Advocates for Evidence-Based Health Policy Speakers
The Marketplace vs Medicaid
While the Affordable Care Act (ACA) sought to provide a broader range of coverage options for Americans regardless of their ability to pay, Medicaid expansion for those with family incomes below 138% of the Federal Poverty Level is one option that states continue to decline. The differences on actual out-of-pocket expenditures under Medicaid as opposed the Marketplace plans provides additional justification as to why states should step outside of the political rhetoric surrounding Medicaid and look towards the benefits that their citizens will gain.
By comparing expansion and non-expansion states after the enactment of the ACA, a recent study showed a decrease in the average total out-of-pocking spending and a decrease in the out-of-pocket premium spending in states that adopted Medicaid expansion. The average consumer who was now able to enroll in Medicaid spent less not only in monthly premiums but also in additional cost-sharing requirements.
With Medicaid also being less restrictive as far as eligibility and enrollment, the advantages of Medicaid expansion are obvious to the average consumer. Arguably, the confusion of the Marketplace with its metal tiers and confusing terminology were one possible cause of poor consumer enrollment. However, States cannot use the Marketplace as a substitute for Medicaid expansion. States that adopted Medicaid expansion showed a higher level of uptake of coverage, as compared to Marketplace coverage alone.
Policymakers should recognize the importance of consumer decision-making in the long term impacts of healthcare reform. Though the Marketplace involves more private insurance industry competition and minimizes government coverage expansion, its outcome is ultimately worse. When the public does not understand the complex nature of the Marketplace and does not enroll – or ends up paying more out-of-pocket – there will be a rejection of private insurance plans as we are seeing now with the clamor over narrow networks and high deductibles. Decreased enrollment across the board increases costs throughout the system as more expensive utilization (e.g. through EDs, lack of primary care and preventive health care) is sustained as the only other option.
States should stay focused on the benefit of long term enrollment, not the immediate budgetary impact that Medicaid expansion brings. The consumer will act rationally and ultimately the increased enrollment in any option will result in more favorable outcomes for our communities as a whole.
Abstract
In states that expanded Medicaid eligibility under the Affordable Care Act, nonelderly near-poor adults-those with family incomes of 100-138 percent of the federal poverty level-are generally eligible for Medicaid, with no premiums and minimal cost sharing. In states that did not expand eligibility, these adults may qualify for premium tax credits to purchase Marketplace plans that have out-of-pocket premiums and cost-sharing requirements. We used data for 2010-15 to estimate the effects of Medicaid expansion on coverage and out-of-pocket expenses, compared to the effects of Marketplace coverage. For adults with family incomes of 100-138 percent of poverty, living in a Medicaid expansion state was associated with a 4.5-percentage-point reduction in the probability of being uninsured, a $344 decline in average total out-of-pocket spending, a 4.1-percentage-point decline in high out-of-pocket spending burden (that is, spending more than 10 percent of income), and a 7.7-percentage-point decline in the probability of having any out-of-pocket spending relative to living in a nonexpansion state. These findings suggest that policies that substitute Marketplace for Medicaid eligibility could lower coverage rates and increase out-of-pocket expenses for enrollees.
PMID: 29364736
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