Is There Potential for Public Plans to Reduce Premiums of Competing Insurers?

This report analyzes commercial insurers’ experiences competing in marketplaces with managed care organizations, which only offered coverage within public programs (either Medicaid only or Medicaid and Medicare) prior to ACA implementation. These managed care organizations, though not purely public options, represent a proxy for them.

The analysis finds an association between the presence of a Medicaid insurer in a rating region and competing insurers (e.g., Blue Cross Blue Shield, provider-sponsored plans, national and local commercial insurers) offering lower premiums.