Medical care services interplay between individual and Medicaid managed care markets in expansion versus non‐expansion states

Abstract

We study enrollment, medical service utilization, and incurred expenses of individual comprehensive and Medicaid managed care plans in states with or without Medicaid expansion adopted at the Affordable Care Act (ACA) early stage 2014–2016. To make healthcare services more accessible, 27 states expanded Medicaid eligibility to cover nearly‐poor non‐elderly adults who have had incomes between 100% and 138% of federal poverty level in 2014. In non‐expansion states, early enrollees in this income cohort had to choose individual market plans rather than Medicaid. Early enrollees' enrollment choices and their health status have had a great impact on the individual market premiums and Medicaid spending. We examined health insurers' annual regulatory filings with the National Association of Insurance Commissioners for 2013–2016 and found that: First, individual comprehensive insurance enrollment grew much faster in states not expanding Medicaid eligibility. Second, after incorporating early enrollees, per member per month (PMPM) medical service utilization and expenses of individual comprehensive insurance grew much faster in non‐expansion states. Third, among major types of medical utilization and expense measures, PMPM hospital inpatient days and PMPM prescription drug expenses increased substantially since 2014. Finally, Medicaid beneficiaries generated more PMPM medical utilization and expenses in expansion states.