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Expanding coverage to the estimated 2.2 million people who lack affordable health insurance options in Medicaid’s expansion-denial states would fulfill a promise made by the Biden campaign while its other major health promises, such as state drug price negotiations and a public option, are in Congress face tough opportunities. Democrats also believe this would bring their party a huge win in next year’s highly competitive midterm elections as Medicaid’s expansion is well received – even in states where Republican leaders have blocked it for years.
However, the new efforts carry risks that Democratic lawmakers, White House officials and health care advocates have struggled to resolve in behind-the-scenes discussions in recent months, say those involved in those talks. One challenge is to develop a program that will not invite backlash from a healthcare industry ready to fight the Democrats on other sweeping changes. Another problem is inadvertently rewarding states that have blocked Medicaid’s expansion for years. Any plan would also come at a high price.
“It is generally accepted that action is needed to reach out to the population,” said Henry Connelly, spokesperson for House spokeswoman Nancy Pelosi. “Everyone is looking for ways to achieve this.”
Democratic lawmakers are weighing a few options that could potentially be wrapped in a big economic package that they hope will be passed down to party lines this year. But they haven’t agreed on an approach yet, and Democratic leaders face competing calls to use upcoming infrastructure legislation to expand Medicare eligibility and benefits, mandate drug price negotiations, and grant Obamacare subsidies strengthen.
Healthcare advocates warn that Democrats have limited time to respond to stalled progress in Medicaid’s expansion – as the largest unfinished part of the Affordable Care Act – as the Washington party steps forward for the first time since the bill was passed controlled for a decade.
“The moment is now,” said Judy Solomon, senior fellow at the left-wing Center on Budget and Policy Priorities. “This is probably the only moment we’ll have in years.”
The White House has taken a largely carefree approach to talks about a Medicaid expansion alternative, as it has done with other major health care proposals that Biden has fought for. While Biden’s budget proposal on Friday reiterated his support for these ideas, including closing the Medicaid coverage gap, the details were lacking. The only major health pledge that Biden has included in major economic laws is the one seen as the least politically divisive: to make the temporary expansion of financial aid for people who buy Obamacare health plans permanent through the latest Covid aid package .
“The president has been committed to serving this population,” said a government official when asked about the government’s plans in the Medicaid enlargement states.
Congressional bodies responsible for Medicaid, the House Energy and Trade Committee, and the Senate Finance Committee have directed work on the issue. The committee chairs and Pelosi have not spoken publicly about their plans while the staff work through the details.
Support for a federal workaround got a big boost this week when Georgia Sens. Raphael Warnock and Jon Ossoff, whose elections put Democrats in control of Washington, called on the leadership to incorporate politics into infrastructure legislation. Senate confirmation this week that Chiquita Brooks-LaSure heads the state Medicare and Medicaid agency is also expected to accelerate the work of the Biden administration on health insurance policy.
The renewed attempt to insure people in the expansion holdouts comes after those states largely ignored new financial incentives to expand Medicaid that were included in the Democratic stimulus. The bill offers a two-year top-up on federal Medicaid payments to states that are expanding, in addition to the generous federal grant they would already receive to cover expanding populations.
Of the holdout states, only the Wyoming Legislature seriously considered an enlargement bill this year, but it died in the Senate after the House passed it. And recent moves in other states showed that expansion across the country still faces major hurdles.
In Wisconsin, Republican lawmakers quickly closed a special session this week convened by Democratic Governor Tony Evers to consider enlargement. In Missouri, the state faces a lawsuit after Governor Mike Parson refused to implement a voter-approved expansion last summer. And in Mississippi, advocates halted a campaign the next year to put Medicaid’s expansion on the ballot after a ruling by the state’s Supreme Court ruled such initiatives impossible.
“What just happened in Wisconsin and Missouri is giving some momentum to the effort because it is clear that wherever they can stop this in holdouts, Republicans will do so,” said Brad Woodhouse, president of the liberal group Protect Our Care, which is closely allied with Democratic leaders in Congress.
Policy making remains difficult, however. And while Republicans in Congress have given up trying to get rid of Obamacare, they are not expected to support those efforts.
Biden’s budget calls for the creation of a state health insurance option in the holdout states that would provide free coverage along the lines of Medicaid benefits. States that have already expanded – and are paying 10 percent of the cost of the program – would receive unspecified “financial incentives” to discourage them from removing coverage.
This idea would likely attract quick opposition from hospitals and health insurers who support Medicaid’s expansion but oppose a public option that would erode their profits.
Chip Kahn, president of the Federation of American Hospitals, said it would be difficult to put a new coverage system in place without creating a financial imbalance between states that have expanded Medicaid and those that have not.
“The fact that not all states have implemented the ACA Medicaid expansion means there is inequality among eligible Americans,” said Kahn, whose group represents for-profit hospitals. “But the problem is that trying to find a solution for the states that have stayed out of ACA Medicaid is creating an inequality in funding and rules between states that are expanding and those that don’t.”
Another idea is to expand Obamacare subsidies to allow low-income people in the non-enlargement states to get free private coverage in the law’s insurance markets. Currently, people who earn below the state poverty line, or around $ 13,000 a year, are not eligible for Obamacare grants. Expanding these subsidies would be expensive because private plans cost the government much more per person than Medicaid or Medicare.
A third idea from Doggett, chairman of the Health Subcommittee on Ways and Means, would seek to bypass state opposition by allowing counties and other local governments to expand Medicaid in a hyperlocal fashion. That would leave large gaps in coverage and could be difficult to implement.
On Thursday, nearly 60 civil rights and advocacy groups – including the NAACP, The Arc, Planned Parenthood, and the Whitman-Walker Institute – sent a letter calling on lawmakers to expand coverage in the holdout states “as part of this year’s recovery legislation.”
“Congress has a responsibility – which it has assumed in some of its proudest moments in the past – to intervene in national politics to ensure that everyone is treated equally, no matter what state or territory they live in,” they wrote .