The new health reform law expands insurance coverage in a relatively new manner (expanding the number of persons purchasing their own insurance) and an old way (Medicaid expansions). Medicaid is the federal/state program that covers low income persons. It is really two programs, one that covers primarily pregnant women and kids (about 6 in 10 beneficiaries) and another that covers elderly and disabled persons who have become impoverished paying for long term care (mostly nursing home care). The 6 in 10 beneficiaries consume about 3 in 10 of the program dollars, primarily because most kids and pregnant women are relatively healthy; the long term disabled and elderly in nursing homes are the really expensive patients, and are among the most vulnerable members of society.
The long term care system, or which nursing home care is a part, has many problems, and the health reform law passed addresses this for future generations with the CLASS provisions. However, there is little that can be done in the short or medium term about Medicaid being the payor of nursing home care of last resort.
However, the reform law has substantially expanded the number of persons covered by Medicaid for acute care services (doctor, hospital, etc), by around 16 Million in 2019. This article lays out many of the issues related to relatively (as compared to other payers) low reimbursement rates that Medicaid pays. In the short run, the reform law increases payment rates especially for primary care, but after 2015 this costs will shift to states. [There is a general cost share formula between the federal gov't and states based on poverty in given states; in California, it is 50/50; in Mississippi, it is around 82% federal; in NC it is around 65% federal].
Medicaid has financed important health services for persons who would likely have gone without them, or who would have gotten them later when they were sicker. But, it has a stigma as you would expect with anything often referred to as 'poor people's insurance' and the relatively low payment rates mean that some physicians are unwilling or unable to treat Medicaid beneficiaries. The relative attractiveness of Medicaid payment differs from locale to locale depending upon alternative payment sources available, but it seems clear that there is much work to be done to either make Medicaid a more 'acceptable' payor, or seek a way to transition persons to other sources of insurance.
Over time, I would see it as a worthy goal to seek to end or at least reduce the size of acute care Medicaid (again, kids, pregnant women, lower income workers) and move them into private insurance markets, with premium support. This is where the functioning of the exchanges is so important. Will there be robust competition amongst insurance companies that will drive down premiums? If yes, then it would make it relatively easier to transition persons from Medicaid into private insurance. We have a great deal riding on getting the exchanges up and working well, and for consumers to actually embrace purchasing their own insurance.
If the exchanges work well, it would provide a way to open them up over time to those with employer based coverage, increasing choices, and perhaps to begin transitioning at least some persons from Medicaid into private health insurance purchased through exchanges.