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In the News Press Release

Medicaid Expansion Lowers Exchange Premiums, HHS Says

Publisher: Bloomberg BNA's Health Care Daily Report
August 31, 2016

Eric Fader was quoted in an article, "Medicaid Expansion Lowers Exchange Premiums, HHS Says," in Bloomberg BNA's Health Care Daily Report. The article discusses an analysis by the U.S. Department of Health and Human Services that discovered that premiums on state health insurance exchanges were roughly 7 percent lower in states that expanded their Medicaid programs compared with those that did not. Fader explained that when a state expands its Medicaid program, it removes lower-income individuals from that state’s exchange. Because lower-income people tend to need more healthcare services, shifting their care to Medicaid lowers per-capita healthcare spending for the exchange plans, which in turn can lead to lower premiums for those plans in future years. He added that exchange plan insurers might instead seek to retain the savings from reduced healthcare spending as profit, rather than lowering premiums in the coming years. "With the threatened withdrawal of several larger insurers from the marketplaces, it seems to me that it would be difficult for a state to begrudge a little extra profit for the intrepid companies that stick it out," Fader said.   


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