The Medicaid Map May Shape Marketplace Entry

The Marketplace Pulse series provides expert insights on timely policy topics related to the health insurance marketplaces. The series, authored by RWJF Senior Policy Adviser Katherine Hempstead, analyzes changes in the individual market; shifting carrier trends; nationwide insurance data; and more to help states, researchers, and policymakers better understand the pulse of the marketplace.

Millions of people are losing their jobs, and will also lose their employer sponsored health insurance coverage.

A recent study by the Urban Institute projected that 25 to 43 million workers and their families may lose their employer sponsored coverage. Many will avail themselves of the safety net created by the ACA—Medicaid (especially in the majority of states that expanded) and the individual market. Enrollment in Medicaid and marketplace plans is projected to grow by as much as 20 and 10 million, respectively, due to fallout from the employer market. Recent data suggests that Medicaid enrollment has already increased by nearly three percent. At the same time, there will be some migration between these two segments, as some current individual market enrollees may lose enough income to qualify for Medicaid. The exact outcome depends on both eligibility for coverage as well as take-up, and other factors like the potential subsidization of COBRA. The coverage impact will vary, with those states that did not expand Medicaid ending up with greater numbers of uninsured residents.

Given the expected rise in Medicaid and marketplace enrollment as well as increased churn, continuity between Medicaid and the marketplace is more important than ever. In a recent Health Affairs blog, we analyzed overlap plans, which we define as plans from a common parent carrier that offer both marketplace and Medicaid (other than long-term services and supports) in the same county. Overlap plans are currently quite common. Almost 60 percent of counties have at least one parent carrier offering plans in both the individual market and Medicaid. This tendency increases in urban areas, with the result that 80 percent of the population under 65 years lives in a county with overlap. In large metro areas, 85 percent of counties have overlap plans, compared with 52 percent of counties classified as non-metro. In expansion states, where the continuity between Medicaid and the marketplace is most important, overlap is more common. Two-thirds of counties in expansion states have at least one overlap offering, as compared with only half of counties in states that did not expand Medicaid. The analysis also showed that premiums are significantly lower in counties with overlap plans.

Competitive conditions in overlap counties vary considerably. Counties with overlap plans are more likely than others to have more than one carrier (Figure 1), but this is not always the case. In nearly one in five counties with an overlap plan, the overlapping carrier has a monopoly. In another roughly 20 percent of counties with overlap, there are only overlapping carriers in the market. About one-third (35%) of the 1,858 counties with overlap plans have more than one. In some urban counties, there are more than two. Not surprisingly, Manhattan (New York County) has the largest number—there are 6 parent carriers offering both marketplace plans and Medicaid (Centene, Anthem, Healthfirst, Emblem, MetroPlus, and United).

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