Dive Brief:
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States that use the federal healthcare.gov exchange rather than their own health insurance exchange have, on average, almost double the uninsured rate, according to the National Center for Health Statistics.
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Through the first six months of 2017, states that use healthcare.gov had an average uninsured rate of 16.1%. States with their own exchanges had an average rate of 8.3%.
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Part of the reason for the difference is the Affordable Care Act’s (ACA) Medicaid expansion. Almost all 12 states with state-run exchanges expanded Medicaid, which provides coverage for people with incomes up to 138% of the federal poverty level.
Dive Insight:
The percentage of uninsured Americans (9%) remained the same in the first six months of 2017 compared to 2016, with 200,000 more individuals uninsured than a year ago, according to the Centers for Disease Control and Prevention (CDC). Nearly 20 million more people have health insurance now than in 2010, when the uninsured rate stood at 16%.
States that expanded Medicaid have fewer uninsured people than those that have not expanded Medicaid. Since 2013, states that expanded Medicaid have cut their uninsured rates in half on average. States that did not expand the program have dropped the average uninsured rate by about four percentage points.
Medicaid expansion plays a part in getting more insured, but having the states run their own exchanges likely means they take more ownership than states that get coverage through the federal exchange.
The CDC numbers will please Medicaid expansion supporters, who will add the report to growing research about the positives associated with Medicaid expansion. Other studies show hospitals in expansion states have improved operating margins and reduced uncompensated care costs compared to hospitals in non-expansion states. Plus, expansion states have seen gains in population health, economic growth and employment rates. A National Bureau of Economic Research study found that access to health services in utero and during early childhood improves health outcomes for those children — and their future offspring.
Any talk of Medicaid expansion, of course, goes back to the ACA. Though the ACA has taken its share of attacks over the years, the law remains — though Republican leaders are hoping to take another crack by the end of the year. The Senate bill to overhaul the tax system currently includes repeal of the ACA’s individual mandate. Besides taking a whack at a key pillar of the ACA, the move would save $305 billion that could be used to offset tax cuts.
Those savings would come at the expense of fewer insured Americans and a smaller Medicaid population. The Congressional Budget Office and Joint Taxation Committee earlier issued an analysis that said eliminating the individual mandate would result in 15 million people losing coverage by 2026 and premium increases of about 20% because people will no longer have to pay a fine for not having insurance. That will cause healthy people to avoid insurance, which would destabilize the risk pool and cause payers to raise premiums.
However, there are also others who say removing the individual mandate penalty, which is $695 this year, won’t affect the market because the penalty is already pretty low.
If Republicans get enough support for eliminating the individual mandate, they may have to agree to pass the Alexander-Murray bill to fund cost-sharing reduction (CSR) payments to insurers in the exchanges. CSRs help pay for out-of-pocket costs for lower-income people. President Donald Trump said he will no longer make CSR payments, which resulted in payers either pulling back on the exchanges or increasing premiums. Alexander-Murray supporters say the bill will stabilize the markets for two years.