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.