Medicaid Expansion or Marketplace Exchange: Which Offers Greater Savings?

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Medicaid Expansion, Marketplace Exchange
Medicaid Expansion, Marketplace Exchange

(HealthDay News) — Medicaid expansion is associated with greater reductions in out-of-pocket spending for previously uninsured low-income adults than Marketplace exchange coverage with premium tax credits and generous benefits, according to a report published in the January issue of Health Affairs.

Steven C. Hill, PhD, from the Agency for Healthcare Research and Quality in Rockville, MD, compared the out-of-pocket spending for care and premiums for families of adults in two simulated scenarios: obtaining coverage through a Marketplace silver plan with subsidized cost sharing and enrolling in expanded Medicaid.

Hill notes that Medicaid would more than halve the average annual out-of-pocket spending compared with Marketplace coverage ($938 vs. $1,948). Medicaid coverage would also reduce the percentage of adults in families with out-of-pocket expenses exceeding 10% of income (6.0 vs. 17.1%) or 20% of income (0.9 vs. 3.7%). For families with smokers, who under Medicaid would not be subject to Marketplace tobacco user surcharges, the reductions would be larger.

"Medicaid expansion may offer a greater opportunity than access to Marketplace insurance to promote the financial well-being of previously uninsured low-income adults," Hill writes.

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