Here comes more evidence that expanding Medicaid under the Affordable Care Act was a really good idea.

States that opted to raise Medicaid eligibility limits in return for federal funds have seen their uninsured rates drop far more dramatically than the states that rejected the money.

But a new report suggests that expanding Medicaid lowered costs for those enrolled in ACA marketplace plans as well. A report by researchers from the Department of Health and Human Services found that marketplace plans in states that expanded Medicaid are 7 percent lower, on average, than plans in states that did not expand the program.

"These gains are on top of the direct benefits of expansion for millions of Americans who would gain coverage and on top of the economic benefits for states," said HHS Secretary Sylvia Burwell in a statement.

In nonexpansion states, a number of people who would otherwise be eligible for Medicaid instead have to enroll in marketplace plans. The study suggests that this group is less healthy on average than the overall marketplace pool, which would explain why the plans would cost slightly more.

The report was authored and promoted by the Obama administration, which will certainly invalidate its findings in the eyes of many ACA opponents, but the effect that the study describes is not particularly surprising, given what we know about health disparities by income. The nation’s poor are less healthy than those in the middle-class and the wealthy.

“It rings true with conventional wisdom,” Larry Levitt of the Kaiser Family Foundation told the New York Times.

It is not only ACA marketplace customers who take a financial hit in non-expansion states. Higher uninsured rates lead to higher rates of uncompensated care in emergency rooms, which the uninsured rely on for basic health care in many instances. Those costs are then passed on by hospitals to insurers and patients.

Instant Insights /

Medicaid expansion lowers ACA marketplace prices, HHS says

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