What would a Medicaid-For-All Program Look Like in Delaware?
As we stated in Part One, one other state has started pushing towards a Medicaid Buy-In (MBI) Program, Nevada. However, in Nevada, they are merely in the, “can we agree that this should happen” stage. As such, they have not decided on exactly what the plan would look like. They have only decided on two things. One, it would be ran by the same division of the state government that currently administers the Medicaid program; and two, that those who were granted subsidies under the ACA could use said subsidies as a means to offset some of the costs of joining the MBI program. This will allow an initial boost in people interested in joining the new program, while simultaneously putting most of the weight of paying for it on the back of the federal government. It’s possible that the MBI program in Nevada would be mostly identical to the standard Medicaid program. However, representatives have already stated that they are open to looking at alternative plans. For more information on the Nevada plan, please follow this link. Delaware could take the same route and open it up to negotiations, but first we need the task force to decide that this is an avenue worth pursuing. But for now, let’s speculate on what a Medicaid Public Option would look like.
The largest determinant of what the MBI program would look like, specifically in terms of co-payments, deductibles, services and coverages is what the cost for the consumer has to be to attract enough people. If the program was started today, the premium would likely be the full cost of the average Medicaid policy holder for both the state and federal government. This is due to the fact that the federal government, particularly with the Trump administration, will unlikely cover any additional costs for the state. As it stands right now, they are threatening to actually pull billions of dollars out of the federal portion of the health care funding for Medicaid being offered to the state. It must be noted that some of that was already set into place when the original ACA was enacted–more on that here. The full cost of Medicaid per enrollee per month is around $656. A rather high premium by most accounts. However, it’s important to take in the benefits that come along with this premium. There is zero deductible, zero co-payments for services, and no more than a $5 charge for most medications, some of which are actually free of charge. A policy of that magnitude in the private market would be far over the cost of Medicaid. However, that does not negate the fact that, even with subsidies for lower income individuals over the Medicaid cut-off, this is a price that is far too high. Now, if we find a way to retain the federal government’s portion on the MBI program, the premium would only be around $248. That’s for full benefits as described above! But that is not likely to happen.
In order to bring down this cost to what could be competitive with the private marketplace, several aspects of traditional private insurance would have to be explored. Namely deductibles, co-payments, and coverages. All the things that we have come to hate about traditional insurance. However, the reason that most people hate these out-of-pocket costs is due to the fact that they are unreasonably high, and often unachievable barring some catastrophic incident. Even after they have been reached, they still have to pay the extremely high co-payments. In the case of the MBI program, if we can bring down the cost by including a low deductible, and then add in a small co-payment for all drugs and services–just for MBI plans–you have effectively bring down the overall cost and the premiums. However, that is not the only option for bringing down the costs. One other option to explore could be a progressive pricing system. In this type of scenario, if you opt-in to the MBI program, premiums would be based off of your AGI and would come out of your paycheck pre-tax. Finally, the last way to bring down costs is to change the services covered under the plan. Currently, under the state Medicaid plan, most services are covered at 100%. This is due to the economic status of those on Medicaid. However, for the MBI program, there are several alternatives to 100% coverage for all services, and private insurance uses these alternatives to offer a variety of premium options.
It is vital to note that this is not a government mandated single-payer program, it is a public option run by the state. No one is having additional taxes levied except the people buying into the program.
The next question would be one of the most important, and unfortunately there is no way to answer it definitively at this time. Will the federal government pick up any portion of the tab for this state-run MBI program? The likely answer is no. However, the answer to this question would in effect change everything as it relates to costs to the consumer. If the federal government decides to maintain their commitment to the program in full, even for the MBI policyholders, the costs of the program would drop. Now, this may sound like a good thing, but remember that those are your tax dollars as well. The upside is that the Medicaid program is not a private for-profit program, so the government has no incentive to raise prices as you do in a supply and demand driven, private corporation. However, it is still going to take federal tax dollars to contribute if the federal government elects to do so.
In summation, the prospects over what exactly a MBI program would look like in Delaware is anyone’s guess. It could be a costly version of the current Medicaid system that thousands use every day, with great satisfaction ratings. Or, it could be a low cost version of a traditional insurance plan, with the added benefit that you are contributing to your state, instead of a CEO or investors deep pockets. Regardless of what it resembles, however, it truly could be the answer to many of the problems that plague our state’s health care situation. To find out exactly what the benefits, and even some of the downfalls could be if we implemented a MBI program in Delaware, read part three of this series.