from Democrats plot Medicaid expansion backdoor in red states refusing program (Politico 5/29/21)

Biden’s budget calls for creating a federal public-run health insurance option in the holdout states that would offer free coverage modeled after Medicaid benefits. States that already expanded – and fund 10 percent of the program’s costs – would receive unspecified “financial incentives” to discourage them from dropping coverage. That idea would likely draw swift opposition from hospitals and health insurers, who support expanding Medicaid but oppose a public option that would eat into their profits.

Chip Kahn, president of the Federation of American Hospitals, said it would be difficult to set up a new coverage system without creating a financial imbalance between states that expanded Medicaid and those that haven’t. “The fact that all the states have not implemented the ACA Medicaid expansion means there’s inequity among eligible Americans,” said Kahn, whose group represents for-profit hospitals. “But the problem is that to try to jury-rig a solution for the states that have stayed out of ACA Medicaid would then create inequities in financing and rules between the states that have the expansion and those that don’t.”

Another idea is expanding Obamacare subsidies to allow low-income people in the non-expansion states to receive free private coverage in the law’s insurance marketplaces. Currently, people earning below the federal poverty line, or about $13,000 per year, are ineligible for Obamacare subsidies. Expanding those subsidies would be expensive since private plans cost the government much more per person than Medicaid or Medicare.

A third idea from Doggett, the Ways and Means health subcommittee chairman, would seek to circumvent state opposition by allowing counties and other local governments to expand Medicaid in a hyperlocal fashion. That would still leave large gaps in coverage and could be difficult to implement.