The formal end of the pandemic could swell the ranks of uninsured children by 6 million or more as temporary reforms to Medicaid are lifted.
Why it matters: Gaps in coverage could limit access to needed care and widen health disparities, by hitting lower-income families and children of color the hardest, experts say.
The big picture: A requirement that states keep Medicaid beneficiaries enrolled during the public health emergency in order to get more federal funding is credited with preventing a spike in uninsured adults and kids during the crisis.
Children are the biggest eligibility group in Medicaid, especially in the 12 states that haven’t expanded their Medicaid programs under the Affordable Care Act.
The lifting of the public health emergency, which was just extended to July 15, will lead states to determine whether their Medicaid enrollees are still eligible for coverage — a complicated process that could result in millions of Americans being removed from the program.
That would more than double the number of uninsured kids, which stood at 4.4 million in 2019.
“It is a stark, though we believe conservative, estimate,” said Joan Alker, the center’s executive director. “There are a lot of children on Medicaid.”
Between the lines: Not all of the Medicaid enrollees who are removed from the program would become uninsured. But parents and their children could be headed down different paths if their household income has risen even slightly.
Adults who’ve returned to work may be able to get insurance through their employer. Others could get coverage through the ACA marketplace, though it’s unclear whether that would come the COVID-inspired extra financial assistance that’s now being offered.
Most kids would be headed for the Children’s Health Insurance Program, Alker said — a prospect that can entail added red tape and the payment of premiums or an annual enrollment fee, depending on the state.
What we’re watching: Changes in children’s coverage could be most pronounced in Texas, Florida and Georgia — the biggest non-Medicaid expansion states, which have higher rates of uninsured children than the national average.
Congress could still require continuous Medicaid coverage, the way the House did when it passed the sweeping social policy package that stalled in the Senate over cost concerns.
CMS’ Office of the Actuary projects a smaller decline in Medicaid enrollment than some health policy experts are predicting — and the Biden administration continues to move people deemed ineligible for Medicaid onto ACA plans, Raymond James analyst Chris Meekins noted in a recent report on the unwinding of the public health emergency.
President Joe Biden proposed a change in federal regulations April 5 to expand health coverage to millions of people through the Affordable Care Act.
The proposal aims to close what is known as the “family glitch,” according to a press release.
People who do not have access to affordable health coverage through their employers can qualify for subsidies to purchase coverage through the ACA marketplace. The federal definition of affordable employer-provided coverage is only for single individuals and not for family members, meaning about 5 million people are ineligible for the marketplace subsidy.
To fix the glitch, the proposal directs the Treasury Department and Internal Revenue Service to allow family members of employees who are offered affordable self-only coverage but unaffordable family coverage to qualify for the subsidies to purchase family health coverage through the ACA marketplace. If the rule is approved, an estimated 200,000 uninsured people would gain coverage, and nearly 1 million would see their coverage become more affordable.
President Biden will also sign an executive order Tuesday directing agencies to find ways to make coverage more affordable for more people.
Starting next month, the federal government will stop reimbursing hospitals and other providers for the vaccination, testing, and treatment of uninsured COVID-19 patients. So far, about 50K providers have submitted a total of $20B of claims for COVID-related care for the uninsured.
Congress has yet to authorize more funding for this and other COVID relief programs, after stripping $15.6B from the latest government spending package. Though the White House is asking Congress to authorize $22.5B for further COVID aid and surge preparedness, it’s not clear how much of any new funding would go toward reimbursing care for the uninsured.
The Gist: This news comes as US officials expect a rise in cases driven by the Omicron BA.2 subvariant. Hospitals, already struggling with high labor and supply expenses, will face further margin pressures if a future COVID surge brings increased hospitalizations.
This will be especially true for safety net hospitals, and for those in states which haven’t expanded Medicaid. At the same time, 15M Americans are also at risk of losing Medicaid coverage when the federal government ends the public health emergency. Lower-income patients and the hospitals that treat them have already shouldered COVID’s worst effects, and the funding stalemate risks further worsening their situation.
Obamacare enrollment at a record-high 14.5 million
Congress may not fund premium subsidies in 2023
The Affordable Care Act marks its 12th anniversary Wednesday, and despite a record 14.5 million enrollees, the Biden administration is preparing for the possibility that millions could lose coverage next year.
