In Morning Consult, I argue that Virginia’s Medicaid expansion will obviously help the folks who directly qualify for Medicaid. It will also help the folks who earn too much money to qualify for ACA subsidies in two ways:
There are two ways that Medicaid expansion in Virginia will drive down individual market rates that non-subsidized, middle-class families pay…. Evidence shows that individuals who earn between 100 percent and 138 percent of the federal poverty level (single individuals earning between $25,100 and $34,638) and currently buy ACA insurance have more chronic conditions and more expensive health care needs than individuals who earn over 138 percent FPL….
Virginia — like many other states — had its insurers load the cost of providing CSR into the premiums for silver plans, which are the plans that set the local benchmark from which all premium subsidies are calculated. This led to a significant spike in silver benchmark premiums. Other plans saw significant but far lower premium increases. On average, CSR workarounds led to an extra $960 to $1,040 in premiums for silver plans.
The data shows us that people who were previously eligible for an ACA health plan and will now be eligible for Medicaid under the expansion were the highest per-capita recipients of the cost-sharing reduction subsidies. As these individuals move to Medicaid expansion, the cost of funding CSR through silver premiums will decline…
I am expecting the initial rate requests for Virginia and Maine to decrease as the combination of a morbidity adjustment and backing out a significant part of the CSR bump will need to happen as Medicaid expands for the 2019 plan year.
The corollary to this good news is that the people who currently benefit from Silver Loading, who primarily earn between 200-400% FPL are going to be a bit worse off than they would have been with no Medicaid expansion. The reduced Silver Load will make the least expensive Gold plans slightly more expensive relative to the Silver benchmark than they had been in the past.
Everything is a trade-off in health policy, but this is, I think, a very worthwhile trade-off as there is still a decent size Silver Load which will reduce post-subsidy Gold and Bronze premiums compared to the universe where James Comey actually followed FBI procedure.
Fake Irishman
Glad to see you getting this out there. (Sen. Collins and Rep Polquin, take note!)
I recall Charles Gaba did an analysis like this on expansion and non-expansion states a few years ago and came to a similar conclusion. Nice to see the trend has held up, and nice twist including the post-CSR fallout.
(One small typo, the poverty limits you cite are for a family of four, not for an individual, right?)
David Anderson
@Fake Irishman: let me check on the FPLs
Hk
For readers who care about their health, try veganism!
Check out this website to find more :
https://cruelty-free-lifestyle.org
Anthony Cooper
Well, middle class health care providers need customers, too.
Lee
I’ve got a related question.
With Medicaid expansion do we see movement from using the ER as their primary care physician to using an actual GP? If so, wouldn’t this also help drive down costs all through that market?
I’ve actually used your posts to help convince several people in RL about how Obamacare is actually a good thing. It’s a sure sign when they stop calling it Obamacare and start calling it the ACA.
David Anderson
@Lee: Depending on the level of previous insurance coverage, ER utilization goes down (Mass experience) or goes up (Oregon experience)
http://www.nber.org/papers/w24647
Elizabelle
Thank you David. Big topic for me. Yea Virginia (finally).
And a shout out to the marvelous Terry McAuliffe, who really tried. We voters are in the process of doing something about the awful conservatives in the state legislature.
ProfDamatu
Very glad for the Medicaid expansion, but I have to quibble with one point – Virginia is not a totally silver-loaded state! I realize those of us out in the “boonies” (e.g., Harrisonburg, Charlottesville) are few in number compared to the masses in NoVA /DC suburbs and thus fall through the cracks of the discussion, but I can tell you that at least one insurer, Optima (which has a monopoly in many counties), broad-loaded, which made things dramatically worse for people making over 400% FPL, as they had no reasonably priced Bronze/Gold options available for purchase. I know that in my area, the cheapest Bronze offered for me (42, non-smoker) would have been about $650/mo without subsidy (over twice what the pre-CSR shenanigans rate was). I’d like to think that the Medicaid expansion will help folks in this area, but I’m skeptical; even a 20% reduction in rates would still leave us with exorbitant premiums. I recall seeing somewhere that Optima’s initial rate request was for a small decrease, which prompted a bitter laugh from me – no shit, you can afford to ask for a decrease, after more than doubling premiums for 2018 in some counties!
Also – I think those FPL numbers quoted in the post are indeed for a family of four – I mean, if they were for a single person, I’d have gotten some CSR help a couple of years ago, lol! I did a little checking for curiosity’s sake, and my read of the info on VA government websites is that Medicaid was already available to people making up to like 130% of FPL, but other rules made it almost impossible to qualify, especially if you didn’t have kids.