There’s not much the Obama administration can do to persuade states to take up the already generous terms available for closing the Medicaid coverage gap, especially in an election year. But they are doing what they can to sweeten the pot. The president’s budget contained a proposal to offer three years, 100 percent federal match to states regardless of the date on which they elect to expand coverage. Unfortunately, that proposal depends on cooperation from Congress, which is in short supply. So the administration is turning to things it can do on its own. Two recent examples include guidance to states that will help them claim 100 percent federal match for services provided to people who are eligible for care through the Indian Health Service, and draw down federal reimbursement for people involved in the corrections system. Both measures would lower the cost for states the extend Medicaid coverage to all eligible groups with income below 138 percent Federal Poverty Level (FPL).

States are already taking notice. In South Dakota, one of the few states that may still decide to close the coverage gap this year, the new guidance was welcomed by the governor and increases the likelihood the state will move forward in a special session this year. And Maryland and New York—two states that have already implemented the ACA’s Medicaid provisions—are seeking additional flexibility from CMS to expedite coverage of inmates who are about to be released.

Can Consumers Shop ‘Til Health Spending Drops?

Short answer: No.

Ever since the RAND Health Insurance Experiment found that increasing cost sharing for health services reduced spending without harming health (for most people, but too often overlooked, not for all), some policymakers and analysts have been chasing the pot of health care-savings gold at the end of the rainbow. They argue the way to reduce excess health spending in the U.S. is to make sure people have more “skin in the game.” The rise in high-deductible health plans is justified largely on this ground.

Unfortunately, the strategy is deeply flawed for many reasons. First, the overall correlation between levels of out-of-pocket spending and total national health expenditures is weak to non-existent. Second, high levels of out-of-pocket spending impose the greatest burden on those who can least afford it—people with low incomes and chronic health conditions.

And, recently, a number of studies have found consumers don’t respond to out-of-pocket costs as expected. Even when armed with price information, they don’t shop effectively. Instead, they just self-ration care until they have exhausted their deductible. Just this week another study undermining the case for consumer cost-sharing was published in JAMA. Researchers found that price comparison tools, though easily available, were barely used; among those who did use them, spending did not decline.

How are out-of-pocket costs entering the political debate? Rising out-of-pocket spending is causing a significant problem for many households, but the two presumptive presidential candidates have markedly different approaches on the issue. Hillary Clinton proposes reducing cost sharing for some services and providing a new tax credit to help families deal with high out-of-pocket costs. Donald Trump’s health platform doesn’t directly speak to the issue of out-of-pocket spending, but his strategy includes an expansion of health savings accounts, which are typically paired with high-deductible plans. One hopes he would look at the evidence before doubling down on the consumer-directed health plan strategy…