Government subsidies for the purchase of health insurance under the Affordable Care Act have risen to the point at which per-person spending on Medicaid expansion is cheaper.

As Modern Healthcare reports, the costs of those premium subsidies have more than doubled since 2014. According to a Congressional Budget Office projection, they'll “nearly double again over the next decade.”

States are going after reinsurance waivers, it adds, as well as considering additional Medicaid expansion “through a public option to lower expenses for the people covered through the exchanges,” in which the federal government will end up on the hook for almost all the cost.

The individual market is turning out to be an expensive variation on Medicaid, according to data from the CBO and the Centers for Medicare and Medicaid, except for low-income people on bronze plans who don't get much more than catastrophic coverage since they're not eligible for cost-sharing reduction payments to help with copays and high deductibles.

According to CBO projections, the government will pay out an average of $6,300 in annual subsidies for each subsidized enrollee this year. That's expected to rise to almost $12,500 in 2028, while Medicaid only spends $4,230 per nondisabled adult, expected to rise by 5.2 percent a year to just over $7,000 per person in 2028.

CMS data indicate that there was 2 percent increase in 2015 in the government share of individual market premiums; after that, they rose 10 percent in 2016, 32 percent in 2017 45 percent this year. Since 2014, the report says, the government is paying 114 percent more in subsidies.

The CBO says that approximately 8 million people are subsidized; the report cites Deep Banerjee, who looks at the exchanges for Standard & Poor's, saying that although he hasn't done a complete analysis for 2019, he expects open enrollment next year to be approximately the same, because of the Trump administration's expansion of short-term plans and zeroing out of the penalty for the individual mandate.

Instant Insights /

Medicaid expansion cheaper than ACA subsidies

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