Dive Brief:
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A new Urban Institute report found that a proposal for a Medicaid buy-in option linked to the Affordable Care Act exchanges, proposed by congressional Democrats, would work best in states with few payers on the exchanges, states with high exchange premiums and states that have already expanded Medicaid.
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The report, published by the Robert Wood Johnson Foundation, said the proposal would “ensure access to affordable marketplace coverage options,” and could also increase competition in exchanges and lead to lower premiums.
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However, there are differences between a Medicaid buy-in and existing Medicaid programs, including differences in populations that would be covered, benefits and cost-sharing requirements. In addition, non-Medicaid expansion states that might benefit from greater competition likely won’t be interested in the buy-in since they chose not to expand Medicaid under the ACA.
Dive Insight:
Sen. Brian Schatz (D-Hawaii) introduced the legislation this summer, with the support of a few potential 2020 presidential candidates, including fellow Democratic Sens. Kamala Harris of California and Cory Booker of New Jersey.
States with an already competitive market or that offer Medicaid managed care organizations would likely not benefit from a buy-in program. And the 19 states that haven’t expanded Medicaid will likely not approve the buy-in option for people with incomes above 138% of the federal poverty level, “especially given the potential financial exposure if a state underpriced a fee-for-service Medicaid plan,” according to the report.
The Urban Institute, which backs the health law, said a buy-in program could help states that haven’t expanded Medicaid as it would offer “additional insurance choice at reasonable premiums.” It could also help states that expanded Medicaid with few ACA payers and high premiums like Alaska, Pennsylvania, Maryland and Arizona.
Most states expanded Medicaid after the ACA allowed them to offer the public program to more income levels. The expansion led to more than 15 million people receiving coverage.
Last year, Maine voters approved Medicaid expansion, but Republican Gov. Paul LePage has refused to implement the expansion without a funding method that does not raise taxes or dip into reserves. Maine Democrats have threatened to sue if the governor blocks expansion.
Meanwhile, the remaining states without Medicaid expansion don’t have imminent plans to expand the program. The closest is Virginia. Newly elected Gov. Ralph Northam, a Democrat, supports expanding Medicaid and Democrats picked up seats in the state legislature in 2017, so there's a chance Virginia will try to expand the program.
However, other states are looking for ways go in the opposite direction. Kentucky, a Medicaid expansion state, received a waiver last week to allow the state to require Medicaid recipients to work. The waiver also allows the state to cut dental and vision coverage for adults and remove recipients above the poverty level for six months if they don’t pay premiums within 60 days. Kentucky estimates the plan will cut its Medicaid population by 100,000 recipients after five years and will save $2.4 billion.
At least 10 states are seeking similar Medicaid waivers. A Health Affairs analysis found that 11 million Medicaid enrollees would be at risk of losing coverage if the work requirement spreads to all 50 states.