As we begin discussions about reducing the skyrocketing costs of our state’s Medicaid program, surely we will review options like tort reform, whether our state should continue to participate in Medicaid expansion, along with many other related issues. However, one thing we must consider is a Medicaid Buy-In program, or MBI. Other states have had Medicaid expansions in the past, via the federal 1115 Medicaid waivers, to include people who otherwise would be ineligible for the program. But thus far, only Nevada has tried to start an MBI program such as we are suggesting. This is a brief overview of our three-part series through which we examine the possibility of an MBI program.
Already on board with an MBI program in Delaware? Great! Sign our petition to show our governor, legislators, and insurance commissioner that you will fight for a public option in Delaware!
What Ails Us?
Our healthcare system is failing. No American would argue the contrary. However, exactly why our system is failing is still a topic of debate. Certainly, the ACA did not solve the problems of our nation’s healthcare system. Primarily, the fact that it is a privately-run system devised around making profit. When a huge surge of policyholders came in from subsidies and an individual mandate, the industry corrected itself by raising prices. Then, as the influx of policies built, the number of participating companies dropped. From mega-mergers to companies’ being pulled out of the marketplace entirely, the supply of policies circled the drain in the years following ACA implementation. This lack of competition had a direct effect upon the price of Delaware’s policies. In a supply and demand system, if supply decreases and demand increases prices soar. (To read more about this, please see Part 1 of our MBI Series.) So if the private marketplace failed to such a degree, what would an MBI program look like?
Let’s end the monopoly! Sign our petition today!
What Would A Medicaid Buy-In Program Like
As previously stated, so far, only Nevada has decided to consider an MBI program. If created, it could resemble the full Medicaid program, or be a mix of various aspects from Medicaid and private insurance. The largest determinant of what the program will look like is consumer cost. If an MBI program were started in Delaware today, it would carry quite a price tag—around $650 per month. However, this would include no deductibles or co-pays, and $3 pharmaceutical costs. Although, if the federal government commits to funding the MBI, as they fund traditional Medicaid, the cost would drop to about $240 per month. (Numbers based on information from https://ballotpedia.org/Medicaid_spending_in_Delaware and Delaware.gov) Unfortunately, federal MBI funding is very unlikely, considering the current administration.
Instead, to reduce costs, we have several options. First, we could include some characteristics of private insurance, but to a less significant degree—including lower deductibles, small co-payments, or slightly narrower coverage for certain services. Second, we could implement a progressive pricing system, through which your income determines your program costs. Such a pricing system could be achieved by allowing individuals in lower income brackets to use the government subsidies currently provided for private policies, for the MBI program instead. However, all of this boils down to whether or not the federal government will contribute toward the costs of an MBI program. If so, and we see a surge in policyholders buying into the program, costs spread around the risk pool and premiums drop. (To read more about what the program could look like, please see Part 2 of our MBI Series.)
Sound good? First step is to show the momentum to our representatives. That’s why we need you to sign our petition so we can hand deliver it to show that Delaware wants a public option, and that we cannot wait for the federal government to act!
What could be the possible benefits, and downfalls of a Medicaid Buy-In Program?
To examine the benefits of an MBI program, we can look at what our current system costs us—including economic implications in the job market; taxpayer costs to fund the current Medicaid program; the strain on state economies to cover the uncovered; and the lack of coverage options for consumers. An MBI program in Delaware would help save on all these costs.
In today’s employment marketplace, jobseekers flock to industries and companies offering healthcare as part of their benefit packages. Companies not offering healthcare are at a significant disadvantage. If there were an affordable option outside of employer-based healthcare systems, smaller businesses could more easily attract quality workers, even allowing them more room in wage negotiations. Furthermore, if employees received incentives to join the MBI program, such as employer-backed Health Savings Accounts (HSAs), enrollment numbers could jump even further.
Admittedly, sufficient enrollees is key to the success of any MBI program, distributing program costs across many enrollees must happen to remain solvent. Currently, Medicaid consumes about 20% of the Delaware budget, while healthcare in total constitutes about 30%. A successful MBI program must offset some of these costs. If implemented properly, by opening it up to younger and healthier people first, it would do just that. It’s worth noting that one of the biggest demographic coverage gaps between Medicaid expansion and the private insurance marketplace is, in fact, young adults over the age of 26.
Adding an MBI program would create a valuable alternative to the current monopoly found in the Delaware healthcare exchange. No more surefire way exists to guarantee exorbitant prices, than to place the full product demand on one privately-run company. By adding an MBI program, we ensure that Delawareans always have at least two choices. Republicans state that we cannot eliminate consumers’ choices, and they may be correct. Yet, when we talk about choosing healthcare, they often leave out the choice of a public option. Citizens who want the government to run their healthcare, at no expense to those who choose private insurance, should have that option.
What are the possible challenges of implementing a Delaware MBI program? We could see high initial costs as the government strives to correct for the number of program applicants. But, as previously stated, if we open the program to young and healthy people first, we mitigate some of those costs. Probably the biggest issue implementing an MBI program is the uncertainty surrounding federal funding. There is a risk that if we set up an MBI in program in Delaware, the federal government could revoke the waiver and shut down the program. Also, without any federal funding commitment, prices are difficult to gauge. (To read more about the possible benefits and challenges of implementing an MBI program, please see Part 3 of our MBI Series.)
Delaware deserves the choice, please sign and share our petition today on Facebook, Twitter, and with your friends and family!
Soon, we have to decide if healthcare is a human right or a privilege. If we declare healthcare a human right, we must ensure coverage for everyone at an affordable rate, for both the consumer and the insurers. That will, of course, necessitate significant changes to our current system. One of those changes must be creating the option of buying into a public plan. Many Republicans state that a universal healthcare system eliminates consumer choice. So let’s expand consumer choices, and allow consumers the alternative of buying into a public option. If the federal government won’t step up to the plate, let the states do it. An MBI program is one obvious solution to rising Medicaid costs in Delaware, the large consumer insurance gap, and breaking up our state’s healthcare monopoly.
If you want to get involved in pushing for a Medicaid Buy-In program for Delaware, please attend the September 7th DHSS meeting and sign our petition to look into an MBI program for Delaware: https://actionnetwork.org/petitions/please-support-a-medicaid-buy-in-program-for-delaware?source=direct_link
For More information about the meeting please visit: http://dhss.delaware.gov/dhcc/files/benchmarksummitfirst.pdf.