New Analysis: Enhanced ACA & Full Medicaid Expansion Could Lead To Lower Premiums & Coverage Gains While Preserving Choice & Competition

WASHINGTON – A new analysis by researchers at FTI Consulting reveals that proposed Affordable Care Act (ACA) enhancements, coupled with full Medicaid expansion, could lead to lower premiums and substantial coverage gains while preserving competition in the market and protecting choice for American consumers. 

In contrast, creating the public option – a new government-controlled health insurance system – could threaten private coverage and reduce choice for consumers while creating financial challenges for health care providers who could suddenly face an influx of patients on government plans with lower reimbursement rates, the analysis finds.

Key findings of FTI Consulting’s analysis, which was supported by the Partnership for America’s Health Care Future, include:

• Proposed ACA enhancements could reduce net premiums by 24 percent on average, saving consumers approximately $10.6 billion annually. 

• Proposed enhancements to the ACA could achieve significant coverage gains – upwards of five million newly insured individuals – without the creation of the public option or significant disruption to those with private coverage or the health care system writ large.  

• These changes could result in an estimated 5.08 million newly insured individuals on the exchange, reducing the national uninsured rate by 1.5 percentage points.

• Medicaid expansion, a foundational component of the ACA, remains one of the most effective ways that states can reduce their uninsured rates. If the remaining 12 states were to expand Medicaid, more than 1.76 million individuals could become newly insured, reducing the national uninsured rate by 0.5 percentage points.

• The introduction of ACA enhancements combined with Medicaid expansion could decrease the U.S. uninsured rate by 2.1 percentage points.

• In contrast, creating the public option could threaten private coverage, driving 60 million people – or 40 percent of the market – out of employer-sponsored insurance (ESI) and potentially eliminating the private exchange market entirely.

• Implementing ACA enhancements and expanding Medicaid in the 12 non-expansion states could result in comparable coverage gains among vulnerable populations compared to the public option – and do so without threatening private coverage.  

• Relative to specialized Medicaid managed care plans that prioritize care coordination and address social determinants of health, the public option may not provide the coverage necessary to meet the unique health care needs of at-risk, low-income populations. 

FTI Consulting’s analysis comes as new data from the Department of Health and Human Services (HHS) shows a significant increase in health coverage enrollment as consumers in the 36 states which use the federal marketplace benefit from significantly lower premiums and lower out-of-pocket costs under ACA enhancements in the recently passed American Rescue Plan Act (ARPA), and as similar data emerge in states that have their own health coverage marketplaces, including Colorado and Nevada.

• To read the full analysis by FTI Consulting, CLICK HERE.

• To learn more about the Partnership for America’s Health Care Future, CLICK HERE.