The synergy between Medicaid expansion and subsidized health insurance offered through the federal exchange system is helping more low income Americans get health insurance while also reducing the number of Americans covered via subsidized exchange insurance.

Read: PPACA reduces debt for the poor

Modern Healthcare, a medical news outlet, studied trends in health insurance purchases in the 38 states that comprise the federal exchange network. Among the nuggets unearthed by the research: People are apparently moving from exchange insurance to Medicaid in those states that chose to expand the Medicaid program as permitted under the Patient Protection and Affordable Care Act (PPACA).

The trend was most apparent in Pennsylvania and Indiana, two states that expanded Medicaid. In both states, the number of people covered by exchange insurance dropped from 2015 to 2016, while the number of those insured through Medicaid expanded.

Read: Hospitals in Medicaid expansion states see huge uninsured care drop

The publication concluded that this Medicaid/exchange tandem is, overall, helping to accomplish the PPACA’s primary objective: to provide affordable coverage to more Americans.

Much has been written about the hidden costs of “affordable” exchange insurance. To eke out a profit on exchange insurance without raising premiums too much, insurers have been cost-shifting through higher deductibles and greater out-of-pocket costs. As Medicaid expansion has rolled out amidst substantial promotion by the government, low income Americans who had coverage through the exchange dropped it in favor of the even cheaper Medicaid plans.

Larry Levitt, a senior vice president at the Kaiser Family Foundation, told Modern Healthcare that the Indiana and Pennsylvania examples show that linking the two programs is working as planned.

Read: Telehealth could help low-income families

“Expanding Medicaid will increase coverage overall, but it will actually lead to a decrease in marketplace enrollment,” he says, observing that the pressure on the 19 non-expansion states will become great enough to force them to expand Medicaid.

“Over time, once those politics fade, the amount of money available to states to cover people and fund healthcare institutions eventually will just become too enticing,” Levitt says. “If that's the case, a lot of people will shift.”

Whether the shift will improve the overall risk pool situation for exchange insurers can’t yet be predicted, he cautioned. But that shift will take the pressure off the exchange network to solve everyone’s insurance affordability problems.

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Medicaid expansion taking the pressure off insurance exchanges

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