Why States Should Not Expand Medicaid

Date:

More States Easing Into Expansion

Should Alabama expand Medicaid coverage?

New Hampshire, Michigan, Indiana, Pennsylvania, Alaska, Montana, and Louisiana all expanded their Medicaid programs between 2014 and 2016. Expansion took effect in Virginia and Maine in 2019, in Utah, Idaho, and Nebraska in 2020, and in Oklahoma and Missouri in 2021.

The 2018 election was pivotal for Medicaid, with three states passing ballot initiatives to expand Medicaid, and Kansas, Wisconsin, and Maine electing governors who are supportive of Medicaid expansion .

The first six states to implement Medicaid programs did so in 1966, although several states waited a full four years to do so. And Alaska and Arizona didnt enact Medicaid until 1972 and 1982, respectively. Eventually, Medicaid was available in every state, but it certainly didnt happen everywhere in the first year.

Theres big money involved in the Medicaid expansion decision for states. Under ACA rules, the federal government pays the vast majority of the cost of covering people who are newly eligible for Medicaid. Through the end of 2016, the federal government fully funded Medicaid expansion. The states started to pay a small fraction of the cost starting in 2017, eventually paying 10 percent by 2020. From there, the 90/10 split is permanent the federal government will always pay 90 percent of the cost of covering the newly eligible population, assuming the ACA remains in place.

Here’s Why States Must Resist The Temptation To Expand Medicaid

Last week, Alaska became the 30th state to expand Medicaid with federal funding from the Affordable Care Act. “Alaska and Alaskans cannot wait any longer,” said Gov. Bill Walker. “We’re not going to step away from this opportunity to help fellow Alaskans, period.”

Some “help.” Obamacare’s Medicaid expansion is saddling taxpayers with billions in new health costs — much of which the states will eventually have to shoulder on their own. The program’s new beneficiaries, meanwhile, may have coverage. But they face interminable waits to actually find doctors and get care. And that care is often of low-quality.

The 20 states that have thus far avoided expanding Medicaid must continue to resist. If many more state dominos fall, Obamacare’s multibillion-dollar expansion will be nearly impossible to undo — even if Republicans sweep the elections in 2016.

Obamacare’s Medicaid-expansion spell is proving tantalizing to more than just Alaska. Billions of dollars in “free” federal money will do that.

The Democratic governors of Missouri and Virginia — who had previously said “no” to expansion — might soon say “yes.” Utah’s Republican governor is talking with the Obama administration about how to expand his state’s program.

These governors should know better.

Costs under the expansion are higher than expected. Earlier this month, the Centers for Medicare and Medicaid Services observed that treating enrollees in the states that expanded cost about $1,000 more than anticipated.

Will The Deep South Ever Expand Medicaid Would It Matter

Scholars and pundits have predicted that every state ultimately would expand Medicaid, arguing that the opportunity to have the federal government pay 90%100% of the costs for insuring large numbers of people would be too good to pass up. To date, 37 states have taken the deal. However, a block of states in the Deep South continues to resist.

Southern states are home to an estimated 92% of the 2.5 million people who fall into the Medicaid coverage gappeople who would be eligible for coverage if their state were to expand Medicaid but who are too poor to qualify for subsidies on a health insurance exchange.1 Will these states ever expand Medicaid? What political factors would need to come together for this to happen?

This is an ideal time to ask these questions, as three southern states hold their gubernatorial and legislative elections in the off year between the national midterm and presidential elections. This November, incumbent governors are running for reelection in Kentucky and Louisianatwo Southern states that have expanded Medicaidand Mississippi will elect a new governor. Medicaid politics has played an important role in all three states in ways that illustrate four key points about the future of the program.

Medicaid Expansion Remains a Divisive Issue

The Path to Medicaid Expansion is Varied, but Narrow

Expansion or Retrenchment?

