David Anderson makes a valuable point about an after-effect of latter day Medicaid expansions like Virginia's -- that is, expansion following Trump's cutoff of federal reimbursement to insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated to provide to qualifying ACA marketplace enrollees.
It's this: now that insurers have to price CSR into premiums, Medicaid expansion will reduce premiums for unsubsidized enrollees by removing much of the CSR load.
Virginia — like many other states — had its insurers load the cost of providing CSR into the premiums for silver plans, which are the plans that set the local benchmark from which all premium subsidies are calculated. This led to a significant spike in silver benchmark premiums. Other plans saw significant but far lower premium increases. On average, CSR workarounds led to an extra $960 to $1,040 in premiums for silver plans.As it turns out, we know just about how many current Virginia enrollees with CSR will be eligible for Medicaid if their income doesn't change. CMS data shows that, of Virginia's 400,015 enrollees as of the end of Open Enrollment last December, 222,305 obtained CSR. Of those, 120,898 obtained the highest level of CSR, which raises the actuarial value of a silver plan from a baseline of 70% (which is what silver plans without the CSR load would price for) to 94%.
The data shows us that people who were previously eligible for an ACA health plan and will now be eligible for Medicaid under the expansion were the highest per-capita recipients of the cost-sharing reduction subsidies. As these individuals move to Medicaid expansion, the cost of funding CSR through silver premiums will decline.
