[Vision2020] Partial Medicaid Expansion Hurts the Middle Class

[Ron Force]

David Anderson, an expert on health insurance explains why partial Medicaid
expansion, as proposed by the majority party in the legislature, will raise
health care costs for middle-class Idahoans:

https://www.balloon-juice.com/2019/03/22/idaho-partial-medicaid-expansion-and-the-400-fplers/

Medicaid is primarily health insurance for poor people or very sick people.

Idaho’s legislature is monkeying around with the voter approved straight-up
Medicaid expansion to 138% of the Federal Poverty Level (FPL)...

...This will harm middle class Idaho families who need community rated,
guaranteed issue insurance from the individual market.

How does that work if Medicaid is health insurance for poor people?

Cost Sharing Reduction (CSR) work-arounds of Silverloading and differential
morbidity matter.

Adrianna MacIntyre and I argued in a Health Affairs blog
<https://www.healthaffairs.org/do/10.1377/hblog20190212.230279/full/>that
full expansion has two paths to decreasing premiums for people earning over
400% FPL that are not available if a state elects and receives a waiver for
a partial expansion to only 100% FPL.

 evidence found that Medicaid expansion improved the risk pool of state
individual markets, suggesting that the population between 100 and 138
percent FPL is sicker and more expensive, on average, than other exchange
enrollees. Insuring this cohort through Medicaid is associated with a seven
<https://collections.nlm.nih.gov/catalog/nlm:nlmuid-101704401-pdf> to eleven
percentage point
<https://onlinelibrary.wiley.com/doi/full/10.1002/hec.3809> decrease
in individual market premiums. …

household incomes between 100 percent and 150 percent FPL, those that would
be eligible for 94 percent AV silver plans.  This income bracket overlaps
the Medicaid expansion income group significantly.  States that fully
expand Medicaid end up with far fewer people in the most generous CSR
bucket, as they have moved the 100-138 percent population to Medicaid

CSR 94 Enrollment by all APTC receiving enrollees 2018 Healthcare.gov

Keeping a cohort that is more expensive than the rest of the ACA individual
market risk pool in the risk pool raises premiums. Pulling the 100-138%
population out of the ACA risk pool lowers market premiums as long as this
group is more expensive than average. Furthermore while Idaho has engaged
in the Silver Switcheroo, Silverloading increases premiums for folks who
want a Silver plan and buy it on Exchange either because they don’t know if
they will be just over or just under the subsidy cut-off point of 400% FPL
or they can’t access an off-Exchange plan that meets their requirements.

Full Medicaid expansion reduces the premium pain of the middle class.
Partial expansion continues the pricing pain for the middle class.
Ron Force
Moscow Idaho USA
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