The Limits of the Program

References

Read Also: Does Medicaid Cover Paragard Iud

Where The $100 Billion Figure Comes From

When we reached out to O’Rourke’s campaign for evidence to support the claim, an official pointed us to a 2018 editorial from the Houston Chronicle that shared the opinion that turning down federal funding for Medicaid expansion puts the onus on counties to figure out how to serve uninsured people.

The editorial board wrote, “Under the plan passed as part of the Affordable Care Act in 2014, Texas would have received an estimated $100 billion over the course of a decade in exchange for increasing Medicaid eligibility to 138 percent of the poverty line.”

In 2021, 138% of the federal poverty line works out to an income of $17,774 for an individual and $36,570 for a family of four.

Texas lags behind the rest of the nation when it comes to health care coverage. According to 2019 Census Bureau health insurance coverage data released in 2020, nearly 1 in 5 Texans, or 18.4%, are uninsured.

Adults without dependents or disabilities are not eligible for Medicaid regardless of income in Texas, and parents of dependent children are eligible up to about 14% of the federal poverty level, according to a 2020 Texas A& M study on Medicaid expansion for Episcopal Health Foundation, an advocate for Medicaid expansion.

So, Texas has a coverage gap between Medicaid eligibility and eligibility for a federally subsidized Affordable Care Act Marketplace plan that begins at 100% of the federal poverty line.

Why States Should Resist Expanding Medicaid

Louisiana Offers Clear Example Why States Should Expand ...

Matt Dean discusses why the thirteen states resisting federal pressure to expand Medicaid are doing the right thing.

There are thirteen states left who have resisted federal pressure to expand their Medicaid programs. Matt Dean, senior fellow on health care at The Heartland Institute, has been testifying before state legislatures in those states explaining why these states should resist the federal financial bait. In some cases, its not just the carrot but the stick they may need to resist if they fail to expand Medicaid. Once states expand their programs to the non-disabled, it will be very hard to go back. States find they are on the hook for unanticipated fiscal costs and can no longer try innovative programs to address health insurance problems.

Dean discusses what he learned as a seven-term legislator in the Minnesota House of Representatives. Dean served in leadership roles and had oversight on health care finances. Minnesota was one of the early states to expand Medicaid under Obamacare. He discusses what impact the move has had on the private health insurance market as well as a program the state tried before expansion that actually worked to help the marginalized get better care from hospitals. Dean discusses the kind of pressure hold out states are under to expand their Medicaid programs and why that could be a negative thing overall for the country.

Read Also: Eye Doctors That Accept Straight Medicaid

Will Expanding States Come To Regret Their Decision

Going beyond disputes about what the economic record shows, we can also look to the felt experience in states that have expanded whether blue, red or purple. Contradicting claims that expansion states now regret their decisions, Republican governors in at leastfive expansion states have voiced their continuing support for expansion, and several openlyopposed recent Congressional efforts to repeal expansion. Likewise, Republican-led legislative bodies in several states have ratified or reauthorized their states initial expansion. And, none of the states that had legislative triggers, allowing them to roll back or reconsider expansion if projected costs turn out to be seriously wrong, have felt the need to pull the plug on expansion.

Contrary evidence from opponents suggesting official regret comes from expansions that occurred prior to the ACA, when the states bore a much greater share of expansion costs. Not only is the ACA deal much sweeter for states than before, the Trump administration has now increased the flexibility for states to add elements in their expansion programs that will help to better control costs going forward, such as patient cost-sharing.

Public Support For Medicaid Expansion

Public support for Medicaid expansion is relatively strong, even in Conservative-leaning states: In Wyoming , 56% of the public are in favor of Medicaid expansion. But the Republican-led legislature in Wyoming has consistently rejected Medicaid expansion, despite Republican former Governor Matt Meads support for expansion.

Voters in Utah, Idaho, and Nebraska all conservative-leaning states approved Medicaid expansion ballot initiatives in the 2018 election. And the same thing happened in Missouri and Oklahoma in 2020.

