This summer, Gallup reported on comparative uninsurance rates in states implementing the Affordable Care Act. States that both expanded Medicaid and operated a state-based or partnership marketplace saw their uninsurance rates drop significantly more in the first half of 2014 compared to states that implemented only one or neither of these programs (4.0 versus 2.2 percentage points).

How much of the drop was driven by the decision to expand Medicaid? CMS reported last week that Medicaid enrollment increased by almost nine million individuals since October 1, 2013, with over 85 percent of the increase in states that expanded Medicaid. This represents a 20 percent rise in Medicaid enrollment in states that have decided to expand, compared to only a five percent bump in states that did not expand Medicaid eligibility. While the previous coverage status of the nine million Medicaid enrollees is unknown, it is likely driven by those who were previously uninsured.

Uninsurance Drops More in States with State-Based/Partnership Marketplaces

In further analyzing Gallup’s data, we found that the decision to implement a state-based or partnership marketplace may have more of an effect on decreasing uninsurance rates than the Medicaid expansion.  Our below chart illustrates that the average drop in uninsurance rates for states expanding Medicaid with a state-based or partnership exchange is nearly twice as high as the rate for states expanding Medicaid with federal marketplaces and more than double for states that did not opt for Medicaid expansion.

Uninsured-graph-condensed

Extra Marketing/Navigation Likely Played Key Role in Reducing Uninsurance

Funding from federal establishment grants to states for marketing and in-person assistance appears to be one driving difference. According to data published by the Robert Wood Johnson Foundation, states with state-based or partnership marketplaces received an average of $29 per uninsured resident in federal grant funding to support in-person enrollment assistance. States using the federal marketplace receive no direct funding for in-person assistance, though they did benefit from an average of $3 per uninsured resident in federal funding for navigators.  As Drew Altman from the Kaiser Family Foundation recently pointed out, personal assistance was key to getting many people enrolled. Plus, many were compelled to seek coverage through the intense marketing and media spotlight on Obamacare.

It is worth noting that the funding differences for navigational assistance are likely to soon grow smaller, as federal establishment grants to state-based and partnership marketplaces are scheduled to run out in the upcoming open enrollment period, after which state marketplaces must be self-sustaining. Decreased funding for enrollment assistance and marketing and less media attention may compel fewer to seek coverage.

Systems challenges notwithstanding, solid cooperation between a state marketplace and Medicaid may also have led to better connections for individuals applying to one insurance program when eligible for another. This has largely avoided the complicated account transfer process that has occurred in states with federal marketplaces. This cooperation will continue to grow in importance as marketplaces seek to become self-sustaining and finding the remaining uninsured becomes an even more challenging task.

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