior healthcare coverage.
Reality: Medicaid offers comprehensive health coverage with $0 deductibles, very low copays, and no or low monthly premiums. It covers all preventative and emergency services, as well as vision and dental care for children, other at-risk groups, and adults in most states. And when employees qualify for Medicaid, their entire household is also eligible. Dependent premiums for the company plan can cost several hundred dollars per month, making them unaffordable for most low-income employees.
Medicaid enrollees have nearly identical access to doctors as those with employer-sponsored insurance. And Medicaid recipients report the same or more satisfaction with their health plans as people with private insurance. There’s also evidence — like this 2012 study and this randomized trial in Oregon — that Medicaid improves patients’ health outcomes, from better preventative care to lower mortality rates.
Myth 4: Companies can easily facilitate Medicaid enrollments with in-house resources.
Reality: Applying for Medicaid is complex, particularly for non-native English speakers or those who are inexperienced at navigating bureaucracy. It requires lots of time and resources to complete just one enrollment, with applications requiring documentation such as green cards, pay stubs, and Social Security numbers for household members. HR teams can be quickly overwhelmed by assisting with enrollment for dozens of employees and their families.
Additionally, some employees may be unwilling to share personal information — like marital status or immigration status — at work. Because withheld information can result in denial of coverage, many companies struggle to get eligible employees through the application process.
Setting the Tone on Medicaid
CEOs who recognize Medicaid as a tool to grow their businesses and help employees have cleared the first hurdle; what’s left is getting the rest of the company on board. To make the transition to Medicaid as smooth as possible, remember these three steps:
- Share the facts. Especially with so many recent changes to the program, many business executives plainly don’t know the benefits of employee enrollment in Medicaid. That’s why it’s important for in-the-know CEOs to share how Medicaid can save the company money and improve employees’ lives. When CEOs work to make Medicaid enrollment a priority for eligible workers, the rest of the company will follow.
- Focus on eligible employees. Medicaid myths don’t just pervade the C-suite. Many employees think that because they’re working, they’re ineligible for Medicaid. Others may know but not have the time or resources to apply. Use emails, flyers, or meetings to inform employees that the company will assist them in determining eligibility and completing the application.
- Consider a third-party enrollment service. With all the challenges of trying to facilitate Medicaid enrollment in-house, outsourcing Medicaid enrollment services can save the company time and money. Qualified enrollment specialists not only understand the rules and regulations of Medicaid enrollment, but they can also offer confidential, in-person assistance to eliminate enrollment barriers.
There will likely always be myths about Medicaid floating around. But for CEOs, understanding the benefits of the program can be crucial to lowering healthcare costs while still providing employees with affordable, comprehensive insurance.
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Written by: Benjamin Geyerhahn, Chief Executive Officer and Founder of BeneStream.
He is the founder and CEO of BeneStream, a New York City-based company that uses a combination of technology and a multilingual call center to guide employers and employees through the Medicaid enrollment process.