States can be laboratories of health reform.
Massachusetts and Oregon expanded insurance coverage during previous periods of federal inaction, and with solutions unlikely to come from a politically divided Washington D.C., how will states tackle the problem of health insurance becoming increasingly unaffordable and unattainable for many families?
Is there a role for the government to play a greater role in making health insurance affordable and accessible? As public support for action on health care grows, what options are available to states now?
I spoke to former Petrie-Flom Student Fellow and Medicaid policy scholar Emma Sandoe about states that have begun to explore Medicaid Buy-In policies, which allow people to purchase government backed health insurance or Medicaid-like plans.
This interview has been lightly edited. Watch a panel about these issues from our event on March 15 at Harvard Law School. Slides and more information are available here.
Alex Pearlman: What is Medicaid Buy-in and what are some examples of the different ways states are rolling out this innovation in health coverage?
Emma Sandoe: Medicaid Buy-In is a state-run health insurance option that would likely leverage the existing infrastructure of the Medicaid program in order to make state coverage available for higher income individuals, broadening the population that has access to insurance.
The plans could vary based on how each state decides to implement their program, and on who is eligible: anyone, people who make under a certain amount of income, or people who only have unaffordable health options, for some examples. Plans could also vary depending on how the option interacts with existing programs: Medicaid, or the ACA Exchange, or employer coverage. And states also have different approaches for how to pay for the plan: state funding or leveraging federal exchange funding. Medicaid Buy-In plans could look very different depending on the state that implements the program, and based on the needs of the state at that time.
So far, several states have put forward legislation to implement a Medicaid Buy-In program, and Nevada went so far as to pass legislation under the previous governor, which was vetoed. The state that is the furthest along is New Mexico, which expects to pass legislation on Medicaid Buy-In this year. The New Mexico plan would establish a state-run program for people who are unable to purchase affordable health insurance on the exchange. This includes people who do not qualify based on immigration status, or who are ineligible for coverage because of the family-glitch, or the cost of dependent coverage is not included to determine eligibility for premium tax credits, among other reasons that coverage may not be available for people.
AP: How does a Medicaid buy-in increase affordability for families or individuals who wouldn’t normally have access to Medicaid?
ES: A Medicaid Buy-In plan could increase affordability through a number of ways.
First, the plan could adopt a payment system similar to that of Medicaid, or even Medicare, which would mean that the cost of medical services would be less under this plan. While some providers may be receiving less in reimbursement, more people would have coverage, so there would be less uncompensated care.
Even if a model does not adopt payment rates more closely resembling payment rates of public programs, these plans could drive down the cost of insurance because of increased competition, which would incentivize insurers to reduce costs to compete with the public program.
The plan could also add additional regulations and requirements on plans participating in the Medicaid Buy-In. For example, there could be a limit on premium increases or amount the plan could spend on certain services, ideas which may lower the costs associated with the plan. The plan also has the backing of the state, which could enhance the stability of the program and could lower the cost, depending on how much financial contribution the state makes.
AP: How do Medicaid buy-ins compare with the state ACA exchanges? For example, how does it differ from something like the Connector?
ES: A Medicaid Buy-In can be designed to work with the exchange in a way that would enhance the role of the exchange, or the plan can be designed to fill in the gaps that are made by the current exchange infrastructure.
Medicaid Buy-In plans can be sold on or off of the exchange. If sold on the exchange, there are certain limitations that could make it more difficult for the Medicaid Buy-In plan to lower prices because it would have to meet requirements set by the exchange.
If sold off of the exchange, the plan could lower costs by not being the same risk pool as the exchange, and could amend specifics of the plan like benefits to lower costs. If sold on of the exchange, the plan would compete against other plans on the exchange and could potentially lower premiums of all plans. On the exchange, the plan may be more limited in how it could be structured and who would be eligible.
AP: In your opinion, what is the best Medicaid Buy-In plan implemented (or proposed) by a state so far?
ES: The plans coming out of New Mexico and Minnesota do a great job of assessing the health coverage needs of the state, as well as utilizing the existing resources that the state has available.
The best plans will have focused goals that make sense for the state, and will address those goals in a way that builds off of the current health coverage environment. For example, a plan that takes into consideration who would sign up for coverage and then matching those people with a program that best meets their needs will be the one that succeeds. A plan should not over-promise and under-deliver, just as it should not promise a solution to the wrong problem.
To hear more from Emma Sandoe and colleagues Heather Howard, John McCarthy, and Hon. Tony Lourey, about how states are leading the way on Medicaid Buy-In programs, join us for a lunchtime panel on March 15 at noon at Harvard Law School, moderated by Jonathan Cohn, Senior National Correspondent at HuffPost. Opening remarks will be given by Andy Slavitt, Board Chair, United States of Care; former Acting Administrator, the Centers for Medicare and Medicaid Services, U. S. Department of Health and Human Services.
Photo by Ryan Rodrick Beiler