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You are here: Home / Anderson On Health Insurance / Tweaking the Medicaid expansion scheme

Tweaking the Medicaid expansion scheme

by David Anderson|  April 10, 20151:52 pm| 10 Comments

This post is in: Anderson On Health Insurance

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Andrew Sprung over at Xpostfactoid and Health Insurance.org notes that the refusal of states to expand Medicaid has propped up Healthcare.gov’s enrollment numbers by 22%:

Of those, 8.8 million bought their plans on HealthCare.gov, the federal exchange serving 37 states, including almost every state under mainly Republican control. Almost two million of those QHP buyers – approximately 1.9 million, or 22 percent – would have been eligible for Medicaid if their states had not refused to expand Medicaid eligibility in accordance with the terms offered by the ACA

Almost every QHP buyer on Healthcare.gov had a declared estimated income of at least 100% of Federal Poverty Line.  A person making 138% FPL qualifies for 94% Actuarial Value insurance at 2% of family income.  A single person in their mid-30s will receive a subsidy (depending on where they live) of $2,000 to $3,000 per year.

As a small bore policy proposal, what if Democrats introduced a measure that rejiggered the federal match rate for Medicaid expansion.  For people who make less than 100% FPL, there would be no change (Feds pay everything now, and then a wind-down to 90% long term).  For people who make between 100% and 138% FPL, change the match rate to the higher of the current system or a lump sum of all premium and cost sharing assistance subsidies minus two percent of adjusted family income for people who are in this qualification bucket.

From there, states could elect to charge up to 2% of family income for Medicaid expansion, and use the new federal dollars to either continue to expand coverage or pay for hookers, blow and tax cuts to our Galtian overlords.

This policy proposal would be federal deficit neutral at worst, and it would help states with a larger pool of money as most people who are on Exchange with incomes between 100% and 138% FPL are healthier than current Medicaid membership, especially in states that did not expand as membership is limited to intense poverty or high disease burden for childless adults, but are paying a much higher cost per unit of medical services used on their Exchange policy than on Medicaid.  States like New York would use the windfall to increase benefits or expand subsidies for other populations while Kansas would cut more taxes yet again as they wait for Godot’s economic growth.

I have no moral problem of bribing the Confederate states and the Great Plains to expand Medicaid with higher net federal reimbursement.  In an ideal world, I would have Medicaid fully federalized as a countercyclical measure as demand goes up as the economy goes to shit, and we don’t want people being denied needed medical care because the states have balanced budget constraints and are engaged in pro-cyclical cutbacks nor do we want government spending to automatically decline at the worst possible time for declines.  This would be a babystep towards more rational counter-cyclical spending for Medicaid as well as increasing the size of the bribe to get a few more Republicans to count to eleven with their shoes on.

 

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Reader Interactions

10Comments

  1. 1.

    Fred Fnord

    April 10, 2015 at 2:08 pm

    I’m not sure why you think that this attempt to improve the lives of the poor while helping out red states would fare any differently at the hands of Republicans than the last twenty did?

  2. 2.

    chopper

    April 10, 2015 at 2:17 pm

    I have no moral problem of bribing the Confederate states

    they aren’t interested.

    you want to know that the most limitless, most renewable resource is out there? spite. if we can figure out a way to turn it into electricity we’re set as a species.

  3. 3.

    Snarki, child of Loki

    April 10, 2015 at 3:02 pm

    @chopper: “you want to know that the most limitless, most renewable resource is out there? spite. if we can figure out a way to turn it into electricity we’re set as a species.”

    Too bad the GOP has already weaponized it. Now, like hydrogen bombs, it’s too destructive to mess around with as a source of energy.

  4. 4.

    Epicurus

    April 10, 2015 at 3:18 pm

    But you still can’t return a suit jacket for “spite.” (Obligatory “Seinfeld” reference goes here.) In all seriousness, I was at first suspicious that this might be just another pipe dream, but once you throw ‘free money” into the mix, you just might convince some non-TP Republicans to join in. Ultimately, it’s up to the voters in these states to smarten up, and stop electing lunatics to office. Sadly, that day is still far off. Nonetheless, I applaud Mr. Mayhew’s efforts to inject rational, thoughtful discussions into the health care debate.

  5. 5.

    Jade

    April 10, 2015 at 4:00 pm

    Why don’t they allow subsidies for everyone that would qualify for Medicaid Expansion in the non expansion states. They could pick a plan on the exchange and get premium and copay subsidies.

    Why should poor people be punished for the stupid people that run their states?

  6. 6.

    Yatsuno

    April 10, 2015 at 4:13 pm

    @Jade: When the law was written it was done so with the assumption that Medicaid expansion would fill the 100-138% gap. Then the Roberts gang took their hatchets to it and the gap stayed open. It wouldn’t have been an issue without the Supreme Court hack job.

  7. 7.

    PaulW

    April 10, 2015 at 4:38 pm

    I have no moral problem of bribing the Confederate states and the Great Plains to expand Medicaid with higher net federal reimbursement.

    You could bribe them with every gold bar in Fort Knox and free vacations to every nation that doesn’t have arrest warrants for them, those SOB state Republicans will not do a thing to make Obamacare work, nor do a thing to help the poor.

  8. 8.

    Tommy

    April 10, 2015 at 5:12 pm

    @PaulW: I feel like my state is just an island of blue in a sea of red. I got MO and IN around me. IL might not be perfect, but we are trying. I will just say this time and time again. I work for myself. Via the ACA I get a better health plan for $87 less per month. More off if I took the subsidies, I don’t.

    I honestly don’t see the government working for me. In a tangible way I can feel it. Obamacare is right there in front of me. Something I feel. Something that touches my life. The Republicans have to hate this. It is working.

  9. 9.

    Eric S.

    April 10, 2015 at 5:33 pm

    @Tommy: Illinois man and self employed myself. The plans that came on the market after the ACA were superior and saved me some cash as well.

  10. 10.

    Matt McIrvin

    April 10, 2015 at 5:41 pm

    @Jade: The fix to fill the hole would take a statutory change, and the majority in Congress wants to repeal Obamacare, so they won’t even take trivial steps to fix problems with it, any more than they’d fix the sentence that is the basis of King v. Burwell.

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