Public Exchange Coverage is More Costly and Less Effective than Medicaid

May 15, 2018
public exchange medicaid

First implemented in 2014 as a cornerstone of the Affordable Care Act (ACA), public exchanges sought to provide subsidized coverage to Americans who were not eligible for Medicaid.  A new UnitedHealth Group research report reveals that public exchange coverage has proven to be significantly more costly and less effective than Medicaid. Following are key findings from the report:

Public exchange coverage is more costly than Medicaid coverage.

  • Medicaid coverage costs 43 percent less than public exchange coverage, which is less affordable for the federal government and consumers.

Medicaid has expanded access to care by delivering affordable, stable, and sustainable coverage.

  • Since 2013, more than 16 million additional people have enrolled in Medicaid.

Public exchanges have proven to be less effective at increasing coverage.

  • Each year from 2012 through 2015, the Congressional Budget Office (CBO) projected that by 2017 there would be at least 25 million enrollees in the public exchanges. However, 2017 enrollment of 10 million people represents just 40 percent of the CBO’s projection.

Public exchange coverage remains unstable, having declined each year since 2014.

  • Of the 12.7 million people who signed up for public exchange coverage during the 2016 open enrollment period, 3.6 million (28 percent) fewer had coverage at the end of the year.