Sure, everyone's heard that several of the Democratic presidential candidates are supporting their own version of Medicare for All. But there's one thing you don't hear them say much about: the idea of "Medicaid for more."
Several states are looking into the idea of a so-called "Medicaid buy-in," in which people who are not currently eligible for Medicaid but who don't make enough money to afford private health insurance could buy into their state's Medicaid plan -- or some version of it. "It's an effort on behalf of a number of different states ... addressing the issue that even with the Affordable Care Act (ACA), even with the Medicaid expansion, there still are problems for lower- to middle-income individuals in the U.S. healthcare system," Matt Salo, executive director of the National Association of Medicaid Directors, in Washington, said in a phone interview. "Whether it's an issue of exchange plans [in which] the cost sharing is a little bit too high, or the subsidies just aren't enough, there are people who are going to need more options."
And Medicaid seems like a good vehicle for helping them, he continued. First, "there's the Medicaid benefit package, arguably the most expansive and generous benefit package of any program in the world. Also, Medicaid's cost-sharing requirements are [some] of the most generous in the country."
Provider Reimbursement Issues
On the other hand, Medicaid is known for having low provider reimbursement, and any expansion of the program beyond its current parameters likely won't include more money from the federal government to help with that, Salo pointed out. "That's what makes this challenging -- Medicaid is funded by the state and federal government in tandem, and clearly these [new recipients] would not be getting any federal money because they're not [technically] on Medicaid. You can't just say, 'We're going to allow people to buy into Medicaid' and get the federal government to pay 50%, 60%, or 70%" of the cost, he said. Getting federal help would require a waiver, which most states likely wouldn't want to pursue.
So how can states run these programs on a tight budget? "The only way to obtain a vestige of affordability for the state is that we do pay less to providers across the board," said Salo.
In addition, benefits likely would be kept on a tight leash. "So what does it mean to do a Medicaid buy-in? Which pillars of Medicaid are you replicating, or is it just semantics? Is the benefit package going to include an unrestricted drug formulary? Endless long-term care benefits? EPSDT [Early and Periodic Screening, Diagnostic, and Treatment benefit] for kids? My guess is probably 'No' to all of those things," he said.
There are three basic models that states are looking at, Patricia Boozang, MPH, a senior managing director at Manatt Health, a legal and healthcare consulting firm, explained during a webinar on the topic last year:
- Off-marketplace buy-in: This would be available to consumers not eligible for Medicaid; it would be "a state-sponsored plan that leverages either Medicaid or the state employee health plan, offered outside the ACA marketplace," she said
- On-marketplace buy-in: This would be offered on the ACA marketplace, "leveraging the Medicaid infrastructure, including the procurement infrastructure ... and looking to Medicaid managed care plans to leverage the Medicaid reimbursement structure to offer this more affordable qualified health plan model," said Boozang
- Basic health program (BHP) buy-in: "If a state has a basic health program ... it could choose to offer it to people with incomes below 200% of [the] poverty line," said Boozang. "This is an option for states who have BHP today, like New York and Minnesota ... It's taking the Basic Health Program a step further and allowing people above 200% of poverty to buy into it"
In an interview, Boozang said she was a little surprised that Democratic presidential candidates haven't been talking about Medicaid buy-ins during their campaigns. "Maybe as we get further along in the primaries and debates about healthcare, we'll hear more about deferring to states and having states craft their unique approaches to how they want to solve affordability and access issues."
Not a New Idea
The buy-in idea isn't really new, said Sara Rosenbaum, JD, professor of health law and policy at George Washington University, in Washington. "The idea of using Medicaid to create a coverage pathway for people who don't have private coverage goes back to the original Medicaid program," she said. "You could see this idea in the early '' statute -- some states tried to experiment with the medically needy program to allow people [with complex medical needs who weren't otherwise eligible for Medicaid] to pay premiums and get coverage." That idea was incorporated in a bill introduced in the early 1990s by the late Sen. John Chafee, a moderate Republican from Rhode Island.
"It makes a lot of sense because Medicaid is a much more flexible program than Medicare," she said. "It rests on general revenue financing and is not tied to premiums, so you can make changes to the Medicaid program faster. It's very hard to change Medicare because of its financial base."
Although Medicaid programs are known for their low provider reimbursement, "that's not baked into the statute," said Rosenbaum. "States can alter their payment rules ... There are some states where Medicaid is a better payer than Medicare." But even if a state raises Medicaid physician payment rates, "there are limits to how much you're going to get physicians to participate," mainly because of bureaucratic hassles related to Medicaid payment and other non-financial reasons, she added.
States at Different Stages
States interested in a buy-in program are each at different stages of action, said Jennifer Tolbert, director of state health reform at the Henry J. Kaiser Family Foundation, in Washington, in an interview. "New Mexico and Nevada are probably the farthest along. Nevada passed [buy-in] legislation in 2017, but it was vetoed by the governor. More recently, New Mexico had put forward a Medicaid buy-in proposal, and while this proposal was debated in the legislature, it wasn't officially adopted." Instead, the legislature voted to have the state's Department of Human Services develop a Medicaid buy-in plan "that would presumably be put back in front of the legislature and voted on at that point," she said.
The plan that a state develops depends on what group of people they're targeting, said Tolbert. "One proposal New Mexico put forward would have targeted people with incomes above 400% of the Federal Poverty Level -- people with coverage through the marketplace but not receiving federal subsidies. They would have paid the market premium for the cost of [their coverage]" and covered the program's overall cost that way.
"That approach does limit the number of people who would be eligible for the buy-in option," she said. "To make it more affordable for a larger number of people, you need to somehow subsidize the cost -- and you could do that with either state-only or federal dollars," with the latter coming from tax credits available through the ACA marketplaces.
Washington state , under which the state will contract with private insurers to administer what is expected to be a relatively low-cost health plan. "It's not a Medicaid buy-in but it is a public option, and they're expecting premiums to be lower in part because [it would be] tapping provider payment rates below the typical rates paid by commercial payers," Tolbert explained.
At the federal level, Sen. Brian Schatz (D-Hawaii) introduced in February a bill known as the , with a companion measure introduced in the House by Rep. Ben Luján (D-N.M.). That bill "would create a mechanism for any state interested to adopt or implement a Medicaid buy-in," said Tolbert, adding that, however, "it wouldn't create any uniformity because it would only be an option for states. You're only likely going to have a handful of states interested in this approach."