Private Insurance versus Medicaid: Health Outcomes for Low-Income Adults

As of summer 2018, 17 states have chosen not to expand Medicaid. However, some are considering placing a portion of or all newly eligible individuals into private insurance. Even some expansion states are considering similar changes, arguing that private plans may produce better quality at a lower cost to the state. Yet, numerous studies comparing the effects of Medicaid versus private coverage have been confounded by selection bias: people who are able to access private insurance differ from those who qualify for Medicaid in observable and unobservable ways. So there remains little evidence on how public and private coverage compare in their effects on low-income adults.

Combining claims data and income eligibility information for low-income adults in Colorado, the research team will investigate the differences in health care utilization, quality, and costs among low-income adults enrolled in Medicaid versus subsidized Marketplace coverage. The team will also test for differences by race/ethnicity, gender, and age.

It is plausible that private insurance–with broader provider networks, higher reimbursement, and market-based competition–may produce better outcomes than Medicaid. Alternatively, Medicaid may be uniquely designed to provide appropriate health care to low-income adults, who differ in significant ways from the customers typically served by commercial plans. This analysis seeks to shed light on the value of Medicaid versus other coverage types, with important implications for state expansion approaches, as well as the debate over whether to include a public option in the ACA Marketplaces.