Three Reasons Medicaid Insurers Should Participate in the ACA Marketplace

Mona Shah

If Medicaid managed care plans offer coverage to more people and in more places, it could help protect consumers from higher healthcare costs, according to a new report.

The number of insurers participating in ACA individual insurance marketplaces has decreased over time, reveals a new report from the Urban Institute, with support from the Robert Wood Johnson Foundation (RWJF). Fewer insurers often leads to higher premiums for enrollees.

Related: The Future of the ACA

“This study looks at the possibility of convincing more Medicaid insurers to participate in the marketplaces and the impact that would have on lowering marketplace premiums,” says Mona Shah, senior program officer at RWJF. “Some Medicaid insurers have found that participation in the marketplace have expanded their footprints to new states and markets.”

Key findings include:

• Among the 10 states with the lowest average benchmark premiums, all have Medicaid managed care organizations broadly offering marketplace coverage.

• Some insurers view the Medicaid program as more attractive than the ACA marketplaces because Medicaid offers plans more policy stability and clearer delineation of rules.

Generally, interviewees were in favor of Medicaid buy-in proposals, according to Shah. “These plans could allow Medicaid beneficiaries to retain continuous coverage year-round who may otherwise come on and off insurer’s Medicaid plans, as individuals’ incomes rise and fall,” she says.

Related: Top Medicaid Trends in 2019

The findings suggest that the closer Medicaid buy-in proposals hew to Medicaid program rules, the more likely that Medicaid insurers would participate in such programs, according to Shah.

There are three top reasons Medicaid insurers do not sell plans in ACA marketplaces, according to Shah:

• Marketplace plans may need to expand services to help meet the needs of Medicaid enrollees.

• Marketplace insurers may need to comply with different rules and regulations.

• Marketplace insurers may face more financial risk, because marketplace rules and conditions have changed drastically year to year.