It isn’t what supporters of single-payer health care might prefer. But a Medicaid-for-all program, based on the already expansive safety-net program, might open new doors to universal coverage. And rising familiarity with the program is creating a window of opportunity.
My realization began with several conversations
Photo by Chela B. on Unsplash
First, it was a friend going through a divorce that had helped his former wife enroll in Medicaid. Then another who had quit a job and enrolled his family in Medicaid during a six-month gap while looking for work. Then a friend, a single mother, who had reached a career ceiling and decided to return to school and didn’t have a partner’s insurance to fall back on.
These were middle-class friends who had solid employer-based health insurance coverage. And they were some of the last people I expected to hear needed support from the safety net. Still, I knew that people across the U.S. were relying on Medicaid more than ever before, in part because of the pandemic. I really shouldn’t have been surprised. Medicaid was doing its job.
It also became clear to me that if these friends had coverage that wasn’t tied to their work, we could arguably reduce the disruption (and panic) that losing coverage delivers in heaps at major life transitions. The steadiness that Medicaid provided to them as a vehicle for coverage, even with its known dents and dings, delivered reliable care when friends needed it.
Medicaid has seen a recent surge in both enrollment and popularity
With nearly 91 million enrollees in 2022, Medicaid (including those covered by CHIP) is arguably the largest insurer in the nation. Medicaid covers more than one in five people, nationally. In 10 states, Medicaid covered at least one in four people; and in two of those states–Louisiana and New Mexico–it covered one in three! It touches many lives each year, and more over a lifetime. In 2018, seven in 10 Americans reported having a connection to Medicaid at some time in their life. It’s almost certainly more now.
Medicaid reaches people at each corner of life. Nearly one-fifth of Medicare enrollees were also covered by Medicaid in 2021. And, at the opposite end of the age spectrum, Medicaid paid for 42% of all births in 2020. Recently, through the American Rescue Plan of 2021, more than half of all states have chosen to extend Medicaid coverage for pregnant women to a full twelve months postpartum. Alabama and North Dakota did so just last week.
Medicaid is very popular with the public. Nearly three-quarters of Americans hold a favorable view of Medicaid. As further evidence of this, the seven most recent states to expand their Medicaid programs to more people did so through a public-driven ballot initiative process. In those states, Medicaid won the popular vote, superseding political resistance from state legislatures. South Dakota was the most recent, granting Medicaid coverage to an estimated 42,000 new people.
What could Medicaid-for-all look like?
The basics of such a program would have to include two things. First, we would need federal legislation to remove income limits placed on states regarding Medicaid eligibility. Second, the federal government would need to incentivize states to expand eligibility. The Affordable Care Act did versions of both. With the federal government offering to pay 90% of the cost (vs. the average of 56%), all but 10 states expanded Medicaid eligibility to adults without children and boosted the income threshold to as much as 138% of the poverty level.
Any rules for expansion beyond that deserve considerable debate. And the options are many. A 2017 federal proposal for a Medicaid-for-all expansion by Senator Brian Schatz (D-HI) would have allowed people to buy-in to Medicaid. Nevada’s legislature passed a similar Medicaid buy-in option that the governor vetoed over concerns it would attract people with private insurance. Yet, if we ever wanted to dismantle the uniquely odd system the U.S. adopted of tying insurance to employment, this may help do it.
States are already familiar with buy-in options, with most already offering versions for people with disabilities whose income would otherwise disqualify them. Employers might also be given an opportunity to buy into Medicaid for their employees. Versions of this were, or are, being considered in a handful of states from Massachusetts to Colorado. Other options include using ACA subsidies or state taxes to help finance any expansion.
Medicaid-for-all would offer flexibility, not uniformity
Because Medicaid is structured as a federal-state partnership, states already have considerable flexibility in how they administer their plans. Further expansion would be up to states. As Congress learned with the ACA, the U.S. Supreme Court is unlikely to allow any federally required expansion of Medicaid, regardless of how financially supportive the federal government might be.
Therefore, as with the ACA, some states would sit this out entirely. Others may pursue a partial expansion, moving toward Medicaid-for-all incrementally or never. The details of any federal Medicaid-for-all plan will matter a lot to the choices that states make. But allowing states to make these kinds of choices might be a strength that generates less political resistance than more uniform, top-down approaches, like Medicare-for-all.
Medicaid payments are low, but could that be a good thing?
Medicaid pays hospitals and clinicians less than either Medicare or private insurance. Payments to physicians are roughly 30% lower than what Medicare pays. But payments to hospitals are similar to Medicare, or slightly above it. Since states are allowed to determine their own payments rates, the story varies by state. And nothing, except state budgets, precludes a state from reimbursing providers at the levels it feels are most appropriate.
There is also consensus among policy experts that prices for medical care are too high in the U.S. Both hospital and pharmaceutical prices represent just two examples. In 2018, a heart bypass operation in the U.S. cost an average of $75,000 vs. just $39,000 in second-highest priced Sweden. And in 2021, prescription drug prices were, on average, 2.5 times higher in the U.S. than other countries. There is undeniable wiggle room for price cuts.
Expanding coverage through lower-paying Medicaid could be a bold step in fighting high prices. And there are potential repercussions, such as providers refusing to serve Medicaid patients. Doctors were indeed less likely to accept new patients with Medicaid (71%) than Medicare (85%) or private insurance (90%) in 2021, but not dramatically so. And they would be very hard pressed to step away from a program that covered such a large portion of the U.S. population.
Medicaid-for-all is an option
For all the talk about Medicare-for-all, the real potential for action might instead be around Medicaid. With the federal government now allowing Medicaid renewals to begin again starting April 1, millions are expected to lose their Medicaid coverage. Now may be the time to amplify the public frustration that is likely to ensue to help gain some legislative traction.
Medicaid-for-all would almost certainly not satisfy all of the wants of people who support single-payer insurance. It would not cover everyone. But with vast public experience now with Medicaid and very strong public support, it offers a unique path toward more universal coverage.
Gregory Stevens