NCPA - National Center for Policy Analysis

Medical Expenses of Adults With Medicaid vs. Commercial Insurance in an HMO

October 13, 2003

States that wish to continue enrolling Medicaid recipients in health maintenance organizations may need to adopt reimbursement levels that are closer to or higher than the rates paid by the commercial population, according to a recent study.

Researchers say their findings suggest that the adult Medicaid population has a more intense need for services than the commercial population, which may be the result of higher rates of pregnancy and worse health status among the Medicaid population.

  • After adjusting for age and sex, income-eligible Medicaid-insured adults were $35 (29 percent) per month more expensive than adults with private insurance.
  • When adjusting for health status as well as age and sex, income-eligible Medicaid adults were $12 per month less costly than commercially insured adults.

These findings have significant implications for health care costs and the number of the underserved and poor that state Medicaid HMO plans may be able to cover.

Source: G. Thomas Ray et al., "Comparing the Medical Expenses of Adults with Medicaid and Commercial Insurance in a Health Maintenance Organization," Journal of Health Care for the Poor and Underserved, Summer 2003.


Browse more articles on Health Issues