In defending their efforts to repeal the Affordable Care Act, Republican leaders in Congress argue that the insurance marketplaces created by the law are failing. They aren’t completely wrong.
Trouble began with faulty websites during the rollout in 2013. Since then, enrolment continues to be below expectations. Obamacare plans often have higher premiums and out-of-pocket expenses than expected. Some markets, mainly in rural areas, may not attract a single insurer in 2018. And insurers that stay are likely to impose double-digit premium increases.
The Republican plan to replace Obamacare would do little to stabilise the exchanges. But there is a better way to provide insurance to the 11 million beneficiaries of Obamacare plans: Allow them to buy into the Medicaid system. For United States President Donald Trump, “Medicaid for more” would be both good policy and good politics.
Let’s start with a political puzzle. Why has Medicaid become America’s largest health insurance programme, with more than 70 million enrollees, even though both conservatives and liberals criticise it? First, it has surprisingly strong support from hospitals and nursing homes, insurers and states, which receive federal funds to help finance care. Second, since Medicaid is administered in different ways by different states, it cannot be labelled a monolithic national programme. Third, its cost is shared among federal, state and local governments. Finally, Medicaid works: It provides access to good-quality care for low-wage Americans and more secure funding for the medical safety net.
So why does Medicaid have a bad reputation in both parties? The answer is that both conservatives and liberals buy into a series of Medicaid myths.
Many conservatives mistakenly believe Medicaid is an out-of-control entitlement and want to cap federal Medicaid spending. But Medicaid provides low-cost care to millions of America’s oldest, the most sick and most vulnerable populations. In 2013, a report by the Urban Institute demonstrated that if an average adult on Medicaid had traditional private insurance instead, the cost of care would be more than 25 per cent higher.
Another myth is that states need more freedom to develop innovative Medicaid policies. But states already have flexibility to shape their programmes, and the Trump administration could give them even more without changing the law. Indeed, nearly every state is experimenting with novel approaches to the delivery of care, benefits packages and provider payments. This means New York can pay immigrant-aid organisations to provide health screenings, while Indiana experiments with high-deductible plans and health savings accounts.
The notion that Medicaid is a “big government” programme is yet another myth. More than 60 per cent of Medicaid beneficiaries are enrolled in private managed-care plans now. Medicaid is actually a successful public-private partnership.
Some liberals have proposed using Medicare, the federal health care programme for the elderly and disabled, as the basis for providing universal health insurance. But Medicaid is the better fit. It has a more generous benefits package, is less costly and is developing more innovative care-management strategies. Moreover, the integration of the Obamacare exchanges into Medicaid would be relatively seamless: Many health plans are already there in both markets.
Of course Medicaid is not perfect. Doctors and hospitals complain about low reimbursements, beneficiaries often have trouble finding high-quality care, and the stigma of the programme as being a form of welfare persists. In reality, however, the programme is much more than that, providing care to children, seniors, the working poor and welfare recipients.
Trump has consistently argued that he will ensure decent coverage for all. He even praised the Australian system of universal coverage on the same day the House voted to replace the Affordable Care Act with a programme that would cut Medicaid by $880 billion (Dh3.23 trillion) over a decade and end the law’s extension of Medicaid coverage to more people.
Moderates in both parties recognise that the chance of success for an insurance marketplace that serves only the self-employed, part-time workers and small businesses, as Obamacare does now, is small. So why not eliminate the insurance exchanges — enabling Trump to claim he “repealed” Obamacare — while allowing exchange beneficiaries to buy into Medicaid, using tax credits to pay the premiums. Recent surveys showing that Medicaid beneficiaries are generally satisfied with their coverage, more so than their exchange counterparts, makes the case even more persuasive.
The conservative House Freedom Caucus would surely object if Trump endorsed “Medicaid for more”, but moderates on both sides of the aisle might join him. The result would be better health coverage for more Americans and a clear path towards an American version of affordable coverage for all.
— New York Times News Service
Michael S. Sparer is a professor of health policy at the Mailman School of Public Health at Columbia University.
