On June 22, the Center on Budget and Policy Priorities (CBPP) released a report projecting that the national health care reform law's expansion of Medicaid eligibility will not cause a drastic shift of low-income individuals with private insurance to Medicaid.  CBPP's report notes that states that have expanded Medicaid before have experienced limited "crowding out" of private insurance once more low-income individuals become Medicaid eligible.  The report projects that 10 to 20 percent of privately insured individuals that become Medicaid eligible in 2014 would drop their private insurance and switch to Medicaid, which CBPP asserts is well below estimates made by critics of the expansion.

From the report: Some critics claim that a large share of the insured individuals who become eligible for Medicaid will drop their existing employer or individual market coverage and instead enroll in Medicaid. This claim does not withstand scrutiny: there has been only modest substitution of public for private coverage, or “crowd-out,” in similar state-level expansions of public programs in the past.

Full report: Medicaid Expansion in Health Reform Not Likely to “Crowd Out” Private Insurance (PDF | 301.63 KB)

CBPP.  (2010).  Medicaid expansion in health reform not likely to “crowd out” private insurance.  Broaddus, M. and Angeles, J.