Medicaid is Obamacare’s biggest success. But neither side wants to talk about it.

January 6

So far, Obamacare’s biggest success is the one that neither Democrats nor Republicans seem to want to talk about.

As of Jan. 1, more than 2 million people had signed up for insurance through the Affordable Care Act’s insurance marketplaces -- the vast majority of them in December. That’s less than the 3.3 million the administration had projected would sign up by the new year. But those projections didn’t foresee that HealthCare.gov would be an abject disaster in its first two months of life. The surge in December enrollments doesn’t make up for Obamacare’s catastrophic launch. But it shows HealthCare.gov is, at this point, working.

That’s an improvement, not a success.


(Photo by Jessica Rinaldi/Reuters)

Meanwhile, in October and November alone, more than 4 million people signed up for Medicaid coverage. This number may be millions higher when December’s totals are released.

It’s hard to say exactly how many of those Medicaid enrollments Obamacare is responsible for -- the government’s numbers don’t distinguish between people who signed up through Obamacare’s Medicaid expansion and those who entered the program through pre-existing channels. But the fact remains that Medicaid enrolled well over twice as many people as signed up for private insurance through the exchanges.

It’s “the biggest ACA success story that has not yet been told,” says Ron Pollack, head of Families USA, a nonpartisan health-care advocacy group.

And it could have been an even bigger success. Although the federal government foots 100 percent of the costs for the first three years, and 90 percent of the costs thereafter, about half the states have refused to expand Medicaid. If all states participated, more than 5 million more low-income people would be eligible.

If the point of health-care reform is covering people who need health insurance, the expansion in Medicaid coverage should be a huge win. The people qualifying for Medicaid are, on average, poorer, sicker and more desperate than the people signing up for private insurance. Instead, it’s rarely mentioned, and when it is mentioned, it often seems, somehow, not to count.

One reason for this is that the Medicaid expansion has little to do with the Obama administration’s own definition of success. It largely took the Medicaid expansion for granted. It portrayed the exchanges as Obamacare’s real contribution to the American health-care system. When journalists asked administration officials to judge Obamacare’s progress, they said to look at the number of young people signing up for Obamacare’s private insurance options.

But that raises as many questions as it answers: If expanding Medicaid is so much easier, why was the administration so intent on focusing on the exchanges -- and, for that matter, why were exchanges needed in the first place?

To Drew Altman, president of the Kaiser Family Foundation, this exposes a core reality of U.S. health-care politics. “Republicans don’t like entitlement programs, and Democrats want to portray the ACA as mostly a marketplace solution based on private insurance and not another expansion of a government program,” he said, “so neither side wants to emphasize the ACA’s success enrolling people in Medicaid even though it may be the law’s biggest achievement so far in terms of expanding coverage.”

This has left both the Obama administration and Republicans in a tight spot. The White House can’t really tout the Medicaid expansion because it’ll revive fears on the right that Obamacare is really a stealthy effort to create a single-payer health-care system, and it’ll arouse criticism on the left that the administration should have expanded Medicaid to all.

As for Republicans, they can’t admit the Medicaid expansion is going well because doing so is dangerously close to advocating a single-payer health-care system. The exchanges, marred by their troubled introduction, are also a problem as they are a Republican idea, enshrined in Rep. Paul Ryan’s health-care bill.

It’s a perverse truth of the U.S. health-care debate that the solutions that have worked both here and around the world are the only solutions the political system refuses to consider seriously.

gov health spending per person

Most developed countries use publicly provided insurance to cover all their citizens. Their health outcomes are comparable to ours, and their costs are far lower. In fact, their success -- and our failure -- managing costs has led to an incredible reality: Even after adjusting for economic size, our government spends more on health care than the governments of Japan, Australia, Norway, Britain, Spain, Italy, Canada or Switzerland. And then our private sector spends even more than that.

What’s more, there’s no reason this couldn’t work in the United States: Both Medicaid and Medicare cover their target populations at prices well below those charged by private insurers.

Yet those successes haven’t led to the creation of a single-payer health-care system. They didn’t even lead to a public option or a Medicare buy-in in the Affordable Care Act.

Instead, Democrats sought a way around the charge that the government was taking over the health-care system -- and that meant settling on a complex, untested exchange structure that’s been devilishly difficult to set up. Instead of embracing tried-and-true methods of public health-care delivery (Medicaid), they devised a mechanism that undermined confidence in the government’s ability to deliver health coverage at all.

And yet, what we’ve seen isn’t that the government has trouble delivering health insurance. It’s that it has trouble setting up multifaceted e-commerce Web sites that help people verify their eligibility for public subsidies, shop for regulated private products, and then interface with the computer systems run by dozens of insurers. Compared to all that, simply extending health insurance to people through existing programs is easy -- and, so far, the federal government has done quite a good job at it.

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