The $1.9 trillion pandemic stimulus package (Public Law 117-2), signed March 2021, reduced Obamacare premiums to no more than 8.5% of income for eligible households and expanded premium subsidies to households earning more than 400% of the federal poverty level. The rescue plan also provided additional subsidies to help with out-of-pocket costs for low-income people. As a result, 2.8 million more consumers are receiving tax credits in 2022 compared to 2021.
But without congressional action, the subsidies—and the marketplace enrollment spikes they ushered in—could be lost in 2023. A new HHS report released Wednesday, shows an estimated 3.4 million Americans would lose marketplace coverage and become uninsured if the premium tax credits aren’t extended beyond 2022.
In a briefing with reporters Tuesday, Chiquita Brooks-LaSure, administrator for the Centers for Medicare & Medicaid Services, said her agency is “confident that Congress will really understand how important the subsidies were” to enrolling more people this year. The CMS would “pivot quickly,” however, to implement new policies and outreach plans if the subsidies aren’t extended as open enrollment for 2023 begins in November.
“That said, today and tomorrow we are celebrating the Affordable Care Act,” Brooks-LaSure added. “As part of that process, we’ve been reminding ourselves that sometimes it takes some time to pass legislation. And just like the Affordable Care Act took time, we’re confident that Congress is going to address these critical needs for the American people.”
After years of legal and political brawls that turned the landmark legislation into a political football, Obamacare “is at its strongest point ever,” Brooks-LaSure said. The 14.5 million total enrollees—those who extended coverage and those who signed up for the first time—is a 21% increase from last year. The number of new consumers during the 2022 open enrollment period increased by 20% to 3.1 million from 2.5 million in 2021.
This week, the Department of Health and Human Services will highlight the impact of the ACA and the Biden administration’s efforts to strengthen the law. The CMS recently announced a new special enrollment period opportunity for people with household incomes under 150% of the federal poverty level who are eligible for premium tax credits. The new special enrollment period will make it easier for low-income people to enroll in coverage throughout the year.
Troubled times could be around the corner, however, as millions of people with Medicaid coverage could become uninsured after the public health emergency ends. Under the Families First Coronavirus Response Act (Public Law 116-127), signed March 2020, states must maintain existing Medicaid enrollment until the end of the month that the public health emergency is lifted. Once the continuous enrollment mandate ends, states will resume Medicaid redeterminations and disenrollments for people who no longer meet the program’s requirements.
Dan Tsai, deputy administrator and director of the Center for Medicaid and CHIP Services at CMS, said the agency is working with states to make sure people who lose Medicaid coverage can be transferred into low- and no-cost Obamacare coverage.
“A substantial portion of individuals who will no longer be eligible for Medicaid will be eligible for other forms of coverage,” including marketplace coverage, Tsai told reporters Tuesday.
In a statement, President Joe Biden acknowledged the law’s great impact. “This law is the reason we have protections for pre-existing conditions in America. It is why women can no longer be charged more simply because they are women. It reduced prescription drug costs for nearly 12 million seniors. It allows millions of Americans to get free preventive screenings, so they can catch cancer or heart disease early—saving countless lives. And it is the reason why parents can keep children on their insurance plans until they turn 26.”
Job losses from the COVID-19 pandemic are the highest since the Great Depression. A year and a half later, most Americans who lost their health insurance along with their job remain uninsured.
Most Americans who lost their jobs and health insurance more than a year ago remain uninsured.
Over 1,200 Americans who are still unemployed due to COVID-19 were surveyed by AffordableHealthInsurance.com. At least four out of five in all participants don’t have insurance coverage.
To be exact, 56% of Americans who remain unemployed since being laid off due to the COVID-19 pandemic lost their health insurance along with their job. In addition, 23% of workers did not have employer-provided health insurance prior to losing their jobs.
Even before the pandemic, small businesses struggled to absorb the cost of providing health insurance to their employees, said health insurance advisor and nursing consultant Tammy Burns in the Affordable Health Insurance study.
“Companies have cut costs by going with high-deductible plans and sharing less of the cost towards the insurance,” Burns said. “This makes it cheaper for employees to get their own health insurance through the Affordable Care Act (ACA) marketplace. At larger companies, health care costs are growing faster than worker wages, so a large amount of an employee’s check goes to insurance. Therefore, many workers opt out because they can’t afford it.”
