Expanding Medicaid can cut private health risk, feds say

If a state takes Medicaid expansion money, that could improve the health level of its commercial individual health risk pool enough to cut individual health premiums.

Analysts at the Office of the Assistant Secretary for Planning and Evaluation, an arm of the U.S. Department of Health and Human Services, make that case in a new commentary.

The analysts compared individual exchange plan prices in counties in states that took Affordable Care Act Medicaid expansion money and in counties across the state line in states that rejected Medicaid expansion money.

The HHS analysts looked at price numbers for 94 counties in 19 states.

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The analysts found that individual exchange plan premiums were 7 percent lower in the Medicaid expansion state counties.

That might be partly because the Medicaid expansion program provides money states can use to make Medicaid available to adults earning from 100 percent to 138 percent of the federal poverty level. 

About 20 percent of the people in that near-poor income category are in fair or poor health, compared with just 8 percent of people with incomes over 138 percent of the federal poverty level, the analysts say.

Simply putting near-poor people in Medicaid plans, rather than individual health plans, could cut commercial plan costs by reducing the percentage of individual health enrollees in fair or poor health, the analysts say.