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Running head: FINANCIAL IMPACT
Financial Impact on Adults with Heart Disease
Christina Ezinski
Cleveland State University
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FINANCIAL IMPACT
Abstract
This paper explores the association between heart disease in adults in the United States and
healthcare financing. As heart disease is on the rise, so is the financial strain on American
households. The Affordable Care Act led to the expansion of Medicaid for low-income adults.
This expansion is on a state-by-state basis and provides healthcare for those in need. Medicaid
expansion has both positive and negative impacts on healthcare finance. However, as healthcare
coverage extends to more individuals, the risk and prevalence of heart disease should decrease.
Keywords: Heart disease, adults, Medicaid, United States
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Financial Impact on Adults with Heart Disease
According to the Centers for Disease Control and Prevention, the number one cause of
death in men and women in the United States is heart disease. Every thirty-seven seconds an
individual dies from heart disease totaling 647,000 deaths each year. According to race and
ethnic group, the highest percent of deaths occur in white and black individuals followed by
Asian American or Pacific Islander, Hispanic, and finally American Indian or Alaska Native.
Around half of United States adults have high cholesterol, high blood pressure, or smoke, which
are all major risk factors. Other factors include inactivity, alcohol abuse, obesity, diabetes, and
lack of a healthy diet (Centers for Disease Control and Prevention, 2019). According to the
American Heart Association, the costs associated with heart disease can cause financial burden
for low-income households, even for those with health insurance. The out-of-pocket costs can
total forty percent of household income and financial strain is around twenty percent. Lowincome households with insurance tend to have higher costs compared to uninsured, middleincome, and high-income households. Low education and low income have a negative
association with heart disease and these individuals have twice the risk compared to those with
higher education and higher incomes (American Heart Association, 2018b).
Population Funding
The 2018 National Health Interview Survey of United States adults concluded that adults
with heart disease under the age of sixty-five, 6.7% had private insurance and 11% had
Medicaid. In the survey, of those adults age sixty-five and older, 31.5% had private insurance,
35% had Medicare and Medicaid, and 28.7% had Medicare (Centers for Disease Control and
Prevention, 2018b). Medicaid coverage provides for around sixteen million adults who have
heart disease (American Heart Association, 2018a). More than half of the adults with Medicaid
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also have a heart disease history (Modern Medicaid Alliance, n.d.). Three out of every four
adults ages sixty-five and older with Medicare also have Medicaid and have three chronic
conditions, which includes heart disease (Musumeci, 2017). This public funding by the
government is necessary for majority of individuals with heart disease. These low-income
households require help by the government to prevent disease progression and the increasing
costs of healthcare are forcing people to register for Medicaid to meet their healthcare needs.
The Affordable Care Act is expanding Medicaid to aid more low-income households in
the United States. It would cover adults under the age of sixty-five with incomes 138 percent of
the poverty line. In 2019, Medicaid expanded to thirty-three of the fifty states. Idaho and
Nebraska are also expanding Medicaid in 2020. Each state has its own rules and regulations on
Medicaid expansion. The government is paying for most costs for Medicaid expansion and the
rest is covered by the states involved. In 2016, the federal government was covering all costs for
newly enrolled individuals, but now in 2020 the government will cover only ninety percent of
new enrollee costs. New enrollees in 2019 totaled ten million. For the states that have not
expanded Medicaid, around 2.5 million adults are not eligible for coverage that is affordable to
them. Those individuals with no insurance who live below the poverty line is double the amount
in states that did not expand Medicaid compared those states that did. Tennessee, Florida,
Georgia, Texas, and North Carolina make up the states with the highest number of uninsured due
to refusal of state Medicaid expansion (Health Insurance, 2020).
Around twenty-eight percent of Americans with Medicaid have heart disease and states
that did not expand Medicaid increase the chance that those who are uninsured will remain
uninsured. Medicaid expansion has resulted in less uninsured adults and less adults with heart
disease. Those with Medicaid are more likely to have heart disease compared to individuals with
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other healthcare insurance. Out-of-pocket costs with Medicaid coverage decreased and
individuals gained a 205 dollar cost reduction compared to the uninsured. These cost reductions
were higher for those with chronic conditions compared to those without, with a difference being
279 dollars compared to 152 dollars. It is estimated by the Congressional Budget Office and
Medicaid that Medicaid spending will rise 292 billion dollars from 2016-2026, which is a sixtynine percent increase (American Heart Association, 2016).
