Medicaid Expansion, the Private Option, and Personal Responsibility Requirements

Six states—Arkansas, Indiana, Iowa, Michigan, New Hampshire and Pennsylvania—have expanded coverage to hundreds of thousands of uninsured residents by developing their own approaches to the Medicaid expansion contained in the Affordable Care Act (ACA).

The Issue

Researchers analyze these plans and investigate the pros and cons of borrowing tactics from commercial and employer insurance models, such as placing beneficiaries in private insurance plans in the ACA marketplaces, charging premiums, creating accounts similar to health savings accounts, and creating incentives for Medicaid enrollees to engage in healthy behaviors.

Key Findings

  • Enrolling Medicaid beneficiaries in marketplace plans may not be advantageous in every state, but it has the potential to increase competition in the ACA marketplaces, thus leading to lower premiums for all enrollees.

  • However, the authors question whether charging premiums and creating health savings accounts are cost-effective and will work effectively in a program designed for low-income populations.


Implementing these alternative strategies was only viable way to expand coverage to the poorest adults in those states.

About the Grantee

The Urban Institute (nonprofit) is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. For more information specific to the Urban Institute’s Health Policy Center, its staff, and its recent research, visit