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.