Why Not Medicaid For All?

My Sunday column on the potential consequences of Obamacare’s botched rollout ended by sketching a scenario in which the program’s Medicaid expansion is deemed a success while its reform of the individual market leads to much-higher-than-expected costs and much-lower-than-expected participation rates. This combination would no doubt be politically helpful to the Republican Party in the short run, but (I argued) it would actually leave liberals with a fairly clear path forward: Keep pressing the Medicaid expansion on states that haven’t taken it (and look for John Kasich-style Republicans to partner with), return to the Joe Lieberman-killed idea of expanding Medicare to 55-and-overs, and basically try to further shrink the percentage of Americans who aren’t eligible for one or both of those single-payer programs. This wouldn’t amount to the full-on push for single payer that some people expect from the left if Obamacare fails or gets repealed, but it would move the U.S. toward the closest thing to single payer that we’re ever likely to get: A system in which both the late middle-aged and the lower middle class gradually get folded into government-run insurance alongside the poor, the disabled, and the aged; the individual market survives as a kind of de facto high risk pool (overpriced but technically accessible); and the employer mandate helps prop up employer-based health insurance for a shrunken but still substantial share of the population.

In this landscape, the two forms of government-run insurance would presumably converge, because the liberal vision for keeping Medicare solvent without resorting to benefit cuts tends to rely on cutting provider payments toward Medicaid levels. So while the long-term result of this approach wouldn’t be “Medicaid for All,” it would, at the very least, be “Something Like Medicaid For An Awful Lot More People.” And indeed, my colleague Paul Krugman had a post just last month on roughly this possibility — not arguing for a Medicaid expansion per se, but making the case that Medicaid demonstrates that “we can actually control costs pretty well, while maintaining a universal guarantee, by slightly reducing choice and convenience.” (His column yesterday covered some related ground as well.)