Nevada, with little fanfare or notice, is inching toward a massive health insurance expansion — one that would give the state’s 2.8 million residents access to a public health insurance option.
The Nevada legislature passed a bill Friday that would allow anyone to buy into Medicaid, the public program that covers low-income Americans. It would be the first state to open the government-run program to all residents, regardless of their income or health status.
The bill is currently sitting with Nevada Gov. Brian Sandoval, a Republican. His office did not respond to an inquiry about whether he would sign the bill or veto it.
Democrats in Washington have previously proposed a similar “Medicare for all” scheme, which would open up the public program for the elderly to Americans under 65. The idea has always fizzled out, however, due to a lack of political support.
“Medicaid for all” offers an alluring alternative to those proposals. For one, Medicaid coverage generally costs less than “Medicare for all” because the program pays doctors lower rates. This might make it a more alluring option for price-sensitive consumers worried about their monthly premium.
Because states have a large role in running Medicaid, they can move these proposals forward with less involvement of the federal government. A public option program like this has always failed at the federal level. But a liberal state such as Maryland or Connecticut — or, in this case, even a more centrist state like Nevada — might explore the option unilaterally.
This could mean that the path to a public option doesn’t run through Washington, DC. Instead, it runs right through Carson City.
Nevada’s plan to create “Medicaid for all,” explained
Nevada’s bill to allow a broader Medicaid buy-in is short, running just four pages. It would allow any state resident who lacks health insurance coverage to buy into the state Medicaid program, which would sell under the name the Nevada Care Plan.
“There is no way people can be productive members of society and take care of their families if health care is a privilege and not a right,” says state Assembly member Michael Sprinkle, who introduced the measure. “That’s really where this bill started, thinking through, how do we make health care a right in our state.”
Under his bill, people who qualify for tax credits under the Affordable Care Act would be able to use those credits to buy Medicaid coverage instead. People who don’t qualify for anything would be able to use their own money to do the same. The plan would likely sell on Nevada’s health insurance marketplace, making it a public option to compete against the private health insurance plans also selling there.
The buy-in coverage would be pretty much identical to the coverage traditional Medicaid provides, although it would not cover emergency medical transportation (a benefit of the program tailored to the low-income population it traditionally serves).
Sprinkle (who told me his last name has led to some people calling the plan SprinkleCare) says they haven’t yet estimated how much enrolling in the Nevada Care Plan would cost individuals. The bill sponsors also have not determined whether buy-in Medicaid members would have a deductible or traditional copayments, which Medicaid typically does not have because of the low-income population it serves.
“Once the bill gets through the governor, we’re going to have a very active working group that will build off this framework to determine these things through regulation,” Sprinkle said.
Lots of advocates focus on “Medicare for all.” Why not “Medicaid for all”?
Democrats explored the possibility of a Medicare buy-in during the health care debate in 2009 and 2010. The buy-in option was relatively narrow, only allowing Americans over 55 to participate in the program. Those under the age threshold would still be limited to private health insurance plans.
Early versions of the Affordable Care Act included the buy-in provision. But the Senate was forced to drop the Medicare buy-in from its bill when it couldn’t get the entire caucus behind the idea. Health industries fought aggressively against the idea, which could disadvantage insurers by cutting into their market share.
In the wake of Trump’s election, health policy experts have begun to explore whether it might make more sense to build a national health care system around Medicaid rather than Medicare.
“Medicaid is the better fit,” Columbia University’s Michael Sparer recently wrote at the New York Times. It has a more generous benefits package, is less costly and is developing more innovative care-management strategies. Moreover, the integration of the Obamacare exchanges into Medicaid would be relatively seamless: Many health plans are already in both markets.
Medicaid and Medicare are similar programs in that they are publicly run and large, covering 62 million and 43 million Americans, respectively. They can use their large membership to negotiate lower prices with hospitals and doctors. Medicaid tends to have the lowest payment rates. On average, Medicaid pays 66 percent of what Medicare pays doctors.
In Nevada, Medicaid pays 81 percent of Medicare rates.
This has the advantage of keeping Medicaid a relatively low-cost program per person — but also the disadvantage of some doctors deciding not to accept Medicaid’s lower rates. A recent federal survey estimates that 68.9 percent of doctors are accepting new Medicaid patients, compared to 84.7 percent accepting new patients with private insurance.
Still, Medicaid enrollees generally report being relatively happy with their coverage. They look nearly identical to people with employer-sponsored coverage in surveys about how well they think their health plan works.
States have significant sway over how their health insurance programs work and whom they cover. Thirty-two states, for example, have historically participated in a Medicaid buy-in program that lets certain disabled Americans who don’t otherwise qualify for coverage pay to join the program.
States vary significantly in how much pregnant women can earn and still qualify for the program. Some states cover comprehensive dental benefits, while others cover nothing at all.
This variation is an opportunity for states that want to experiment with the public program by tacking on a buy-in option. If Nevada’s bill does become law, it will show other states how such a program might work — and if it works well, liberal states may be inclined to mimic the idea.
But the variation also makes it difficult to see Nevada serving as the start of a national public option. Yale University’s Jacob Hacker argues that while this option might work in a single state, trying to use Medicaid as the model for a national public option would mean people in different states would get significantly different coverage.
“If the argument is this will be a foundation for coverage for everyone, I think that’s questionable,” he says. “It’s going to be difficult to harmonize all the state efforts.”
Will the Trump administration get on board with “Medicaid for all”? Will a Republican governor?
One big obstacle for “Medicaid for all” in Nevada is getting key Republican officials on board.
Gov. Sandoval, a Republican, still hasn’t weighed in on the proposal, although Sprinkle says his staff have been involved in a working group around the bill.
“Anybody would look at this as groundbreaking and trendsetting, and that’s intriguing to a lot of people,” Sprinkle says. “The governor’s office and departments have been integral partners in the working group we’ve had, so that gives me a lot of optimism he’ll sign the bill.”
States that want to enroll new populations into their Medicaid programs typically need permission from the federal government. This means that the Trump administration — which has proposed slashing the Medicaid budget in half — would need to get on board with a significant expansion of the program.
That being said, the Nevada idea in theory shouldn’t expand federal costs. Individuals would be responsible for paying their own way onto the program, although it will likely be a challenge to set the right premium to ensure this outcome.
Again, Sprinkle is optimistic here. He says early conversations with the Center for Medicare and Medicaid Services have been positive, and he expects the administration to be receptive to the program.
As to whether other states might follow the Nevada example, that largely depends on what outcomes it has. If it increases coverage significantly at little cost to the government, state legislators elsewhere would likely take notice. But if it ends up covering few people or increasing government costs, Nevada could become a cautionary tale.
Or as Hacker put it, “When your lab blows up, nobody wants to repeat that experiment.”