Democratic senator wants Medicaid buy-in option on Affordable Care Act exchanges

Sen. Brian Schatz, D-Hawaii, wants to raise Medicaid’s payment rates to providers to the level in the Medicare program, which would be more costly but give enrollees access to more robust provider networks. (Getty/mckare)

Now that Republican attempts to lessen the scope of Medicaid have failed, one Democratic senator wants to expand the program even further.

Sen. Brian Schatz of Hawaii told Vox that he is crafting a bill that would let states opt into expanding Medicaid eligibility to include any uninsured individual who wants to buy coverage, not just those with low incomes. Those who currently have incomes too high to qualify for Medicaid would have to pay a premium to join the program, but they could use their ACA tax credits to do so.

Schatz would also raise Medicaid’s payment rates to providers to the level in the Medicare program, which would be more costly but give enrollees access to more robust provider networks.

RELATED: Is partial Medicaid expansion the next big healthcare policy issue?

Such a policy would essentially make Medicaid the “public option” on the ACA exchanges, or a government plan competing alongside private plans. That provision was nixed from the ACA in order to appease wary conservatives, but some on the left—including President Barack Obama himself—have advocated for revisiting the idea since the law’s passage.

One potential drawback is that the proposal could reduce enrollment in private individual market plans. Schatz, though, isn’t too concerned about that possibility, telling Vox that if the private market can’t survive, “then that will tell you something about the nature of the market.”

Schatz’s Medicaid buy-in idea comes at a time when the program is looking more resilient than ever. In recent months, Republicans failed to gain enough support for ACA repeal-and-replace bills that would have drastically cut Medicaid spending and rolled back Medicaid expansion.  

“It really goes to show how well Medicaid works, and when there was a real threat to the future of Medicaid, we saw people stand up and talk about how important it was for them and their families,” Hannah Katch, senior policy analyst with the left-leaning Center on Budget and Policy Priorities, told Bloomberg BNA.

Indeed, the renewed appreciation of Medicaid is vital to preserve its future, said Matt Salo, executive director of the National Association of Medicaid Directors. Now, he added, the onus is on states to enact reforms that will provide better care—and value—for beneficiaries.

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