Majority of Those Who Lost Health Insurance Still Lack Coverage
Of the 56% of unemployed Americans who lost their health insurance along with their job, 81% are still uninsured.
This lack of coverage is impacting certain groups more than others. There are also several contributing factors to why the number of unemployed Americans without health insurance remains high.
These factors are:
Men more likely to remain uninsured than women
When broken down by gender, men are more likely than women to have lost their health insurance when they lost their jobs at 66% and 44%, respectively. However, women are twice as likely as men to have not had health insurance in the first place at 31% and 16%, respectively.
Currently, men are slightly more likely to still be uninsured. Eighty-four percent of male survey respondents do not currently have health insurance, compared to 75% of women.
Majority of unemployed Millennials, Gen Xers still uninsured
Our survey also found that certain age groups are more likely than others to still be uninsured after a pandemic-related job loss.
Eighty-six percent of individuals ages 35 to 44, and 84% of both 25 to 34 year-olds and 45 to 54 year-olds remain without health insurance after being laid off. Comparatively, 67% of unemployed individuals 18 to 24, and 58% of those older than 55 are still uninsured.
Americans ages 25 to 44 are also the age group most likely to have lost their health insurance when they were let go from their jobs (66%).
Inability to Afford Private Insurance The Top Reason to Remain Uninsured
The high cost of individual insurance is the number one reason Americans still unemployed from the pandemic remain uninsured.
Sixty-seven percent of those uninsured can’t afford private health insurance. Eleven percent of people who still lack health insurance say they did not qualify for government-funded health insurance, despite the fact that a number of states expanded access to Medicaid during the pandemic.
A lack of understanding about how the ACA marketplace works may also play a role in why uninsured Americans are not pursuing all possible avenues to get health insurance.
“People are scared of the ACA because it involves a lot of personal information, like taxes,” Burns said. “I have found that many people are afraid it is ‘the government being in my business.’ There is a lack of knowledge about how helpful and affordable the ACA is now. There needs to be better education about this program.”
One in five uninsured Americans choose not to have health insurance
The survey also found 20% of unemployed Americans who are uninsured choose to forgo health insurance altogether.
This is particularly true for men, 22% of whom are choosing not to have health insurance, compared to 15% of women.
Younger adults are also more likely than older Americans to opt out of health insurance if they are unemployed. Twenty-five percent of 25 to 34 year-olds, and 20% of 25 to 34 year-olds choose not to have health insurance.
Medication, Routine Checkups Skipped Due to Lack of Insurance
A lack of insurance has serious short- and long-term implications for individuals’ health and well-being. The biggest impact: 58% of uninsured individuals are no longer getting routine care, which could hinder their ability to identify more serious underlying issues.
Other impacts include no longer taking doctor-prescribed medication (56%); delaying planned medical procedures (46%); not seeking treatment for chronic issues (44%), and no longer receiving mental health treatment (41%).
Three-quarters of older Americans not getting regular check-ups
Our survey also found that those at greater risk for medical issues, based on age, are the most likely to be skipping their routine check-ups. Three-fourths of uninsured individuals over the age of 55 (76%) say they are not going for regular doctor visits because of their lack of insurance, the highest percentage of any age group.
Meanwhile, 64% of individuals 35 to 44 are not taking doctor-prescribed medication, which can have both short- and long-term negative effects.
Majority of Uninsured Americans “Very likely” to be Financially Devastated by Medical Emergency
Given that so many individuals are already hard-pressed to afford health insurance, it’s not surprising that many of them will also be in a dangerous place financially if there is a medical emergency.
Fifty-nine percent of uninsured people are “very likely” to be financially devastated by a medical emergency, while another quarter are “somewhat likely” to face financial ruin in the event of a medical emergency.
After months of negotiations, House Democrats on Friday passed their version of the Build Back Better bill—an expansive $1.7 trillion package that contains some of the largest health reforms since the Affordable Care Act’s passage in 2010.
While the overall scope of the bill is roughly half the size of President Biden’s original $3 trillion proposal, many of Democrats’ key health care provisions made it in, albeit with some modifications. What’s more, the Congressional Budget Office projected that while the overall bill would add $367 billion to the deficit over the 10 year period, the health care provisions would all be largely paid for by provisions aimed at lowering drug prices.