Financing Trends
In 2015, Medicaid enrollment and spending increased and began to slow to 3.9 percent in
2016 and 2.7 percent in 2017 nationally. State spending increased from 2.4 percent in 2016 to 3.5
percent in 2017 as Medicaid expansion increased. States that expanded Medicaid paid five
percent of the costs for new enrollees in 2017. This state spending, however, was slower than
other spending growth. This cost increase was due to the federal government paying all costs for
expanding Medicaid in 2016 and then reducing the costs they were willing to cover for the states
in 2017. The spending growth of state Medicaid was 3.5 percent, which is 0.4 percent less than
the total amount of Medicaid spending (Rudowitz & Valentine, 2017). Medicaid enrollment in
2015 was 13.2 percent and continued to decrease over the next few years. In 2016 enrollment
decreased to 3.9 percent and 2.8 percent in 2017. Amount spent on Medicaid funding was higher
in 2017 compared to enrollment rate (Rudowitz, Hinton, & Antonisse, 2018).
In 2019, Medicaid accounted for sixty-five percent of grant funds, making it the largest
grant and main growth for state grants. As Medicaid expanded to more low-income households,
federal funding covered all costs up to 2016 and now covers ninety-percent of costs. This is due
to Medicaid spending increasing seventy-three percent from 2008 and is the majority of growth
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in grants by the federal government for health in the states. These funds grew in 2015, which was
the year that majority of states expanded Medicaid (PEW, 2020).
Financial Impact on Population
Medicaid has had a positive outcome on health for many individuals in the United States.
Around one-third of adults with heart disease stated they were diagnosed when enrolled in
Medicaid. About two-thirds of adults stated access to prescriptions increased and ninety percent
had a primary care visit in a year of enrollment (Gavin, 2019). According to JAMA Cardiology,
studies find that adults residing in states that agreed to Medicaid expansion had a decreased
probability of dying from heart disease. These states decreased mortality rate by two thousand
deaths each year or about 4.3 less deaths out of 100,000 individuals. Mortality rate has increased
in states that did not expand Medicaid. There was a strong association between states with higher
numbers of low-income households, Medicaid expansion and heart disease related deaths. There
has been a positive correlation between providing healthcare to those with lower incomes and an
improvement in health finance since Medicaid expanded. With improved finances of institutions,
quality of healthcare also improved and the health of the individuals seeking care (Reichel,
2019).
As Medicaid expansion increased, so did the costs to provide for the growing need.
Medicaid expansion led to high enrollment and high costs associated. The number of enrollees
that was projected by state officials was half the amount of those who ended up enrolling and
were eligible. The amount or cost per person was also double the amount that officials
anticipated. The reason for this increased number is that individuals with private insurance and
those who qualified for Medicaid expansion took advantage of the funding. If the states that did
not expand Medicaid were to expand, it is estimated over two million adults would switch from
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private insurance to Medicaid. Medicaid funding is provided by tax money, which would need to
be increased to provide for the increased need for Medicaid funding. Another downfall is those
with private insurance who enroll for Medicaid are taking resources away from those individuals
who really need this expansion of welfare (Ingram, Horton, & Stehle, 2019).
Financing Issues
The main issue with expanding Medicaid is the financial strain on the state and taxpayers.
In the state of Montana in 2018, I-185 was an initiative to increase tax on tobacco products to
fund Medicaid expansion. This proposal would increase taxes on cigars, cigarettes, electronic
cigarettes, and vaping products. The state would generate seventy-four million dollars with
twenty-six million used to cover part of the sixty million dollar Medicaid expansion. The thirtyfour million needed to cover the rest of the expansion would be paid by taxpayers, so taxpayer
debt would not be as large. This initiative, however, did not pass. As costs continue to increase,
so will the demand of funds. This may lead to future increases in taxes and lead to mandatory
cuts, such as educational funds and reduction of quality of care in healthcare (Aiello, 2018).
