The Line between Medicaid and Marketplace: Coverage Effects from Wisconsin's Partial Expansion

States have experimented with the income eligibility threshold between Medicaid coverage and access to subsidized Marketplace plans in an effort to increase coverage for low-income adults while meeting other state priorities, particularly a balanced budget. In 2014, Wisconsin opted against adopting an ACA Medicaid expansion, instead setting the Medicaid eligibility threshold at 100% of the poverty level-a state-funded partial expansion. Childless adults gained new eligibility, while parents and caregivers with incomes between 101-200% of poverty lost existing eligibility.

We used Wisconsin's all-payer claims database to assess health insurance gains, losses, and transitions among low-income adults affected by this partial expansion.

We found that less than one third of adults who lost Medicaid eligibility definitely took up commercial coverage, and many returned to Medicaid. Among those newly eligible for Medicaid, there was little evidence of crowd-out. Both groups experienced limited continuity of coverage. Overall, new Medicaid enrollment of childless adults was offset by coverage losses among parents and caregivers, rendering Wisconsin's overall coverage gains similar to nonexpansion states.

Wisconsin's experience demonstrates the difficulty in relying on the Marketplace to cover the near poor and suggests that full Medicaid expansion more effectively increases coverage.