In light of the concept of abolishing the private healthcare insurance industry advocated by some 2020 presidential candidates, one would expect that to impact the administration of Medicaid.

As I "think" I understand it, many states contract their Medicaid program to private healthcare insurers that then utilize (their) existing managed healthcare programs and (their) physician/hospital networks to provide coverage, provide payment to caretakers, handle claims etc.

I await being corrected.

  • Wouldn't Medicare for All abolish Medicaid even if it didn't abolish private health insurance? Even if Medicare for All had an opt-out for private health insurance (individual or employer-based), it seems unlikely that it would have an opt-out for Medicaid. As such, it doesn't seem like we'd ever get to the question of impact on Medicaid. Any solution that includes abolishing private health insurance already abolished Medicaid.
    – Brythan
    Commented Jul 3, 2019 at 9:03
  • There is always a market for the private healthcare insurance company to create insurance policies for those willing to pay for premium services, e.g. private rooms with bathroom, exotic food, entertainment system,etc
    – mootmoot
    Commented Jul 3, 2019 at 17:09
  • @Brythan- Even though there are 10 introduced bills that are some flavor of Medicare for All, and multiple candidates advocating for M4A - It's not clear what , if any, would abolish Medicaid outright. Processing of Medicaid claims are (largely) being conducted by private health insurers, moreover processing of Medicare claims is likewise being conducted by private health insurers. It seems to me that the government or "public" insurance programs are integrated with the private health insurers to such a degree that it may be impossible to abolish private health insurers
    – BobE
    Commented Jul 3, 2019 at 18:08
  • 1
    @mootmoot - I would submit that healthcare can be administered without the luxuries you describe, so I would hardly call that "heathcare insurance". OTOH, what the private Medicare Supplement programs cover is NOT luxury, but the 20% coinsurance that is a consumer liability, it would be a shame if consumers would not be able to purchase those types of private financial risk aversion plans.
    – BobE
    Commented Jul 3, 2019 at 18:23

1 Answer 1


You are correct in assuming that the majority of states implement low income Medicaid through commercial health care insurance companies.

Medicare, which is administered and run entirely by the federal government, does not use commercial health care insurance providers. If the proposed plans build on the current federal Medicare system, that would essentially eliminate the commercial health care insurance companies, by eliminating both employer funded plans and state administered Medicaid plans.

Or, if the new plans call for keeping employer funded health care, but moves Medicaid under federal administration, the current health care insurance companies would take a hit, but not a fatal one. In that scenario, one would have to wonder what the benefit to the taxpayer would be, as the federal government is not known for being proficient at controlling administrative costs.

If you are starting to think that candidates are making bold promises without knowledge of the cost or the difficulties involved... that is not without precedent in politics.

  • 1
    Actually Medicare DOES USE private healthcare insurers to operate and administer Medicare "A Medicare Administrative Contractor (MAC) is a private health care insurer that has been awarded a geographic jurisdiction to process Medicare Part A and Part B (A/B) medical claims or Durable Medical Equipment (DME) claims for Medicare Fee-For-Service (FFS) beneficiaries. CMS relies on a network of MACs to serve as the primary operational contact between the Medicare FFS program and the health care providers enrolled in the program." see next comment for source
    – BobE
    Commented Jul 4, 2019 at 14:38
  • 1
    Source: [ cms.gov/Medicare/Medicare-Contracting/… ]
    – BobE
    Commented Jul 4, 2019 at 14:40
  • "federal government is not known for being proficient at controlling administrative costs" I'd challenge the presumption that this applies to Medicare. see [ politifact.com/truth-o-meter/statements/2017/sep/20/… ] The (Medicare) trustees’ summary listed total Medicare expenditures of $678.7 billion for 2016, of which $9.2 billion was characterized as "administrative expenses." About 1.4 percent... Average (commercial) insurers’ overhead costs are about 12.4 percent, (April 2017) Annals of Internal Medicine
    – BobE
    Commented Aug 2, 2019 at 16:29
  • I accept your 1st paragraph and your last para (though not pertinent), however para 2&3 have sufficient flaws that I cannot give this a "Best Answer rating"
    – BobE
    Commented Aug 2, 2019 at 16:32

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