By Thomas M. Selden, Brandy J. Lipton, and Sandra L. Decker
Health Affairs, December 2017
Affordable Care Act (ACA) provisions implemented in 2014 provide a valuable case study regarding the merits of using public versus subsidized private insurance to help low-income people obtain and finance health care. In particular, nonelderly adults with incomes of 100–138 percent of the federal poverty level gained Medicaid eligibility if they lived in states that implemented the ACA’s Medicaid expansion, whereas those in nonexpansion states became eligible for subsidized Marketplace coverage. Using data for 2008–15 from the National Health Interview Survey, we found that as of 2015, adults with family incomes in this range had experienced large declines in uninsurance rates in both expansion and nonexpansion states (the adjusted declines were 22 percentage points and 18 percentage points, respectively). Adults in expansion and nonexpansion states also experienced similar increases in having a usual source of care and primary care visits, and similar reductions in delayed receipt of medical care due to cost. There were, however, important differences: Adults in expansion states experienced larger reductions in out-of-pocket spending but also faced greater difficulty accessing physician care relative to adults in nonexpansion states.
From the Discussion
Since we focused on the population with incomes of 100–138 percent of poverty, it might not have been surprising that the magnitude of the decline in uninsurance rates was similar in both groups of states. This is likely because Medicaid coverage imposed zero or near-zero premiums on enrollees, and adults in nonexpansion states with incomes in this range were eligible for Marketplace subsidies—which limited premiums to 2 percent of income for the second-lowest-cost silver plan.
From the Conclusion
As a general rule, care should be taken when applying the results of any study to other policy settings. Applying our findings to reform proposals with different combinations of premium subsidies, patient cost sharing, provider incentives, and eligible populations would be no exception to this rule. In particular, we urge caution in extrapolating our findings to lower-income adults, who may have greater unmet need, additional financial barriers, and different responses to public versus subsidized private insurance.
By Don McCanne, M.D.
By comparing states that expanded the use of Medicaid with those that did not, it was possible to examine the merits in Medicaid versus ACA exchange plans for low-income adults. Medicaid was more effective in reducing out-of-pocket spending whereas the private ACA plans provided better physician access.
The reasons for the differences are intuitive. Medicaid uses very little cost sharing, thus providing greater financial protection for the beneficiaries, but in most states payment rates are so low that many physicians refuse to accept Medicaid patients, thus impairing access. In contrast, private ACA exchange plans use greater deductibles and other cost sharing, exposing patients to greater out-of-pocket spending, though physicians are more likely to accept patients with private insurance plans.
The authors caution against applying these results to other policy settings because of the great variability in coverage design and needs, so from this study alone we cannot say which is better, public or subsidized private insurance.
What we can say is that design is crucial. In a system designed to provide health care for everyone, design features should remove financial barriers to care and improve access through better resource planning and commitment. Well designed public plans do just that, whereas private insurance depends heavily on empowering patient-consumers to forgo beneficial care because of out-of-pocket costs, plus the only concern they have about distribution of resources is where the more lucrative areas are for them to market their plans.
Both Medicaid and ACA exchanges increased coverage, but we need to increase access and affordability, and neither did both. Rather than accepting trade-offs, we should enact a single payer national health program wherein no trade-offs in patient care are necessary. The trade-offs that do occur within the medical-industrial complex shouldn’t concern us beyond transitional issues.
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