Grasping For The Middle Ground On Obamacare

Joel Hay, a professor at the University of Southern California, describes his political views as “conservative, free market.” But in a counterintuitive twist, his proposal to fix the Affordable Care Act would expand the largest source of public health coverage in the country: Medicaid.

Hay, who specializes in health policy and economics, envisions an Obamacare replacement plan that would scrap health insurance exchanges such as Covered California, which sell subsidized private market plans.

Instead, he would allow people under the age of 65 to buy into Medicaid, called Medi-Cal in California. Their premiums would be based on family income and a surcharge would be assessed on those who are uninsured at the time they apply. That would be intended as an incentive to keep them from buying insurance only when they’re sick. People could acquire coverage regardless of preexisting conditions.

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Under Obamacare, 31 states and the District of Columbia expanded Medicaid, the federal-state health care program for people with low incomes. In doing so, they added more than 11 million people to the rolls, including about 3.7 million in California.

Hay believes the Medicaid expansion was the most successful part of the ACA and contends that the health insurance exchanges have struggled to provide affordable plans with adequate networks in many states.

He said expanding Medicaid further could achieve two important goals: slowing the growing costs of health care, which he said is better achieved by Medicaid than private market plans, and giving all Americans access to at least basic health coverage.

Scrapping the exchanges may not be an easy sell in the Golden State, where Covered California has been lauded as a national model.

Laurel Lucia, director of the health care program at the UC Berkeley Center for Labor Research and Education, agrees with Hay that the Medicaid expansion has been a success, but she wonders whether middle class consumers will enroll in Medicaid as readily as private market plans.

California Healthline recently interviewed Hay about his proposal, and Lucia for a contrasting point of view. Their comments, below, have been edited for clarity and length.

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