Impact of Medicaid disenrollment on health care use and cost.

Objective: The objective of this study was to compare the health care use of children who are covered by public insurance and uninsured children who live in a large urban area and the potential impact of disenrollment on health care use and costs if these children become uninsured.

Methods: The 2004 health care transactions for 43,313 uninsured children and 168,722 children who were insured by Medicaid/State Children's Health Insurance Program and living in the Phoenix metropolitan area were analyzed using a community-wide administrative health database (Arizona HealthQuery). Using a multivariate model of health care use by currently uninsured children, we examined the effect of 10% disenrollment of the children who were currently insured by Medicaid/State Children's Health Insurance Program.

Results: A 10% disenrollment would increase the costs of health care in the community by $3,460,398 annually, or $2121 for each child disenrolled. This increase in costs is attributed to a shift of care from ambulatory settings to more expensive emergency departments and an increase in hospital days. We determined that 69% of the change in emergency department visits, 58% of the change in hospital stays, and 74% of the change in ambulatory visits would be attributable to the change in insurance status.

Conclusions: Programmatic changes that result in disenrollment from public insurance programs will increase the number of emergency department visits and hospital days as well as the total community costs of health care. These increases in health care use can be expected to aggravate community problems of emergency department overcrowding and inpatient bed shortages. The majority of the changes in use are attributable to changes in insurance status, which results in a shift of care from less expensive ambulatory settings to emergency departments and increases in hospital days when children lose Medicaid/State Children's Health Insurance Program coverage.