Jeff Clemans is posting a very interesting set of posts on the argument that Medicaid expansion lowers the premiums for the Exchange population. The mechanism is simple; Medicaid acts as a quasi-high risk pool and vaccuums up a disproportionate number of high cost individuals. That creates a high cost Medicaid pool, and a healthy, low cost Exchange pool. However there is one line that I think needs further explanation.
Under national health reform, community rating regulations apply to purchases made on state exchanges by both individual consumers and small employers. In 2011, the health care costs of individuals getting insurance in these ways averaged $4,300 (with lower costs for the healthiest among them). By contrast, health care costs for nonelderly adults on Medicaid averaged $8,300 (even though Medicaid pays low rates to hospitals and physicians).
Non-elderly adults who are on Medicaid in 2011 fall into a couple of general populations for most states. The first population is expectant mothers, the second is chronic disease sufferers and the last group may be people who are just extremely poor (where extreme poverty is heavily correlated with poor health as there are no good choices available). Babies are absolutely adorable, but they like to put merconium meconium on the financial statements of states and insurers. An uncomplicated pregancy with a simple vaginal delivery will cost Medicaid $8,000 to $12,000; a high risk pregnancy could run ~$100,000 to $300,000 for a prolonged NICU stay. Chronic conditions mean frequent contact with providers and heavy prescription usage.
The key here is to understand case mix comparisons. A risk pool of 500 pregnant women, 100 diabetics, 75 hypertsensive, 25 traumatic brain injuries and 200 people in reaosnably decent health but are dirt poor and 100 random chronic conditions is far more medically needy than a random sample of 1,000 people who have employer sponsored group health insurance.
Just on the basis that Medicaid pays much lower reimbursement to provders for physical health services than commercial insurers, an equalized case mix comparison of Medicaid and commercial populations would show that Medicaid is much cheaper. I know that Jeff knows that, but this is a distinction we need to make in analyzing claims.
MomSense
Isn’t another factor possibly uncompensated care? If providers no longer need to jack up the prices to the insured as a way of offsetting the cost of the care they provide to the uninsured, doesn’t that lower the cost for everyone? Especially now with Medicaid reimbursing at higher Medicare rates, one hopes that providers can charge lower rates to everyone.
Sondra
Did you mean meconium? As in meconium aspiration syndrome in newborns? It is a fairly common problem which normally doesn’t cause serious problems: but can in some cases. That would account for it being added to the cost of a delivery.
Here in Florida where our medicaid program has been drastically cut back because our Gov. decided not to accept Fed. dollars, many infants with health issues have been dropped from the medicaid rolls.
Their health problems are deemed “not serious enough” to remain covered by medicaid. The families have been forced to buy coverage on one of only 3 insurance companies on the State’s exchanges: none of which provide full coverage and all of which are more expensive than they should be.
That is what happens when medicaid is not expanded per the original basis on which the ACA was formulated. Unfortunately the infants in foster care are the ones who have been dropped from the rolls, and of course they are usually the ones who are born with the most problems: because mothers were using drugs during pregnancy and/or poor or no neonatal care.
These infants have the worst odds of survival without on-going medical problems in the first place, and here in Florida where funds for Child Services are always on the chopping block, their chances of a healthy life are even worse.
In our up-coming mid-term elections there is an amendment which asks if our government should continue funding the Florida Dept.of Child Services at all. No funds means no Child Services so it’s up to voters to VOTE YES on this amendment.
In a cycle where Democrats stay home that means the criminals in Tallahassee can just X out yet another important service that the Government ought to provide.
Hopefully, this should be one more reason to motivate enough of our base to show up at the polls. For those who don’t have the energy to do that, it’s very easy to vote by mail.
Richard Mayhew
@Sondra: I was trying to make a poop joke about babies and their meconium shits