Below, I round up the five biggest health care changes included in the House bill.
The House bill leverages the ACA’s exchanges and federal tax credits to expand access to coverage in two ways. First, the bill would extend the American Rescue Plan’s enhanced ACA tax credits through 2025. The enhanced tax credits, which are currently slated to expire in 2023, fully subsidize coverage for people with annual incomes up to 150% of the federal poverty level (FPL) and have enabled people above 400% FPL to qualify for subsidies and capped their premium costs at 8.5% of their incomes.
While Democrats had originally proposed to permanently expand those subsidies, they ultimately had to scale back this—and other proposals—to ensure they could cover the costs. But as we’ve seen in the past, it is much harder to take away an existing benefit or subsidy than it is to create a new one—so while the current bill was able to cover the cost of the health care provisions by making them temporary, lawmakers will have to revisit the tax credits before 2025 and find new money to either further extend them or permanently authorize them. This is one of several health care provisions we could see the Senate take a closer week at in the coming weeks.
Second, the House bill takes aim at the so-called Medicaid coverage gap. The bill would enable residents below 138% FPL who live in states that have not expanded their Medicaid programs to qualify for fully subsidized exchange plans through 2025. While an earlier version of the House bill included language for a new federal Medicaid program covering those below 138% FPL who live in non-expansion states to begin in 2025, the final House bill contains no such program.
Instead, the bill aims to encourage non-expansion states to expand their Medicaid programs by reducing their Disproportionate Share Hospital (DSH) payments by 12.5% beginning in 2023—a significant cut that the American Hospital Association (AHA) estimates would reduce DSH payments in those states by $2.2 billion over five years and $4.7 billion over 10 years. At the same time, expansion states would see their federal match for spending on the Medicaid expansion population rise from 90% to 93% from 2023 through 2025.
While the AHA and others are pushing back against the proposed DSH payment cuts—the move addresses the moral hazard component that critics raised about earlier versions. It no longer rewards holdout states for not expanding their programs—effectively punishing those who did and are now on the hook for 10% of their expansion population’s costs. It’s a clever move, and one we’ll be watching to see if it survives the Senate.
2. New Medicare benefits.
The House bill adds a hearing benefit to Medicare beginning in 2023. The hearing benefits would cover hearing aids and aural rehabilitation, among other services. While this is certainly a win for many Medicare beneficiaries who do not have or cannot afford private Medicare Advantage plans, this is significantly scaled back from the original proposal to add hearing, as well as dental and vision benefits.
However, given that Sen. Bernie Sanders (I-Vt.) has named Medicare benefit expansions as one of his top priorities, it’s possible we could see this topic revisited in the Senate. But any meaningful change would mean Democrats need to find more money to cover the costs—and so far, that has proved challenging.
3. Medicaid home and community care.
The House bill allocates $150 billion for home- and community-based care. The funding would be used to help increase home care provider reimbursement rates and help states bolster home- and community-based care infrastructure.
While the funding is down from an original proposal of $400 billion, the Biden administration—and the Covid-19 pandemic—have made it clear that home-based health care will continue to grow and be a key player in the U.S. health care delivery system. Providers looking at their offerings should keep an eye on how states are investing these funds and building out home-based health care delivery in their areas.
4. Lowering the costs of prescription drugs.
Democrats scored a huge win in the House bill, and that is securing Medicare authority—albeit narrower authority than they sought—to negotiate prices for some of the highest-priced Part B or Part D drugs. Under the bill, HHS would be able to select 10 drugs to negotiation in 2025, up to 15 drugs in 2026 and 2027, and then up to 20 drugs per year in 2028. To be eligible for negotiation, a drug could no longer be subject to market exclusivity.
Drug manufacturers that do not negotiate eligible drug prices could be subject to an excise tax. This was perhaps one of the most contentious provisions debated in the health care portions of this bill. Democrats for years have been seeking to give Medicare drug pricing authority, but intense lobbying and Republican—and some Democrat—objections have kept this proposal on the shelf. While it’s not the first time the House has passed a bill with drug price negotiation—it is the first time we are in a place where the Senate could reasonably pass either this or a modified version of the proposal.
