Medicare-for-All Would Eliminate Most or All of Medicaid, But No One Is Talking About It

A shorter version of this column was published in Axios on July 18.

Here are a few questions moderators could ask of candidates supporting Medicare-for-all, if they want to get a little deeper on health care.

“You support Medicare-for-all. But Medicaid, along with CHIP, covers 73 million Americans, and Medicaid is larger than either the ACA or Medicare. Would you eliminate Medicaid? If you would, do you see states playing a much smaller role in the health system in the future? Why would your plan be better than Medicaid is today?”

There has been controversy about eliminating private insurance in a Medicare-for-all plan, but there has been radio silence about eliminating Medicaid. That may be because advocates of Medicare-for-all feel that a national program covering everyone and eliminating differences in coverage between states would be better than Medicaid. But Medicaid has become a popular program, defended fiercely by Democrats when Republicans have tried to cut and change it. Its elimination would fundamentally change the roles of the federal and state governments in health, and change health insurance and health care arrangements for many of the 73 million low-income Americans on Medicaid today. It is as worthy of discussion as abandoning private coverage is, even if many are ultimately persuaded that it makes sense.

Of the leading Medicare-for-all plans, the Sanders plan keeps institutional long-term care in Medicaid, but moves the acute portion to Medicare-for-all.  By contrast, the Jayapal plan adds long-term care to Medicare and eliminates Medicaid entirely.

Under the Jayapal plan, 73 million beneficiaries would lose Medicaid or CHIP coverage and gain coverage under the new Medicare-for-all plan. Under Sanders’ plan, beneficiaries receiving institutional long-term care would remain on Medicaid for those services, but most beneficiaries would shift to the new national plan. The popular CHIP program would be replaced under both plans.

Medicaid is the single largest item in most state budgets, and states would reap huge savings under either plan, though the savings under the Sanders bill would be smaller with states still responsible for covering institutional long-term care.

The uninsured in states that have not expanded Medicaid would be big winners. But many people know Medicaid by the names their states have given to it, and are loyal to their state program and have established connections with plans and providers which they value.

The effects on safety net hospitals and clinics would vary and are hard to predict. Many are substantially dependent on their Medicaid revenues and their fates would largely hinge on where people go for care with their new coverage and how payment rates under the new Medicare-for-all plan compare to Medicaid today.

The change would all but eliminate the role of states in health coverage for low-income people.  It comes at a time when state Medicaid programs have been leaders in experimenting with delivery and payment reforms, efforts to control drug costs, and experiments aimed at addressing social causes of ill health such as poverty and poor housing. Those reforms – and the idea of states as laboratories of reform – would pretty much disappear, and the balance of federalism in health would fundamentally change. For advocates of a single national plan that’s progress; for fans of maintaining a federal-state balance that’s a big problem.

It’s likely that some governors would press successfully for a waiver authority enabling them to operate their own single payer systems or to undertake other experiments in a Medicare-for-all world.

Advocates would argue that a single mainstream national program with no cost sharing and, in theory, access to a wider range of providers, would be an improvement.  But the details of how the country’s largest health insurance program would be eliminated matter. The needs of special populations such as disabled low-income children, the homeless, and the recently incarcerated would need to be addressed. Certainly, eliminating private insurance isn’t the only issue that warrants discussion.