David Williams (who just celebrated his 8th anniversary of blogging!) hosted the Cavalcade of Risk this week, and it’s an excellent edition. I thought this article from Jason Shafrin at the Healthcare Economist was really interesting. Jason writes about a recent study that found that Medicaid expansion does not result in crowd-out for the private health insurance market (ie, expanding Medicaid doesn’t reduce the number of people with private health insurance). Jason suggests that one possible explanation for the findings is that Medicaid and private health insurance aren’t really true substitutes for each other. Medicaid is not as desirable as private health insurance: the reimbursement rates tend to be much lower, and thus it can be a lot harder to find a doctor who accepts Medicaid.
I would say that another possible explanation is that the population that is most likely to be impacted by Medicaid expansion is the population more likely to be uninsured prior to the Medicaid expansion. The bar graph on page 2 of this Kaiser Family Foundation document shows significantly higher numbers of uninsureds in the population that earns less than 200% of FPL, compared with the population that earns more than that amount. So it’s likely that Medicaid expansion is most likely to cover people who didn’t previously have insurance. For the reasons Jason detailed, I would agree that it’s unlikely that very many people who already have private health insurance would choose to drop their private coverage and enroll in Medicaid, unless Medicaid coverage were to become as good as private health insurance.