Medicaid Costs Less than Private Insurance

Posted by: Teaway Zehyoue Collins

According to a recent report from the Center on Budget and Policy Priorities, Medicaid costs less and offers more benefits than private insurance companies. For example, Medicaid costs 27 percent less for children and 20 percent less for adults than the same benefits provided by private insurance. In addition, Medicaid offers Early Periodic Screening, Diagnostic, and Treatment (EPSDT), a comprehensive pediatric benefit that ensures low-income children receive preventive medical screening and treatment for health problems they are found to have. This comprehensive pediatric coverage EPSDT is not provided by private insurance.

The Louisiana’s Medicaid program is one of the most efficiently run programs in the United States with administrative costs under the current fee-for-service system totaling 3 percent, which is the fourth lowest in the country. The Jindal administration is proposing changing the Louisiana’s Medicaid program from the current fee-for-service to Coordinated Care Networks (CCN), which would allow private insurance companies to manage the preventive and primary-care of Louisiana’s 1.2 million Medicaid recipients. The CCN plan would allow private insurers to charge up to 15 percent for administrative services and profit, private insurance companies would receive up $330 million to run Louisiana’s Medicaid program that otherwise would have gone into providing services to Medicaid recipients. Because, Louisiana’s Medicaid is a complex system, changes to the system must be done carefully and transparently in order to ensure that low-income people receive adequate care like other residents of Louisiana.

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