The bill also would redesign the Medicare Part D benefit to create an annual cap of $2,000 on seniors’ out-of-pocket drug costs, and impose an inflation rebate on drug manufacturers’ whose drug prices rise faster than inflation (based on 2021) in a given year.
5. Other notable provisions.
The House bill also includes provisions to permanently fund CHIP, bolster the country’s pandemic preparedness and response, and bolster the health care workforce through new training and workforce programs, the nation’s first permanent federal paid family and medical leave program, investments in childcare, and more.
While the health care provisions in the House bill are notable, it’s important to remember that this is not the end of the road. The House bill now goes to the Senate, where the Senate parliamentarian will check provisions against the Byrd rule—a Senate rule requiring reconciliation bills to meet certain budgetary requirements.
Democrats also will enter a new round of negotiations, and industry groups—including PhRMA and AHA—are expected to launch a new round of lobbying. PhRMA objects to the bill’s drug price negotiation provision and AHA is fighting the provision to reduce DSH payments in non-Medicaid expansion states by 12.5%. Any Senate-passed reconciliation bill will need to go back to the House for final approval before it can go to Biden’s desk.
But this is not the only thing on lawmakers’ plates in December. Members of Congress also face several other deadlines, including addressing looming physician payment cuts and passing end of the year spending bills. The short-version is, while there’s a lot to learn from the House-passed bill, it’s possible the Senate version could look very different—and it may take several weeks before we see that bill take shape.
Earlier this year, President Joe Biden proposed a framework called Build Back Better that would, among other things, expand Medicaid. If the BBB plan is implemented, a new Urban Institute analysis predicts that federal health subsidies would outweigh a projected increase in hospital spending by about 3-to-1.
The current draft of the Build Back Better Act (BBBA) includes provisions that would extend enhanced ACA subsidies to people below 100% of the federal poverty limit in the 12 states that have not expanded Medicaid. These provisions are intended to extend health insurance coverage to millions of people and to lower the cost of healthcare for many families.
Hospitals in non-expansion states would see more than $6.8 billion in new spending as a result of the BBBA’s closing of the Medicaid gap, which is about 15 times larger than the expected disproportionate share hospital allotment cuts of $444 million, the findings showed.
Overall, new federal health subsidies disbursed to non-expansion states for people in the coverage gap would be $19.6 billion. Florida, Texas, Georgia and North Carolina hospitals are among those that would have the most substantial increases in spending because of added coverage, the analysis found.
The Urban Institute also determined that the benefits of the changes would not necessarily go to the same hospitals that would sustain reductions in DSH allotments. If true, that means some hospitals may be worse off with the proposed changes.
Still, though only a portion of the total increased federal spending under the BBBA provisions would flow to hospitals, the researcher concludes that in the years during which additional subsidies would be provided, hospitals would be substantially better off overall than they are under current law, even after proposed Medicaid DSH cuts are taken into account.
WHAT’S THE IMPACT?
The effects of the new federal health subsidies would vary across states, largely because of differences in state populations, the Urban Institute showed.
Florida hospitals, for instance, are projected to gain $1.7 billion in new spending because of added coverage, and to lose $33 million in DSH allotments, resulting in a net gain of $1.6 billion. Texas hospitals could gain $1.6 billion in new spending and lose $157 million in DSH allotments, gaining almost $1.5 billion. Georgia and North Carolina hospitals would also have substantial increases in spending because of added coverage that would exceed their reduced Medicaid DSH allotments by more than $750 million and almost $900 million, respectively.
Meanwhile, because Wisconsin already covers adults up to the FPL under Medicaid, it would have a small net loss in payments to hospitals for the Medicaid gap population, but a net gain overall.
Hospitals serving a disproportionately high share of undocumented people would see less benefit from reform than other hospitals, and could see substantial DSH cuts. At the same time, the overall decline in the number of uninsured people could save spending on uncompensated care for the uninsured, data showed. If states and localities save on uncompensated care, the savings could be distributed to hospitals most in need after DSH cuts.
THE LARGER TREND
The BBBA’s increased subsidies are set to end after 2025, whereas the bill’s Medicaid DSH cuts would be permanent. More broadly, nationwide Medicaid DSH cuts specified under the Affordable Care Act have been repeatedly delayed, but they are now due to be implemented in fiscal year 2024. At $8 billion in that year, those cuts are much larger than the DSH cuts specified in the BBBA.
