Pent-up demand in an early Medicaid expansion program: Findings from the Low Income Health Program in California

Improving access to primary and preventive care is one of the tenets of the Affordable Care Act (ACA) and is meant to reduce avoidable, costly emergency room care and increase less expensive primary care, especially among low-income individuals who lacked previous access to regular primary care. The Low-Income Health Program (LIHP), California’s early Medicaid expansion, provided a unique opportunity to evaluate the utilization of individuals covered for the first time and those who had received previous coverage under other public programs and had previous experience with the health care system.

The study followed an observational longitudinal design and included individuals who were enrolled in the first year of LIHP and met the new Medicaid eligibility requirements under the ACA (n=106,540) from five counties that also participated in the Health Care Coverage Initiative (HCCI), the previous program in California. We identified enrollees’ rates of utilization from LIHP claims data and linked them to any existing enrollment and claims data from the previous two years. Using ordinal logistic models with random effects, we estimated the association between previous coverage and individuals’ quarterly rates of evaluation and management (EM) emergency room (ER) visits, and hospitalizations during LIHP. Covariates included demographic characteristics and chronic conditions.

Individuals new to LIHP initially had high rates of ER visits and hospitalizations that then declined over time. The probability of higher rates of ERs visits among new LIHP enrollees declines from 11% to 6%.  Those with previous coverage had relatively constant rates of ER use and were less likely to go to ER (5%). A similar trend appears in inpatient hospitalizations. The probability of having high rates of hospitalization among new LIHP enrollees declines from 6% to 2% but is constant among those with previous coverage (2%). At the same time, the rate of EM visits is highest among those who had previous coverage under HCCI and increasing among those new to LIHP.

The results are consistent with the hypothesized increase in EM use and subsequent reduction in ER use after gaining coverage. Lower cost primary care visits were substituted for higher cost ER visits, reducing the strain on emergency departments. Within one year, new, previously uninsured enrollees behaved similarly to those previously covered.  The coverage expansion achieved by the Low Income Health Program provides evidence to support the expansion of Medicaid as a way to deal with uninsured population’s previously unmet needs.