In Texas home to more than a quarter of those in the coverage gap nationwide a board of 15 medical professionals appointed by then-Governor Rick Perry recommended in November 2014 that the state accept federal funding to expand Medicaid, noting that the uninsured rate in Texas was unacceptable. But no real progress towards Medicaid expansion has been made since then, and U.S. census data indicated that 18.4% of Texas residents were uninsured in 2019 the highest rate in the country

There are several other states where the legislature or the governor or both are generally opposed to the ACA, but where Medicaid expansion has been actively considered, either by the governor or legislature or in negotiations with the federal government. These include Kansas, North Carolina, and Tennessee.

Also Check: Can I Sell My House While On Medicaid

Protect Our Care: Why Remaining Holdout States Should Expand Medicaid

April is Medicaid Awareness Month, and the Republican lawmakers in the states that have not yet expanded Medicaid now have even more reason to do so. In addition to providing affordable coverage options for millions of uninsured Americans through the Affordable Care Act, the American Rescue Plan provides robust financial incentives for the 14 states that have not implemented Medicaid expansion. The new offer is too good for holdout states to turn down: In addition to covering 90 percent of the costs for the expansion population, the federal government will chip in an extra 5 percent for the traditional Medicaid population for two years. This translates to billions in additional dollars for the states.

Despite the overwhelming benefits of Medicaid expansion, Republicans have spent years undermining the ACA and its expansion of Medicaid at every turn, blocking millions from coverage. Yet the program has become increasingly popular among conservative voters. In 2020, the country saw voters in two deeply conservative states, Oklahoma and Missouri, approve expansion. 75 percent of Americans have a favorable view toward the Medicaid program, and 61 percent of Americans in non-expansion states favor expansion.

Medicaid Expansion Saves Lives. *Voters in Missouri and Oklahoma have approved expansion in 2020, but these states have not yet implemented the program. Both states are eligible for enhanced funding under the American Rescue Plan.

Option : Change The Aca To Open Up The Exchanges

Missouri Senate votes not to fund Medicaid expansion

A fourth idea, Rudowitz says, is to change the law to remove the minimum cutoff for the private health insurance exchanges, since “right now, individuals who are below poverty are not eligible for subsidies in the marketplace.” With this option, states wouldn’t be paying any of the costs, since the federal government pays premium subsidies, Rudowitz says, but “there are issues around beneficiary protections, benefits, out-of-pocket costs.”

What’s next: This idea hasn’t yet been included in any current congressional bills.

Also Check: Is My Medicaid Still Active

Why States Should Not Expand Medicaid

POSTED BY Galen Institute on May 1, 2013.

States are being strongly pressured to expand Medicaid to families earning up to $30,000 a year, as the Affordable Care Act allows.

While several high-profile governors have agreed to expand this broken program, many others governors and state legislators are cautious. They are correct to be concerned.

They dont want to deny people access to health care. But they do want to halt expansion of a program that provides limited access to quality care while devouring state budgets. Many political leaders are demanding that Washington allow states to improve Medicaid for their most vulnerable citizens.

Medicaid the joint federal and state program designed to finance health care for the poor has not been fundamentally changed since it was created in 1965. Legislators know Medicaid desperately needs to be modernized for the 21st century, and even President Obama argued the case during the debate over ObamaCare. It is not sufficient for us simply to add more people to Medicare or Medicaid to increase the rolls, to increase coverage in the absence of cost controls and reform, Mr. Obama said, adding that another way of putting it is we cant simply put more people into a broken system that doesnt work.

The health overhaul law did not improve Medicaid, but instead it offers a generous but temporary 100% federal match to encourage states to expand Medicaid to families earning up to 138% of poverty.

