The unlikely new defenders of (at least part of) the Affordable Care Act? Opponents of Medicaid Expansion!

There are many good reasons Republicans formerly opposed to Medicaid expansion have changed their minds and worked toward bipartisan solutions to extend health care.

My colleague Jade Little and I detailed this in North Carolina where a bipartisan bill expanding Medicaid overwhelmingly passed last year with support from political pragmatists of both parties, citing the help for working poor parents and the effect on rural hospitals and rural economies.

Despite North Carolina’s Medicaid expansion, significant moves this year toward expansion in Mississippi, and 400 studies showing why expansion has positive effects, opposition continues — ten states are still refusing to expand Medicaid under the Affordable Care Act.

A new argument has surfaced and is now widely espoused by expansion opponents is that Medicaid expansion should be opposed because it results in government coverage replacing existing “private insurance.”

Incredible as it seems, proponents of this line of thinking who want to defeat the Affordable Care Act’s Medicaid expansion are actually talking about the virtues of another key component of the Affordable Care Act or “Obamacare” — i.e. the subsidized federal/state marketplaces that (due to federal subsidies) are currently offering quality health coverage at no or very little cost for low-income people from 100% federal poverty level (FPL) to 138% FPL. This is the same Affordable Care Act the Republican Congress has tried again and again to repeal for over a decade while GOP candidate Donald Trump is currently campaigning for President on a platform that includes repealing the Affordable Care Act.

To understand why this argument is so ridiculous, let’s review how the Affordable Care Act works to help people with very low incomes buy health coverage – whether they earn less than the federal poverty level in income or slightly more.

The Affordable Care Act’s health care marketplace has subsidized plans for people above the poverty level (100% FPL) and the Affordable Care Act’s Medicaid expansion covers people with incomes below 138% FPL. [This overlap in qualifying income levels wouldn’t be an issue except for the US Supreme Court’s 2012 decision that upheld the Affordable Care Act but rewrote the law to make Medicaid expansion optional for the states.]

Both these parts of the Affordable Care Act are heavily subsidized with federal dollars – the marketplace plan subsidies are entirely paid for out of federal tax dollars and the Medicaid expansion costs to states are paid for with 90% federal tax dollars. Both the marketplace and Medicaid programs in the states overwhelmingly use many of the same private managed care companies like Blue Cross and United Healthcare to serve enrollees – in fact over 40% of private insurers offering Affordable Care Act marketplace coverage also offer a Medicaid managed care plan in the same state.

So, whether a working poor person with income between 100% and 138% FPL has a subsidized marketplace plan or subsidized Medicaid expansion coverage plan, the difference is really about differences in benefits and provider reimbursements between two government programs and has nothing to do with “private insurance.” In fact, both plans are highly federal tax-dollar subsidized and regulated plans run through contracts with private health insurance companies in most states. But in the eternal search for more arguments against expanding Medicaid this fact has been turned on its head.

In Mississippi, Senate leaders skeptical of expansion did exactly that, characterizing the Affordable Care Act’s marketplace subsidized coverage for people at this low-income level as “private insurance” preferable to Medicaid:

“One reason Senate leaders give for not expanding to provide Medicaid coverage to those earning between 100% and 138% of the federal poverty level is that people who fall into that income category can obtain private insurance through another component of the ACA – the Affordable Care Act Marketplace or “exchange.” People can receive private insurance through the exchange and receive federal help to pay for the policy.”

And Mississippi’s Governor was also using his new support of one part of Obamacare to fight another part of Obamacare:

Gov. Tate Reeves was critical of the bill in a statement he posted to social media earlier in the day. “Rep. McGee keeps saying – over and over – that her bill is for working people. The truth is this: her bill… is straight Obamacare Medicaid Expansion… And – on Day 1 – 145,000 people will be moved from private insurance plans to government healthcare.”

Conservative Mississippi commentators characterized the expansion-marketplace plan changeover as loss of “private insurance” as well:

Some 140,000 people in Mississippi who currently have private health plans through the ACA exchange would be forced off those plans and onto Medicaid were expansion to pass and the Governor’s likely veto be overridden.

And conservative commentators in Florida have joined in wholeheartedly to this argument, bemoaning the loss of “private insurance” should Medicaid expand:

According to Milliman’s mid-range estimates, if Florida expands Medicaid, 2.09 million people would be added to the program by 2029. Milliman expects a crowd-out rate of 65 percent, meaning that nearly two of three new Medicaid enrollees would replace private coverage with Medicaid. According to Milliman, about 1.25 million people would replace exchange plans, and 85,000 people would replace employer plans.

If enacted, Medicaid Expansion will push more people off private insurance and onto Medicaid.

This newfound love among some conservatives of the Affordable Care Act’s popular and almost entirely federally-paid for marketplace health plans for people in the 100% FPL – 138% FPL income category is at odds with the longtime opposition to the Affordable Care Act overall among party leaders. Florida Governor Ron DeSantis said last year that he would “replace and supersede” the Affordable Care Act with “a better plan” as “Obamacare has not worked.”

So, which is it?  Should the Affordable Care Act be repealed?  Or are the highly federal-tax subsidized “private insurance plans” offered under the Affordable Care Act great coverage that is preferable to Medicaid coverage from the same companies in the same states for the same low-income residents?

In the end, if you know how the Affordable Care Act helps low-income workers afford decent health care plans this argument is just plain silly. The final ten non-expansion states should focus on bipartisan ways to get their lowest income workers covered and leave the tortured political arguments for another day.

Adam Searing is an Associate Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.