The cost of Medicaid coverage for the uninsured: evidence from Buncombe County, North Carolina.

Background: The Affordable Care Act gives states the option to expand state Medicaid programs to cover many who are currently uninsured. The potential financial impact has not been thoroughly examined. We characterized the health risk of uninsured adults in Buncombe County, North Carolina, relative to that of local Medicaid recipients, to estimate the cost of expanding Medicaid coverage to include the uninsured.
Methods: We obtained de-identified patient enrollment and claims data for 2008 from the Division of Medical Assistance, North Carolina Department of Health and Human Services and from the 3 safety-net providers who care for most of the county's low-income uninsured adults. We used the Chronic Illness and Disability Payment System (CDPS) risk-adjustment tool to measure the relative health risk of the two populations. Based on actual spending in the Medicaid group and its health risk relative to that of the uninsured, we then projected how much it would have cost to provide Medicaid coverage for these uninsured in 2008.
Results: We estimated, based on CDPS adjustment for demographics and diagnoses, that these uninsured adults would have incurred costs 13% greater than those of the actual nondisabled adult Medicaid population. The projected cost of providing Medicaid coverage to these uninsured would have been $4,320 per person.
Limitations: Data were drawn from only the 3 major safety-net organizations and therefore excluded care obtained from other safety-net providers. Also, this sample of uninsured people included some who are ineligible for Medicaid because of their citizenship status. Furthermore, Medicaid enrollment might lead to increased utilization, revealing a greater burden of illness than we detected.
Conclusion: In Buncombe County, uninsured adults who enroll in expanded Medicaid are likely to have somewhat more costly health problems than do currently enrolled nondisabled adults.