1. Medicaid harms the poor.

NOTES

What Would Happen If All States Expanded Medicaid

If states that are currently not expanding their programs adopt the Medicaid expansion, all of the nearly 2.2 million adults in the coverage gap would gain Medicaid eligibility. In addition, 1.8 million uninsured adults with incomes between 100 and 138% of poverty6 would also gain Medicaid eligibility . Though most of these adults are eligible for substantial tax credits to purchase Marketplace coverage,7 Medicaid coverage would likely provide more comprehensive benefits and lower premiums or cost-sharing than they would face under Marketplace coverage. For example, research from early implementation of the ACA showed that coverage of behavioral health services, prescription drugs, rehabilitative and habilitative services, and long-term services and supports may be more limited in the Marketplace compared to Medicaid.8,9 In addition, research examining the population with incomes between 100-138% FPL in expansion and non-expansion states finds that Medicaid expansion coverage produced far greater reductions than subsidized Marketplace coverage in average total out-of-pocket spending, average out-of-pocket premium spending, and average cost-sharing spending.

Figure 3: Nonelderly Uninsured Adults in Non-Expansion States Who Would Be Eligible for Medicaid if Their States Expanded, 2019

Don’t Miss: Medicaid Provider Enrollment Phone Number

The Human Toll Of The Medicaid Coverage Gap

Of course, theres more to Medicaid expansion than just money. Harold Pollack very clearly explains the human toll of the Medicaid coverage gap: Based on the 3,846,000 people who were expected to be in the coverage gap in January 2015, we can expect 4,633 of them to die in any given year because they dont have health insurance.

Are Opposition Claims Accurate

Health Reform

Claims that the costs of Medicaid expansion have far exceeded expectations are overstated, misleading, and substantially inaccurate, based on a review of the credible evidence from either academic or government sources. The primary basis of this claim is the fact that many expansion states have enrolled more people than they initially expected. However, because the federal government pays for most of their costs, this increased enrollment has not translated into large percentage increases in states Medicaid budgets.

To the contrary, the leading peer-reviewed, academic study on this question documented, based on comprehensive data from the National Association of State Budget Officers that, by 2015, there were no significant increases in spending from state funds as a result of the expansion. Although states will start to incur some costs in years following 2015 as their 10 percent funding requirement is phased in, severalexpertanalystspredict that those costs are likely to remain modest, despite increased enrollment.

Read Also: Apply For Medicaid Health Insurance

Apply For Medicaid Coverage Even If Your State Hasnt Expanded

Even if your state hasn’t expanded Medicaid and it looks like your income is below the level to qualify for financial help with a Marketplace plan, you should fill out a Marketplace application.

Each state has coverage options that could work for you particularly if you have children, are pregnant, or have a disability. And when you provide more detailed income information you may fall into the range to save.

How We Conducted This Study

Our estimates use the Urban Institutes Health Insurance Policy Simulation Models baseline for 2022. HIPSM is a detailed microsimulation model of the health care system designed to estimate the cost and coverage effects of proposed health care policy options. The model simulates household and employer decisions and models the way changes in one insurance market interact with changes in other markets. HIPSM is designed for quick-turnaround analyses of policy proposals. It can be rapidly adapted to analyze various new scenarios from novel health insurance offerings and strategies for increasing affordability to state-specific proposals and can describe the effects of a policy option over several years.

HIPSM is based on two years of the American Community Survey, which provides a representative sample of families large enough for us to produce estimates for individual states and smaller regions, such as cities. The model is designed to incorporate timely, real-world data to the extent they are available. In particular, we regularly update the model to reflect published Medicaid and marketplace enrollment and costs in each state.

NOTES

1. The amounts are higher in Alaska and Hawaii.

2. Uninsurance is defined throughout this brief as lacking ACA minimal essential coverage both those with no coverage and those with short-term and limited-duration policies are considered uninsured. Similarly only those with minimal essential coverage are considered covered by insurance.

Read Also: How Does A Person Get On Medicaid

The Impact Of Medicaid Expansion On State Spending

States must finance a share of the cost of expansion. As such, expanding Medicaid will increase state spending. However, expanding Medicaid also allows states to reduce spending on traditional Medicaid. Thus, the net increase in total Medicaid spending is smaller than the cost of expansion. Expanding Medicaid also may allow states to cut spending outside Medicaid particularly on programs that provide health services to low-income people.

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