Unless Congress intervenes, UI said, these ACA-related DSH reductions would be in addition to the DSH cuts in the BBBA for the 12 non-expansion states.
The BBBA was slated to go to a vote the week of November 15, but that timetable may shift. According to CNN, the Congressional Budget office has yet to give a final cost estimate score for the bill; a group of moderate Democrats is waiting to see the CBO score before deciding whether to vote for the bill.
The FDA could greenlight a vaccine for kids as soon as Friday and more workers now have vaccine mandates. But first:
Democrats are ditching progressives’ health priorities in their economic bill
The White House says Democrats have clinched a deal.
The $1.75 trillion framework for Biden’s massive social spending bill temporarily funds several of the party’s health care ambitions. But it includes big misses on health care, such as significantly paring back progressives’ goal of adding new benefits to Medicare — instead including only coverage for hearing services — and excluding Democrats’ plan aimed at lowering the sky-high prices of prescription drugs.
Will all Democrats get on board? Senior administration officials projected confidence that they would, and characterized the framework as the biggest expansion of health care in a decade. Yet, it includes major defeats for the party’s more liberal members, who have been reticent to draw red lines on what they would or wouldn’t support.
It’s a critical day. President Biden is heading to huddle privately with House Democrats this morning.House Speaker Nancy Pelosi announced plans for the chamber’s Rules Committee to hold a hearing, although legislative text hasn’t yet been released. And before leaving for his trip overseas, Biden will speak publicly about the path forward for his legislative agenda, per a White House official.
Early this morning, senior administration officials spoke to reporters on the condition of anonymity to detail the framework.
What’s in and what’s out
Prescription drug negotiation: OUT
Democrats campaigned on reducing prices of prescription drugs — and letting Medicare directly force lower prices is a key plank of that effort. But the party couldn’t overcome fierce divisions amid a lobbying storm.
“At the end of the day, there are not yet enough votes to get something across the line to deliver what the American people need and expect on prescription drugs,” a senior administration official said. “We’re going to keep fighting to get this done and deliver lower drug prices.”
The House’s signature drug proposal faced resistance from a trio of House moderates who instead backed more limited drug negotiation. On the other side of the Capitol, Sen. Kyrsten Sinema had raised objections and other senators had concerns with a bill as sweeping as the one the House passed in 2019. The industry’s main trade group has been working furiously to keep the proposal out of Democrats’ economic package.
Of note: The framework includes fully repealing a Trump-era ban on prescription drug rebates as a way to offset the cost of the package. The administration anticipates that would save $145 billion.
Medicare expansion: mostly OUT
Sen. Bernie Sanders (I-Vt.) and the House Congressional Progressive Caucus have been bullish on two main health policies: allowing the federal government to negotiate drug prices, and using those savings to expand Medicare to cover dental, vision and hearing.
The framework only creates a new Medicare benefit for hearing.
Rep. Pramila Jayapal (D-Wash.), the chair of the CPC, has repeatedly said her 96 members aren’t drawing red lines. But here’s how she characterized the CPC’s thoughts yesterday: “For a lot of members, it’s like what are we doing for seniors? How do we make sure we get some benefits for seniors in here?”
Sanders is the person to watch here. He’s long championed expanding Medicare, and has already come down on his ambitions for a wide-ranging $6 trillion bill.
Closing the Medicaid coverage gap: IN
The framework extends coverage for 2.2 million adults in the dozen, mostly GOP-led states that have refused Obamacare’s Medicaid expansion. They’ll get tax credits to receive premium-free health coverage on the Obamacare health exchanges through 2025.
Earlier this week, Manchin raised concerns with allowing the federal government to pay for health coverage for 2.2 million adults in the dozen, mostly GOP-led states refusing Obamacare’s Medicaid expansion. His own colleagues — such as Georgia Sens. Raphael Warnock and Jon Ossoff — lobbied heavily to change his mind.
Obamacare subsidies: IN
The framework would extend more generous financial help to Obamacare consumers through 2025, building on an effort that began in Biden’s coronavirus relief bill passed this spring.
In-home care: IN
Biden has pushed for a $400 billion investment in home care for seniors and the disabled. It’s been clear for weeks that his ask will be significantly pared back. Administration officials said funding for home and community-based services is included in the framework, but didn’t detail how much money would go toward the program helping keep seniors and those with disabilities out of institutional settings.
