We’re all incrementalists now

This is a TIE-U post associated with Jonathan Oberlander’s Political Dynamics and Policy Dilemmas (UNC’s HPM 757, Fall 2011). For other posts in this series, see the course intro.

In their 2003 paper in Health Affairs, Lawrence Brown and Michael Sparer were prescient (ungated version here). They begin,

Once upon a time, more or less everyone knew what genuine health reformmeant. Affordable universal coveragewould have the statutory shape of a European national health insurance law, or perhaps its closest American kin, Medicare. A federal enactment would create an entitlement to uniform medical benefits for all citizens, specify the funding sources that cover care thus rendered, set conditions for paying providers, and (perhaps) sketch variations on delivery arrangements. That Medicaid—a “poor people’s program,” means-tested, run by the states, replete with disparities in eligibility and payment levels and methods—might be, or point toward, a workable reform model was inconceivable. Persisting in this sentiment, many reformers await the next window of opportunity to enact the real thing.

They continue by recounting the legislative and political history of Medicare and Medicaid. In doing so, they note that Medicaid has incrementally expanded in the population it covers. In contrast, with the exception of adding coverage for individuals with ALS in 2001, eligibility rules for Medicare have not chanced since 1972 (when non-elderly disabled and ESRD-diagnosed individuals became eligible).

Ultimately, the authors suggest that an incremental approach to universal coverage is far more likely than a new national and universal program.

The succinct “lessons” are these: add groups by raising income thresholds incrementally; use federal-state matching to catalyze creative use of general revenues; experiment with managed care (and then labor to get it out of the theoretical clouds and onto firm institutional ground); try to get rates of uninsurance among children down to low single digits; try to add family coverage; seek political openings to narrow eligibility gaps; and work harder to enroll eligible people. Might one see coming into view, albeit dimly, a model of universal coverage— inelegant, impure, and replete with disparities to be sure—that may be sufficiently distinct to fit America’s stubborn exceptionalism?

Were they seeing the Affordable Care Act over the horizon? It will dramatically increase coverage, in part by building on the legacy of incremental expansion of Medicaid. Today Medicaid and CHIP cover about 60 million Americans. In 2019, they will grow to cover 82 million (source: McDonough, p. 141).  That increase is largely due to the expansion of who is eligible for Medicaid to all individuals with incomes below 133% of the federal poverty level.

Moreover, the ACA’s other publicly-subsidized coverage expansion vehicle–private, exchange based insurance–leaves a lot of discretion to states. In this federalist approach, the ACA is more Medicaid-like than Medicare-like.

Finally, even with this multi-modal expansion plan, the ACA will not end uninsurance. About 23 million nonelderly US residents are expected to be uninsured even after the ACA is fully implemented.

In contrast, Medicare, once thought of by many as the model of an American universal health insurance program, is not expanding. Ironically, for a brief period, expansion of Medicare was contemplated during development of health reform. At the end of 2009, a proposal to permit 55-64 year olds to enroll in Medicare was considered as a replacement for the public option. Senator Joe Lieberman didn’t like it, so it was dropped. Now Sen. Lieberman, among others, have proposed reducing Medicare eligibility by denying access to 65 and 66 year (or even 67) year olds. If this idea takes hold, we could see a simultaneous retrenchment of Medicare and an expansion of Medicaid.

Brown and Sparer were right. Insofar as public insurance is concerned, expansion has looked a lot more like Medicaid incrementalism than Medicare universalism.

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