Other states with Medicaid expansion increased fees to provide funding to support the
healthcare expansion. An example of an increase in these fees is the increased rate for primary
care visits in Medicaid to match that of Medicare. The increased fees also help support Medicaid
patients by increasing the willingness of a provider to accept a patient with Medicaid. The
workforce is also changing the way patients are seen. Many places are now using nurse
practitioners to meet the growing demands of the healthcare workforce. This is increasing access
to care, including specialists, and reducing wait times to see a provider (Saloner, 2018).
To address the funding issue of Medicaid expansion, I would agree that taxes would have
to increase to meet demands. I think it would only be fair if taxes were increased on goods and
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services that everyone uses and that make a large profit from consumers. By increasing taxes on
a good that is in high demand by a small amount of tax per item, the amount of revenue produced
can go towards funding Medicaid expansion. I do not agree that only taxpayers should suffer a
high financial burden due to this increase. Increased taxes for those who are lower income, but
do not meet the requirements for Medicaid, may end up meeting those requirements due to
increased debt. I believe that the requirements to obtain Medicaid should also be stricter,
especially for those who are able to afford private insurance. This would decrease state costs and
allow those who need Medicaid to obtain it. Increasing deductibles for the working class can also
help provide funds that could be used towards healthcare for low-income families.
The 2017 tax cuts from the Tax Cuts and Jobs Act were supposed to help the lower
income class and increase jobs. According to the Institute on Taxation and Economic Policy, in
2018 ninety-one corporations did not pay income taxes and in 2019, 379 corporations paid 11.3
percent taxes, which is half the amount that President Trump stated under his tax law. Economy
growth was estimated to increase by four to six percent, but in 2019 averaged 2.4 percent
growth. Corporations are using their money saved to buy stock and increase their wealth. The
amount of money these corporations and higher-class individuals are saving could be going
towards Medicaid expansion (Clemente, 2020). An increase in taxes for the wealthy individuals
would be a small amount for them and a large amount for the federal government for funding.
Another cost reduction that could increase funds for Medicaid is the costs for inmate
incarceration. In 2016 the average cost per day per inmate was 94.82 dollars, which totals
34,704.12 dollars each year. In 2017 cost per inmate increased. The cost per inmate per day
increased to 99.45 dollars or 36,299.25 each year per inmate (Federal Register, 2018). This could
be an entire salary for one person that is being used to pay for one individual that is incarcerated.
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In my opinion, I do not see the need to spend that amount on these individuals. They are there for
punishment and instead are eating more or better food than some low-income households and
have the opportunity for physical activity, such as lifting weights, and reading to educate
themselves. Compared to some individuals, they are living better lives in prisons than others are
outside of the prisons. If these costs can be reduced to what is necessary for survival for these
individuals, it would result in money that could go towards low-income households that are
barely making it day by day to provide for their families and provide shelter, which is all paid for
those individuals in prison.
Regulations
To obtain funding from the federal government, each state has certain regulations they
must follow. There are specific populations of individuals that meet certain requirements to
obtain Medicaid assistance. Women who are pregnant and have an income that is below the
poverty line, parents who were eligible for money assistance before the welfare reform,
individuals with disabilities and seniors that receive money assistance from the Supplemental
Security Income program are all meet the requirements for Medicaid and are considered to be a
mandatory population. There is also an optional population that receives funds if eligible. This
population includes parents and pregnant women whose income is above coverage limits and
seniors and the disabled with an income below poverty level. There are also individuals who do
not meet Medicaid eligibility due to their income, but whose high medical debt reduces their
income to a limit that is eligible for Medicaid. Under Medicaid expansion, those individuals who
are close to poverty level and have no disability or children are also eligible. Even with low
incomes, not all individuals meet eligibility requirements. Adults over the age of twenty-one who
are poverty level and have no children, and are not pregnant, disabled, or elderly are not eligible
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for Medicaid in nineteen states that expanded Medicaid. There are also limitations on immigrant
adults. Some states will cover legal immigrant pregnant women. For illegal immigrants,
however, Medicaid is not available to them until they have resided in the country for five years.
This is the law even if the individuals meet the Medicaid requirements within those five years of
residency (Center on Budget and Policy Priorities, 2016).
