Medicaid expansion slims ACA coverage premiums 7%

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Insurance premiums are significantly lower in states that expand Medicaid compared with states that have yet to to so.

Individuals who get coverage via ACA-sponsored health insurance marketplaces likely benefit from the effect of Medicaid expansion on premiums. Premiums are seven percent lower on exchanges in states that expand Medicaid, according to an HHS analysis.

The analysis found that the populations most impacted by Medicaid expansion--or lack thereof--include those with incomes below 100 percent of the federal poverty level, individuals whose incomes fall between 100 percent and 138 percent of the federal poverty level and individuals who only have health plans from exchange marketplaces.

Medicaid expansion--and the subsequent lower insurance premiums--impacts all three demographics in different ways. For those making less than 100 percent of the federal poverty line, Medicaid expansion is the only avenue for gaining health coverage, according to HHS.

For individuals making somewhere between 100 percent and 138 percent of the federal poverty line, Medicaid is likely to be the most affordable option.

States that have refused to expand Medicaid might look to Indiana, home state of Republican vice president nominee Gov. Mike Pence, which has worked with the Obama administration on a program to expand Medicaid. The modified expansion requires eligible residents to contribute a small monthly premium to a special health account. 

“We welcome the conversation” of alternative versions of Medicaid expansion, HHS Secretary Sylvia Burwell told the L.A. Times earlier this year.

States that have yet to implement the Medicaid expansion are mostly Republican-led. The expansion has clear financial benefits for state budgets. “Medicaid expansion is a fiscal win for states,” Robert Wood Johnson Foundation’s Kathy Hempstead said in a report earlier this month.