In order to address rising costs and continued uncertainty in the individual insurance market, states are beginning to explore offering alternative coverage options to residents in need of premium and cost-sharing relief. One option under consideration is a state-initiated “Medicaid buy-in” product that allows people above current Medicaid eligibility levels (i.e., 138% of the federal poverty level for most adults in expansion states) to pay a premium to receive healthcare coverage through a plan built on the state’s existing Medicaid program.
In Colorado, where average Affordable Care Act (ACA) benchmark premiums have increased 71% since 2014, advocates and stakeholders initiated an analysis to evaluate the feasibility and potential impact of a Medicaid buy-in offered outside the individual ACA market, with access to Advanced Premium Tax Credit funding under an ACA Section 1332 State Innovation Waiver. The product would be offered statewide, leverage the current Medicaid infrastructure, provide the same benefits and range of cost sharing as coverage on the state Marketplace (Connect for Health Colorado), and reimburse providers at Medicare rates.
The analysis evaluates expected premiums for the buy-in product, the impact of its introduction on existing individual market premiums and the potential for state savings under this program design. The effort was led by a coalition of Colorado health policy advocates, represented by the Colorado Center on Law and Policy, the Colorado Consumer Health Initiative, and the Bell Policy Center. Manatt Health provided the policy and technical support, and Wakely Consulting Group, LLC, conducted the analytical modeling of the proposed program design and scenario alternatives.
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