No, private insurance doesn’t provide 'better coverage' than Medicaid

A Medicaid expansion — cut two years ago from Gov. Tony Evers’ first budget by the Republicans — is back on the table in his 2021-23 spending plan.

The recycled proposal from Evers, a Democrat, has garnered a predictably unenthusiastic reception from Republicans who control the state Legislature.

The expansion would lean on federal funds to expand Medicaid eligibility to people with incomes up to 138% of the Federal Poverty Level, instead of the current 100%. Wisconsin is one of 12 states that have not adopted the Medicaid expansion.

State Rep. Mark Born, R-Beaver Dam, a co-chair of the budget-writing Joint Finance Committee, made his case against Medicaid in a March 21, 2021, appearance on WKOW’s "Capital City Sunday." He called the access to one-time funding a "federal bribe … to expand that welfare program," then talked about the financial impact on the parties involved.

"We’ve got people right now covered on private insurance through the exchange here in Wisconsin, and we know that that private insurance gives them better coverage and better payments to our health systems," Born said.

The lower payments to health systems for Medicaid-covered patients have been well-documented. The reimbursements Medicaid pays to health care providers are about half what private insurers pay nationwide — though we’ll note the state has the ability to set higher reimbursement rates, if Born and other leaders felt that was a problem that should be addressed.

But the other portion of his claim is more unique. Does private insurance really provide "better coverage" to the individual than Medicaid?

Born turned to some convoluted logic to defend this claim, which experts say doesn’t hold water.

Let’s take a look.

Born’s first mistake is ignoring the uninsured.

Increasing the allowable income for Medicaid would move the cutoff for a single adult from $12,880 to $17,774. That would make about 90,000 additional Wisconsinites eligible for Medicaid.

Between one-third and one-half of that group is currently uninsured, depending on whether you go by estimates from the state Department of Health Services or the nonpartisan Kaiser Family Foundation.

So it’s wrong to dismiss Medicaid as not offering "better coverage" when there’s a large group of people who could use the program and currently have no coverage at all.

But Born is also wrong about the coverage being better.

Asked for proof of that claim, Born spokesman Tyler Clark said cost shouldn’t be considered as part of the discussion over which plans offer "better coverage" — only the number of health care providers that accept Medicaid vs. private insurance.

"Rep. Born didn’t make a statement relating to cost," Clark said in an email. "Value the Representative is talking about is what you get for a plan, and it is also undeniable that access to primary and dental care under Medicaid is less than commercial private plans. … Anything else is not relevant to fact-checking his words."

But that flies in the face of how the health insurance industry references quality of coverage. The Affordable Care Act marketplace, for example, places the various options into four tiers — bronze, silver, gold, platinum — based on the out-of-pocket costs involved. In other words, which one is better is defined by how much each costs the user.

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More importantly, the logic Clark puts forth ignores that — just like the number of available providers — cost is a critical part of access to care. A plethora of available doctors on a private insurance plan does no good if the cost of care is so high the person can’t afford to see them.

"You cannot separate those two (cost and access)," said Donna Friedsam, a distinguished researcher and health policy programs director at the University of Wisconsin Institute for Research on Poverty. "If you can’t pay for your care, that’s a huge access barrier."

The impact of that barrier is clear when comparing the states that so far have accepted and refused the Medicaid expansion. In states that expanded Medicaid, 9% of eligible low-income adults reported not getting needed medical care due to cost, while in states without the expansion 20% of that income group passed on care, according to a 2018 study from the nonpartisan Government Accountability Office.

Another 2018 study comparing those groups found states that expanded Medicaid had fewer uninsured among the people eligible, and that group also saw a drop in out-of-pocket spending. It concluded states that substitute marketplace plans for Medicaid expansion — as Wisconsin has done so far — "could lower coverage rates and increase out-of-pocket expenses for enrollees."

So, yes, cost matters. And Medicaid is undeniably cheaper.

Medicaid requires no premiums for those who would be eligible under the proposed expansion, and most people also pay little or nothing for services.

"At most you might pay a couple of bucks for a copayment, but it’s generally zero," said Joe Antos, a health care scholar with the conservative-leaning American Enterprise Institute. "In terms of just money out of pocket, it’s a better deal than any private coverage. Because all private coverage even with (Affordable Care Act) coverage and the big subsidies that have been expanded, there’s going to be a premium of some sort, there’s going to be a deductible, there’s going to be copays or coinsurance."

The point Born asserted he was trying to make is that private insurance gives a person access to more doctors than Medicaid.

Kaiser — a nonpartisan organization considered the gold standard for health care analysis — said in a 2019 explainer on Medicaid: "Rates of access to care and satisfaction with care among Medicaid enrollees are comparable to rates for people with private insurance." 

The report noted there are access gaps for psychiatrists, some specialists and dentists, but those are the same fields where access is limited throughout the system due to a shortage of providers.

Friedsam said Wisconsin is in better shape than many states in terms of Medicaid care access.

"In Wisconsin we actually have very robust participation by most physicians in the Medicaid programs," she said. "We do have a number of studies showing that Medicaid members overall do fairly comparably to other low-income, privately insured members."

A 2016 Medicaid access study from the state Department of Health Services found 87% of primary care physicians in the state participated in Medicaid, with 72% of that group seeing enough patients to be considered active. But only 37% of dentists were in Medicaid, and less than half were considered active.

It’s important to note that most private health insurance plans don’t include any dental coverage, however — those have to be purchased separately. So any dental coverage from Medicaid is an improvement over private health insurance.

Born said in an interview that "private insurance gives … better coverage" than people would get under a Medicaid expansion.

This is wrong on multiple levels.

Expanding Medicaid to people making 138% of the federal poverty level gives insurance coverage to tens of thousands of people that are currently uninsured — clearly "better coverage."

Born also asserts cost is not part of which coverage is "better," but that is not how things work. The cost of premiums, deductibles and copays are a fundamental part of everyone’s health insurance and health care decision-making, and studies show a clear connection between cost and an ability to access care.

Some specialties do have fewer options under Medicaid than private insurance, but generally speaking studies and experts say the care access is comparable between the two. And Born didn’t make a claim specific to health care access, he claimed overall coverage was better on private insurance.

We rate that claim False.