Every state individually decides which populations of those listed are considered eligible
in their state. Neighboring states may have different eligibility requirements. The states also
decide what optional services under Medicaid they want to cover. An example is a state not
covering dental care and hearing aids for those with disabilities and senior citizens. These
services are not considered critical for an individual, so the state decided they do not want to
cover costs of those specific services. These services have flexibility in the duration and amount
provided but they must be adequate to meet Medicaid’s goals. An example is a state covering
hospital services, but limiting the number of hospital days that they will pay. Other mandatory
services include nurse practitioner, midwife, and physician services, hospital services inpatient
and outpatient, x-rays, laboratory, services and supplies needed for family planning, federal and
rural health centers, and home health and nursing care facilities for adults twenty-two years old
and older. For every dollar the state will spend, the federal government will match in funds for
Medicaid. This fixed percent is called Federal Medical Assistance Percentages (FMAP) and is
different for each state. In states that have an increased number of poor individuals, the
government will provide higher funds to that state. On average, the government will pay from
fifty-seven to sixty-percent of Medicaid costs, and in states with more poor individuals, they pay
up to seventy-three percent of costs (Center on Budget and Policy Priorities, 2016).
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Medicaid pays health care providers, hospitals, nursing homes, and managed care plans
directly if they deliver care to Medicaid patients. There is not a requirement for healthcare
providers or services to provide care to Medicaid patients, and some choose not to. Medicaid
provides for around forty percent of long-term services and sixty percent of nursing home
residents, which is about one-fourth of Medicaid spending. The other three-fourths of spending is
on prescription drugs, physicians, and hospital coverage. Some hospitals will be reimbursed for
costs associated with those who have low-income and uninsured patients. This reimbursement is
called Disproportionate Share Hospital payments and make up three percent of spending (Center
on Budget and Policy Priorities, 2016).
Public Policy Impact
Public policy is a government action that takes place when there is a rising issue in
society. As heart disease is now the leading cause of death in men and women no matter what
race or ethnicity they are, the government decided to take action. This health issue is increasing
costs of health care as one-third of the population has at least one type of cardiovascular issue.
Each state has financial burden related to Medicaid enrollment. The Affordable Care Act by the
government decided to take action and create a health reform. This reform required health care
plans to pay for preventative services that would decrease the probability of an individual
developing heart disease. As early detection and behavior and lifestyle changes are key factors in
prevention, the preventative services provided include cholesterol and blood pressure readings
and counseling on medications, diet, weight loss, and smoking cessation. The National
Prevention, Health Promotion and Public Health Council was also developed by the Affordable
Care Act to create a National Prevention Strategy that made recommendations to make
prevention and wellness the nation’s goal to decrease the number of preventable deaths and
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disabilities in America. In 2011 there were legislative trends for heart disease. These trends
included disease management programs, services provided to employees of the state who
suffered heart issues, requirements for congenital heart disease screenings and reporting, and
encouragement of education on CPR, defibrillator use and physical activity (National Conference
of State Legislatures, 2011).
The Million Hearts Initiative by the Centers for Disease Control and Prevention,
Medicare, and Medicaid is a government initiative aimed to inhibit heart attacks by one million
by the year 2022. This initiative will be done by coordinating with health professionals,
community involvement, and health systems. Physicians will be rewarded for providing care and
reducing and preventing heart attack risk. Education will focus on aspirin use, blood pressure and
cholesterol monitoring and management, cessation of smoking, physical activity, and healthy
diet. Funding will be provided to all fifty states. This initiative is focusing on healthcare
collaboration to make this successful (Centers for Disease Control and Prevention, 2018a).
Conclusion
Medicaid expansion has provided healthcare to many individuals in need throughout the
United States. This healthcare expansion is decreasing the number of deaths related to heart
disease and is promoting health by providing preventative treatments. The increased costs
associated with the expansion may be a financial burden for each state individually, but I believe
the government will find a way to increase funding without placing a large financial strain on the
working class that is providing state tax money. With healthcare initiatives for prevention and
education on a healthy lifestyle for a greater number of individuals, the number of adults with
heart disease should be trending down. There is hope that heart disease will no longer be the
number one cause of death in men and women in the United States.
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