Prior research comparing public and private health insurance has suggested that having Medicaid could result in decreased access to care and worse health outcomes compared to Marketplace coverage, which provides health insurance policies that may be subsidized by the federal government, depending on income and family size. Many of these studies have been unable to rigorously account for underlying differences, particularly related to income, between enrollees with public and versus private coverage. In an article recently published in JAMA Network Open, Heidi Allen, Sarah H. Gordon, Dennis Lee, Aditi Bhanja and Benjamin D. Sommers use data from Colorado to compare individuals with similar incomes across coverage types, highlighting the key differences between Medicaid and Marketplace insurance.


Using detailed income data linked with Medicaid and Marketplace claims data from Colorado, the research team examined a matched sample of adults enrolled in either Medicaid or Marketplace plans in 2014-2015, with incomes narrowly above and below 138% of the federal poverty level, the eligibility cutoff between the two programs. They examined a wide range of outcomes related to utilization, cost and quality and found:

  • Medicaid coverage was substantially less costly to beneficiaries and society than private coverage. Total costs were 83% higher in Marketplace coverage, due to much higher prices for the same services in the Marketplace compared with Medicaid. Marketplace coverage was also associated with 10-fold higher out-of-pocket costs for low-income enrollees than Medicaid.
  • Marketplace coverage was associated with fewer emergency department visits and more office visits than Medicaid. Almost 30% of the emergency department visits under Medicaid were in the first month of coverage, suggesting the emergency department visit triggered Medicaid enrollment which would retroactively cover that visit.  
  • Results were mixed on quality of care, with some outcomes favoring private coverage, but with more than half of the measures showing no significant differences between Medicaid and Marketplace coverage.

Implications for Policy and Practice

Overall, this study suggests some access advantage for people with private Marketplace coverage, but at much greater costs to society and enrollees. As more states opt to expand Medicaid under the Affordable Care Act, it’s important to understanding the differences in use, costs and quality between public and private coverage. State policymakers can use this information to improve health outcomes for both coverage populations. At the federal level, as debates surrounding options for Medicaid buy-in, Medicare-for-all or a zero-premium Marketplace plan continue, it is imperative to recognize that Medicaid and Marketplace coverage differ in important ways.