Over 30% of Black, Latinx, and Indigenous populations in the US are enrolled in Medicaid programs; more than half of all Medicaid enrollees are people of color. As such, Medicaid policies disproportionately affect populations of color. As more institutions reckon with historical and current injustices due to centuries of racism and racist policies, understanding how federal programs and policies support or obstruct the well-being of people of color is critical to racial justice.
The Medicaid Program
Established in 1965, Medicaid provides access to healthcare for low-income people, including children, parents, and people with disabilities. Unlike Medicare, which was established at the same time, Medicaid is jointly administered by states and the federal government, and its implementation varies widely across the country. Although Medicaid eligibility has expanded numerous times, the 2010 Affordable Care and Patient Protection Act (ACA) was the largest single expansion, mandating Medicaid eligibility to US residents with incomes up to 138% of the Federal poverty line (just $21,960 for a family of three as of January 2021).
However, before it could go into effect in 2014, the Supreme Court ruled that the Medicaid expansion provision was unconstitutionally coercive. This meant that individual states could choose whether to expand eligibility. Only 27 did so in 2014, but 12 more states have since expanded eligibility. Another 12 have yet to commit to expanding, with most of those in the South. Regardless, Medicaid now covers about one out of every 4 Americans. Enrollment has grown nearly 10% since the start of the pandemic.
In the 12 states yet to expand Medicaid, most childless adults are not eligible for Medicaid, and parents are only eligible if they make less than a median of 41% of the Federal poverty line. In addition, because the ACA expected all those below the poverty line to have access to Medicaid, subsidies for insurance purchased on the “marketplace” are not available for those individuals—what some call the coverage gap.
Financial Effects of Medicaid
While Medicaid’s primary purpose is to provide access to healthcare, research has identified many ancillary benefits. Medicaid expansion decreases evictions by reducing unexpected out-of-pocket medical expenses. It has been linked to decreases in the use of payday loans and increased housing stability for enrolled individuals. The Oregon Health Insurance Experiment found that Medicaid coverage halved an individual’s likelihood of skipping other bills or borrowing money to pay for medical expenses and all but eliminated catastrophic out-of-pocket medical bills. One study found post-expansion decreases in worry about food security. Medicaid supports positive mental health and is a crucial safeguard promoting financial resilience for millions of households.
With the potential economic impact of Medicaid in mind, Naomi Zewde and Christopher Wimer of Columbia School of Social Work built on the foundational work of Benjamin Sommers and Donald Oellerich, quantifying the impact of Medicaid on household poverty status. Their work, Antipoverty Impact of Medicaid Growing with State Expansions Over Time, investigated the extent that the poverty rate changed in states that expanded Medicaid compared to states that did not. They also compared actual poverty rates to what would be expected in a counterfactual world without Medicaid. As the title of their paper suggests, they found that not only does the reduction in out-of-pocket medical expenses decrease the overall poverty rate, but this effect is growing as the Medicaid-eligible population grows.
Adapting their methods, we calculated differences in poverty rates between the world as it is and a counterfactual world without Medicaid, stratifying the results by ethnoracial group. Our goal was to evaluate if there is a disproportionate financial burden or benefit from enrolling in Medicaid. In other words, are the economic effects of Medicaid antiracist?
Is Medicaid Antiracist?
America’s pervasive and persistent anti-Black racism has left powerful marks on health and healthcare in this country. Inequities in health outcomes, access to healthcare, and the availability of health-supporting resources exist for nearly every measure examined. From life expectancy, infant mortality, and maternal mortality, to morbidity measures like heart disease, cancer, and diabetes incidence, to acute infections like flu, pneumonia, and Covid-19, people of color in the US face disproportionate burdens of poor health. Underlying these are centuries of racist policies that produce predictable deficits in the availability of health-supporting resources. Community disinvestment, disproportionate application of the criminal justice system, and unjust housing policies that resulted from and further enforced racial hierarchy have consigned majority Black, Latinx, and Indigenous areas to cycles of poverty perpetuated by ostensibly “race-blind” policies.
To combat conditions that perpetuate the legacy of American racism, policies should not merely be race-neutral but antiracist. In his book How to be an Antiracist, Ibram X. Kendi explains that “there is no such thing as a nonracist or race-neutral policy. Every policy … is producing or sustaining either racial inequity or equity between racial groups”. Through that lens, and understanding that Medicaid disproportionately provides coverage for people of color, we must ask—is Medicaid antiracist? There are several dimensions from which to examine this question. For this analysis, we looked at the antipoverty effect of Medicaid by ethnoracial group, which has not been extensively described.
Our Findings
The figure below illustrates our findings. For Black and Latinx populations, Medicaid provides important financial support at baseline, with a 1.5-2.0% reduction in poverty due to the Medicaid program before expansion. That antipoverty effect increases more acutely for these populations as Medicaid expands to cover more lives and as out-of-pocket spending increases. From 2010-2019, the antipoverty effect for all populations increased by 0.5%, the equivalent of 1.7 million fewer Americans in poverty. But for Black and Latinx populations, the effect grew by 0.9%.
Figure 1. Counterfactual poverty rates in a world without Medicaid relative to actual poverty rates, 2010-2019 (click for full-size figure)
These findings may not be surprising when considering that a greater proportion of Black and Latinx populations get their health care through Medicaid, but they have real policy implications. The three states with the largest populations of Black residents—Texas, Florida, and Georgia—have not yet expanded Medicaid. Five of the eight states with the highest proportion of Black residents have not yet expanded Medicaid. Nearly 20 million Latinx residents live in states that have yet to expand Medicaid eligibility.
Moving Forward
President Biden campaigned on protecting and building on the ACA—through a public insurance option similar to Medicare, increasing tax credits, auto-enrolling low-income families in Medicaid, and incentivizing the 12 holdout states to expand eligibility. These actions will be important steps in securing a more equitable healthcare system. But unlike more sweeping changes—such as Medicare-for-all, proposed by many of his Democratic colleagues during the presidential primary—he is looking to perpetuate an inherently inequitable system.
Medicaid has addressed a critical insufficiency in the US healthcare system for the last 50 years. The expansion of the Medicaid-eligible population in the mid-1990s and -2010s increased the magnitude of the critical support it provides. Without Medicaid, low-income populations (disproportionately Black, Latinx, and Indigenous) would be worse off—in health outcomes, access to care, and financial stability.
That said, in a just and equitable healthcare system, the gap it fills would not exist. Medicaid programs, on average, reimburse providers and hospitals at lower rates than Medicare or private insurers. This disincentivizes care for low-income patients, and by extension, patients of color. Medicaid enrollees experience difficulty accessing preventative physical and mental health care due to a scarcity of providers accepting Medicaid.
Insofar as Medicaid is the instrument we have available to care for low-income Americans, we must do more to ensure broader access to the program. But if we are looking for a just healthcare system, abolishing separate systems for those with means and those without is the truly antiracist solution.
Editor’s note: This post was one of the winners of our 2021 Student Blog Competition. Congrats, Zach!