Using Behavioral Economics to Inform the Integration of Human Services and Health Programs under the Affordable Care Act . Implications for targeted enrollment into Medicaid


In sum, the literature described above finds that apparently modest procedural burdens—the requirement to complete a form or even check a box, for example—can have a substantial impact on program participation, as can eliminating such burdens by completing forms on consumers’ behalf. This has important implications for implementation of targeted enrollment strategies permitted by the Centers for Medicare and Medicaid Services (CMS). In May 2013, CMS issued a State Health Official (SHO) letter that permits states to provide consumers with Medicaid based on their receipt of SNAP, pursuant to waivers under Social Security Act §1902(e)(14)(A) that bypass the normal requirement of individualized income determinations.47 SNAP recipients can automatically receive Medicaid under such waivers, so long as such recipients are known to meet Medicaid’s nonfinancial eligibility requirements.

This option offers the potential to reach numerous uninsured individuals. Of the estimated 26.9 million childless adults who will qualify for Medicaid if all states expand eligibility, SNAP already serves 9.4 million, or 35 percent.48 SNAP provides benefits to an even higher proportion—56.7 percent—of uninsured parents who will qualify for Medicaid.49

However, CMS has made clear that these waivers do not eliminate the legal requirement to file Medicaid applications. Each SNAP recipient has already submitted a SNAP application, which CMS takes into account in determining whether the Medicaid application requirement has been met. CMS’s SHO letter explained that the combination of data from the SNAP application and consumers taking any of the following steps can satisfy the Medicaid application requirement:

  • Checking an “opt-in” box on the SNAP application or recertification form;
  • Making a telephonic or on-line acknowledgement after receiving a Medicaid card; or
  • After receiving a Medicaid card, “indicat[ing] that they are applying for Medicaid when they go through the process of selecting a managed care plan,” which “also activates the Medicaid card.”

Others have suggested a fourth option—namely, sending “a very short form to confirm [consumers’] desire to apply for Medicaid and collect a signature and any additional information the state may require.”50

The research described above makes clear that when consumers must meet apparently modest procedural requirements, such as checking an opt-in box, returning a simple form, or making a telephonic or on-line acknowledgement, they are much less likely to participate in available programs, because of inertia, procrastination, short-term orientation, distraction, confusion, actual underlying preferences, or other factors. The first four states to implement targeted Medicaid enrollment campaigns have sent mailings to consumers who were in the target group—that is, they were not enrolled in Medicaid and they appeared to qualify based on their receipt of SNAP or, in some states, family members’ eligibility for Medicaid or CHIP. Consumers were invited to sign up for Medicaid by returning a simple form or, in some cases, calling a toll-free number. Nearly a quarter of a million people enrolled by November 15, but as one would predict based on the above-described research, most did not respond (table 3). The overall response rate was 34 percent. However, in Arkansas and West Virginia, where officials made telephone calls to all mailing recipients who did not initially respond, response rates were much higher—41 and 46 percent, respectively, compared to 33 and 27 percent in Illinois and Oregon, which did not make such extensive calls immediately following the mailing.51

Table 3. Results of targeted enrollment initiatives reported by 11/15/13

State Target group: SNAP recipients Target group: People with family members enrolled in Medicaid or CHIP Phone response accepted? People sent mailings Mailing response rate People found eligible for Medicaid and enrolled
  Total: 655,000 34% 223,065
Arkansas Y     154,000 41% 63,465
Illinois Y     123,000 33% 35,500
Oregon Y Y Y 260,000 27% 70,000
West Virginia Y Y Y 118,000 46% 54,100

Source: Manatt Health Solutions and the Kaiser Commission on Medicaid and the Uninsured, 2013. Note: total response rate is the average for all states, weighted based on the number of mailing recipients.

Hundreds of thousands of consumers quickly gained coverage in these states because of response rates significantly higher than those achieved by past mailing initiatives aimed at eligible individuals not yet participating in health programs.52 For example, Oregon’s initial 27 percent response rate was more than five times the response rate achieved when it implemented ELE by sending mailings to the parents of children who qualified for Medicaid based on SNAP receipt.53 New enrollees in these four states thus represented tangible and significant early coverage gains that showed the potential impact of targeted enrollment strategies. However, if this approach can be adjusted to further incorporate the findings of behavioral economics research and eliminate the interposition of procedural obstacles before eligible consumers are enrolled into Medicaid—making program participation rather than nonparticipation the default if consumers fail to act—many more eligible uninsured would likely receive coverage.

Can SNAP recipients obtain Medicaid without being asked to complete paperwork?

CMS’s May 2013 SHO letter indicates that, for consumers who have successfully completed the SNAP application process, managed care plan selection can be used to meet Medicaid’s application requirements. Two state Medicaid programs have already shown how consumers can complete the managed care plan selection process without being required to fill out paperwork.

  1. Massachusetts default enrollment. Under Massachusetts’ 2006 reform, one in four newly insured residents received coverage through the state’s Commonwealth Care program, based on data matches with the state’s preexisting “free care pool,” without any need to file application forms. Consumers qualifying for premium-free coverage had two weeks to select a plan. Those failing to make a choice were automatically assigned a plan. The state structured this strategy to achieve both enrollment and expenditure goals. Despite increased enrollment, Massachusetts saved money by giving the largest share of default enrollees to the plans that made the lowest secret bids stating the prices for which they would serve all enrollees (not just those who were auto-assigned).54

    To meet the Medicaid application requirement now articulated by CMS, states would need to modify this approach. For example, they could require plans chosen by default to contact the consumer and obtain consent before capitated payments begin (or before such plans receive more than a limited number of payments). In effect, the outreach that Arkansas and West Virginia conducted at public expense would instead be done by managed care organizations, in response to financial incentives created by the state.55

  2. South Carolina consent through card use. To implement ELE, South Carolina provided Medicaid to children based on their receipt of SNAP or TANF, starting in September 2012. Families were sent a letter giving them a chance to opt out of Medicaid coverage. The letter also encouraged them, if they did not opt out, to select a managed care plan from among an enclosed list of options. The letter further explained that if they did not choose a plan, they could still obtain fee-for-service care for their children; and that seeking such care would both provide consent to Medicaid enrollment and trigger a second, mandatory round of managed care selection. After that second round, families still not choosing a plan had one assigned by default. More than 92,000 children received coverage in nine months,56 representing a 15 percent increase in the number of eligible children participating in Medicaid.57 Because consumers must take action to show their consent and to initiate mandatory managed care enrollment, this approach, coupled with the prior filing of SNAP or Medicaid applications, would likely meet the Medicaid application requirement articulated by the May 2013 SHO.  


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