An Obamacare migration?

Some people seeking insurance and health-care workers looking for jobs might hop states

A woman holds a health insurance marketplace pamphlet at a community clinic in Takoma Park, Maryland.
Andrew Harrer/Bloomberg/Getty Images

RICHMOND, Va. — Katherine Stanley, 54, is a small-business owner — a hot-dog vendor from Chesapeake, Va. — who barely makes enough money to support herself. Her gross sales range from $700 to $800 per month. She does not have health insurance.

Because Virginia is among the 26 states that have not embraced expanded health insurance for poor people under the Affordable Care Act, enrollment for which began a month ago, she does not qualify for Medicaid and will remain uninsured. If Stanley lived across the Potomac River in Maryland, which has expanded its Medicaid coverage, she would qualify. Maryland has enthusiastically embraced the Affordable Care Act and is trying to make it easy for uninsured people — around 800,000 in the state — to enroll. It has 325 “navigators,” who help people sign up. It has built its own online marketplace and has access to millions of federal dollars to recruit participants.

In Virginia, there are about 20 guides. The state has made no effort to publicize the law and even filed suit to block it. Because it has not embraced the Medicaid expansion after a 2012 Supreme Court decision gave states the choice of opting out, roughly 400,000 people there fall into what’s become known as the "Medicaid gap" — too wealthy to meet the program’s existing requirements but too poor to qualify for federal subsidies that would help them buy coverage.

The country's uneven embrace of the Affordable Care Act raises the possibility that some people may migrate from states that have rejected the law to ones that are fully participating. The migrants could include not only the uninsured but health-care professionals in search of work. Experts say it is too early to predict how many people may move: Not only is the law new, but it has faced some serious technical difficulties. If the past is any indication, however, uninsured people living near the state line may indeed change ZIP codes —and state affiliations — if it will put health care within their reach. The numbers are likely to be modest, however.

Meanwhile, hospitals in nonparticipating states are expected to be hurt financially, while the health-care business in states that are taking part could boom. Many, including Republican governors and legislators in states that sidestepped the Medicaid expansion under the Affordable Care Act, are watching the developments nervously. Virginia is eyeing Maryland. North Carolina is peering at Virginia. And the stakes are high. 

"Welfare migration"

Social scientists have a name for this type of movement: "welfare migration." But there has been less of it in the past than Is widely believed.

Studies have shown that such movements were typically restricted to border crossings. "There was a modest amount of welfare-induced migration for people living close to state borders," said Terra McKinnish, an economics professor at the University of Colorado at Boulder, "situations in which a relatively short-distance move could change one’s welfare benefit."

Any attempt to attach a number to this latest migration — before any of the benefits from Obamacare have even kicked in — would be, in the words of Simona Combi of the Urban Institute, a research organization, "highly speculative."

McKinnish, though, says people without children would be more likely to change addresses and states. "These individuals are more mobile, and therefore it is possible that they could have larger responses to differences across states in Medicaid eligibility," she explains. "On the other hand, being predominantly young and single without children, they will not value Medicaid as highly as a mother with young children, so it could be a wash."

Len Nichols, professor of health policy at George Mason University, agrees that the effects will likely be small. "If you believed that medical care was essential for survival and a nearby state expanded Medicaid eligibility and your current home state did not, a few seriously ill folks might consider it," he said, "but the normal waiting period for eligibility and costs/disruption of moving would pretty seriously deter most lower-income folks from moving, it seems to me, and lots of careful study of the evidence suggests this is true."

Stanley, the hot-dog vendor, is proof of that. "I'm established here," she said. "I have contacts and support here."

If Virginia does not reverse its policy, however, Stanley worries about what may happen to her. She has trouble with blood clots in her legs. She is diabetic and has a heart condition and thyroid problems. For the last few years, she has been receiving care from the Chesapeake Free Care Clinic, part of a network of local facilities that provide care for Virginians without insurance. About 75 percent of the patients in these free clinics would be eligible for insurance if the state expanded Medicaid, according to Linda Wilkinson, CEO of the Virginia Association of Free and Charitable Clinics.

If Virginia doesn’t expand the program, people like her will "do without," said Chris Lillis, a physician in Fredericksburg and a member of Doctors for America, which advocates for the expansion of Medicaid in the state. Stanley and Lillis spoke at a hearing last week in the state capital, Richmond, to examine whether Virginia should expand coverage.

Busloads of people wearing green T-shirts were brought in by Americans for Prosperity, one of the organizations funded by billionaires Charles and David Koch, to testify against expansion. They even had "warmers," who organized the seating in the jammed committee room and handed out bottled water.

Proponents of participation, many wearing blue T-shirts, were outnumbered and out-organized. Almost 200 people signed up to speak for three minutes each.

Health-care jobs

Even if few people do ultimately move in order to gain health insurance, medical workers in search of employment will, many in the industry believe.

The Wellmont Health Systems and Mountain States Health Alliance in the southwestern part of the state points out that if Virginia does not expand Medicaid, it will lose $7.8 billion in federal funding. Expansion, however, would add 30,000 jobs and $2 billion to the economy.

And a study in North Carolina by Regional Economics Models Inc. predicted that expansion in Medicaid would bring 25,000 new jobs to the state, many of them high-paying

If Virginia expands and North Carolina does not, those jobs and the people following them would move north, according to the North Carolina Justice Center. If Virginia does not, no one knows how many of its health care professions will cross the river to Maryland.

Dennis Vonderfecht, president of Mountain States Health Alliance, a health-care system in northeast Tennessee and southwest Virginia, said his hospitals have already cut 300 jobs since March and will cut another 200 if Virginia doesn’t expand Medicaid. His hospitals lose money when people without insurance seek care in emergency rooms, Vonderfecht adds. "What we were supposed to get in return was an expanded Medicaid program."

Virginia's reticence means Vonderfecht's Virginia hospitals lose out on $120 million in federal funding. "That’s a lot we will try to offset," he said. Last June, Wellmont cut about 50 positions from three Southwest Virginia hospitals and cited the lack of Medicaid expansion in the commonwealth as one of the reasons for the move.

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