Report: Medicaid Expansion Will Impact Private Rates

According to a nonpartisan group of professional actuaries, the proposed Medicaid expansion under the Patient Protection and Affordable Care Act might have a financial impact upon private healthcare plans in states that do not adopt the expansion. In September, the American Academy of Actuaries, a group of 17,000 actuaries who provide financial and risk management advice, issued a report stating that those states which do not adopt the expansions may end up costing private healthcare payers more money.

The report states that market premiums in those states which do not expand Medicaid could increase because of the different health statuses of new enrollees. Also, premiums associated with healthcare exchange plans could also increase, and employers might be at greater risk of incurring penalties in states without the expanded Medicaid coverage.

The report follows the Supreme Court’s decision from earlier this year which upheld the Affordable Care Act while at the same time declaring that its Medicaid expansion provisions are unconstitutional. The law would have required each state to participate in the expansion or face penalties. However, the court declared that such a penalty provision was unconstitutional, so states will have to decide individually if the expansion of Medicaid is something they want to do.

The American Academy of Actuaries is a professional organization which establishes standards for qualification, professionalism and practice for actuaries throughout the country. It issued its report as part of its ongoing efforts to provide nonpartisan information to the public and policymakers.