Medicaid De-Privatization
State Campaigns — A Report and How-To, from Our National Coordinator (April 2026) 

The following was adapted from a March 2026 speech that Rose Roach, National Coordinator for the Labor Campaign for Single Payer, gave to the Minnesota AFL-CIO.

In July 2025, President Trump signed HR1 into law, which inflicts a trillion dollars of federal cuts to our nation’s lifesaving state-based Medicaid programs. In addition, Congress allowed the advanced premium tax credits — available to those who purchase their health insurance on the Affordable Care Act (ACA) exchanges — to expire at the end of 2025. In the U.S. we have a healthcare marketplace, so these changes to Medicaid and the ACA exchanges impact all of us.

Although most union members get access to health insurance through an employer-based system, a direct impact to the unionized workforce has come in the form of exorbitant health insurance premiums; some of the highest we’ve seen in more than two decades. Retirees are suffering from Medicare Advantage plans (privatized, for-profit insurance) closing shop or increasing premiums while cutting benefits, with those on a Medicare supplemental or Medigap plan experiencing hefty premium increases as well. 

What is to be done? Is it possible to counteract the health insurance companies driving these negative impacts for those on Medicaid — are there other approaches to mitigating this harm? State legislatures have several options to consider:

1. cut eligibility – unacceptable; or

2. cut benefits – unacceptable; or

3. cut (already low) reimbursements to providers – unacceptable; or

4. cost-shift from other necessary programs, i.e., take from public education or public transportation – unacceptable; or

5. raise taxes – this would be fine, as long as the increased taxes are on billionaires and corporations… those who experienced a windfall under HR1; or

6. remove the health insurance companies often called “managed care organizations” (MCOs) — which hoard public dollars to create either high profits or excessive insurance company reserves for “non-profit” insurers — and use the savings for direct patient care. 

The last is the most strategic and effective choice: it’s a win/win because it uses money already earmarked for healthcare to be reallocated to direct care. Connecticut removed MCOs from their public Medicaid program in 2013, and have saved 14% in administrative overhead that they put back into the program: to improve primary care provider reimbursement rates, expand the number of physicians and clinics who take Medicaid patients, and improve on quality measures, particularly for cancer patients. 

Using this precedent as a model, other states could eliminate private insurers in public Medicaid programs, and create a direct provider payment system which would:

• Pay providers (clinics, doctors, hospitals) directly for the care they deliver to patients, eliminating the use of a MCOs as a middleman. 

• Pay primary care providers a fee for coordinating care. MCOs proclaim that they are coordinating care and we would somehow lose this if we removed them… which is absurd. A public state health program can absolutely oversee care coordination under a direct payment model. After all, managed care organizations don’t manage care, they manage money — it is our healthcare professionals who manage our care.

• Seek collaboration with community clinics for outreach to people who are not currently receiving the care they need. 

• Ensure continuity of care by monitoring enrollees or re-enrollees in relation to the new work and qualification requirements per HR1.

• Prevent fraud by eliminating the bureaucratic complexity of MCOs, where a severe lack of accountability and transparency has existed for decades.

Moving to a direct provider payment system also means:

• Saving money, which can be used to deliver better care to patients. The scope of savings is significant: according to a national Medicaid report, private insurers within Medicaid programs waste 10-17% of the tax dollars they receive on unnecessary administrative overhead and bureaucracy. https://pnhp.org/removing-the-middlemen-from-medicaid/ 

• Stopping MCOs / private health plans from interfering with care and denying treatment to Medicaid patients.

• Doing away with MCOs’ limited networks. These existing networks increase already serious health inequities, adding challenges to people seeking care. This is especially true for dental and mental health care, and particularly in low income and rural communities, where people have difficulty accessing care, even with providers being “in” network. 

• And finally, once savings are realized, states could look to raise provider payment rates to Medicare levels. Medicaid reimbursement rates are far too low, so increasing those rates will help shore up clinics and hospitals with a higher number of Medicaid patients, which in turn can help with stretched budgets — particularly in rural and high-needs urban/suburban communities.

The sense of urgency is real with Minnesota, Illinois, Wisconsin, Indiana, Maryland, New York, West Virginia, Missouri, Ohio, Hawaii, Washington, and Iowa all starting campaigns to de-privatize their Medicaid programs.

Eliminating private insurers from public health programs takes healthcare decisions out of the hands of insurance companies and puts it into the hands of patients and their providers, where it belongs.

Labor has a stake in this anti-privatization fight, because corporatized healthcare is harming all of us: starting with our healthcare union siblings, working grossly understaffed while layoffs continue, which only worsens the crisis. 

The Medicaid cuts impact workers: over 90% of Medicaid adults are either working or meet traditional work exemption criteria, including those not working due to caregiving, school, and/or a disability. Working Medicaid enrollees are most likely to work in health care, social assistance, retail, and hospitality. They are part of the working class who will experience a direct hit to their access to care. 

Eliminating MCOs from public Medicaid programs is the best way we have for keeping our rural hospitals and clinics open, which provide jobs for a large segment of the population in the communities those facilities operate in. Plus, removing the private insurers from our public health programs creates good, public employee union jobs.

Negotiating health benefits continues to be a sticking point as unions are constantly faced with the choice of wages or “affordable” health insurance, which for decades has resulted in wage stagnation and therefore a loss of buying power for the working class. Removing profiteers from our public health programs begins the process of demonstrating how unnecessary it is to have insurance middlemen in our health care system at all.

And finally, we all pay for public health programs, regardless of how we ourselves access our own healthcare. Being good stewards of our public tax dollars is good government: it increases oversight, accountability, and transparency of the people, by the people, and for the people. It’s in all our best interest to build our public health infrastructure because health is public. 

Here in Minnesota, there is a coalition the labor movement is part of called “We Make Minnesota.” We Make Minnesota does a great job in explaining why de-privatization is critically important for our economic and democratic wellbeing by stating,

“By shifting public services to the private sector, we introduce perverse incentives, creating opportunities for fraud and profiteering, as well as an increased need for auditing and oversight. Over time, privatization weakens the public sector’s ability to perform essential tasks. This loss of ‘public sector capacity’ cedes democratic processes to private actors, handing control of public data and decisions to unaccountable executives, turning public dollars into corporate profits, and enabling greater social and political control by powerful corporations and the rich.”  

If your state was highlighted above, please reach out to me at rose.roachLCSP@outlook.com so I can help connect you to those working on the campaign to eliminate private insurers from your state’s Medicaid program. If your state is not yet working on eliminating privatizers from their public Medicaid program, and you’re interested in getting such a campaign to do so up and running, also reach out to me as I’m happy to help provide tools for getting started. As we continue to build the public infrastructure for Medicare for All, or a state-based single-payer system, job one is making our public health programs truly public.

Rose Roach

National Coordinator

Labor Campaign for Single Payer