How Health Law’s Medicaid Enrollees Strain the System

Many Low-Income Americans Have Gained Coverage, But Their Numbers Strain Some Health-Care Systems.

New Mexico’s decision to expand Medicaid has been a lifesaver for Kevin Gibson but a conundrum for his nurse practitioner.

The 46-year-old Mr. Gibson this year got coverage under the plan, went for a checkup and learned he had prostate cancer. Before 2014, Medicaid rules wouldn’t have considered him needy enough for eligibility. But the expansion, tied to the federal health overhaul, made him eligible, and last month Medicaid paid for robotic surgery to treat his cancer.

For his nurse practitioner, Jodi Padgett, the surge of Medicaid enrollees like him creates new opportunities, because some overworked local doctors are turning away new beneficiaries who then visit her practice. But Medicaid, the health plan for the poor funded by state and federal dollars, pays far less than private insurance. Mr. Gibson’s visits paid about $80, compared with about $160 for a patient with private insurance. Her profits are narrowing as she takes on more such patients, and she may eventually need to turn away additional beneficiaries.

The two New Mexicans in San Juan County show how Medicaid’s explosive growth—hastened by the Affordable Care Act—has created a paradox.

Many Americans with low incomes now have health coverage they couldn’t have gotten before this year under the act, widely called Obamacare. But their sheer numbers are straining some health-care systems that already don’t have enough doctors and staff. And the new Medicaid enrollees can challenge medical practices’ bottom lines in ways that lead them to turn some away.

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