Some Democrats say it’s possible that pieces of their social policy agenda end up being enacted or extended for only a year or two, including major Affordable Care Act and Medicaid provisions.
Why it matters: Limited terms may be the only way Democrats can strike a deal within their budget. But the risk is that Republicans will be able to undo these temporary programs if they’re able to regain control of Congress through next year’s midterms.
There also aren’t many policy areas that Republicans are less excited about than the ACA and Medicaid expansion.
What they’re saying: Extending programs for only a year or two is a “possibility,” Senate Majority Whip Dick Durbin (D-Ill.) told Axios.
Extending enhanced ACA subsidies and closing the Medicaid coverage gap were measures that “we wanted … to be permanent,” said Sen. Ben Cardin D-Md.). “Clearly there’s a lot of pressure to get as much in as we can, [which] means shorter periods.”
“I think all of the programs are being considered for shorter periods. There are some that are of greater importance to get as long as possible,” Cardin added. He said it’s also possible that an extension of the child tax credit would also last only a year.
The big picture: Political, budgetary and practical factors are all at play as Democrats try to figure out what’s in and what’s out of their reconciliation bill.
But one giant consideration when it comes to the health care provisions — particularly the ACA and Medicaid ones — is that Republicans may not feel compelled to extend these programs should they gain power.
“I expect Republicans would be glad to take back the mantle of the child tax credit but Democrats should not fool themselves into thinking Republicans will feel any real pressure to extend these health care policies,” said Brendan Buck, a longtime aide to former Republican House Speaker Paul Ryan.
The other side: Republicans may encounter political pressures similar to the ones they did in 2017, when they struggled — and ultimately failed — to repeal and replace the ACA.
Declining to extend Democrat-enacted coverage policies in the next couple of years would be somewhat similar, in that the result would be millions of low-income people would lose their health coverage or see its cost skyrocket.
Also, most of the states that haven’t expanded Medicaid are ruby-red.
“Remember what happened with the Affordable Care Act — they said that they didn’t like these things, but then they couldn’t repeal them because they didn’t have another option,” said Sen. Tina Smith, (D-Minn.)
Yes, but: But inaction is different from voting to end a benefit, Buck said.
Some Democrats are skeptical, too.
“The modern Republican party isn’t for much other than the destruction of government. So the idea that Republicans are going to want to hold onto programs even if they benefit the middle class runs a bit contrary to the recent history of the party,” said Sen. Chris Murphy (D-Conn.).
The bottom line: At this point, Democrats will take any party-wide agreement they can get. And temporary health coverage expansions may have their upside.
“It’s an easy way to slim costs,” said one Democratic strategist, adding that it allows both Sen. Bernie Sanders (I-Vt.) and Sen. Joe Manchin (D-W.Va.) to claim victory.
“If I’m [Majority Leader] Chuck Schumer, I do it for a year and make Republicans vote on it in October,” right before the midterm elections, the strategist added.
Democrats’ push to extend health coverage to millions of very low-income people in red states has a lot working against it: It’s expensive, it’s complicated, it may invite legal challenges, and few national Democrats stand to gain politically from it.
Yes, but: The policy is being framed as a test not only of Democrats’ commitment to universal health coverage, but also their commitment to racial equity.
The big picture: Democrats are still figuring out how much money they have to spend in their massive social policy legislation, but there’s already intense competition among policies — including between health care measures.
Progressives are adamant about expanding Medicare to cover dental, vision and hearing benefits. But a handful of prominent Democrats are making the case that closing the Medicaid coverage gap is equally, if not more, important.
The gap exists in 12 Republican-controlled states that have refused to accept the Affordable Care Act’s Medicaid expansion, the majority of which are in the South.
What they’re saying: Closing the coverage gap is “very, very important to people of color. The majority of Black people in this country still live in the South,” said Rep. Jim Clyburn, one of the leading proponents of the measure.
More than 2 million adults are in the coverage gap, and 60% of them are people of color, according to the Center on Budget and Policy Priorities.
“What is the life expectancy of Black people compared to white people? I could make the argument all day that expanding Medicare at the expense of Medicaid is a racial issue, because Black people do not live as long as white people,” Clyburn added. “If we took care of Medicaid, maybe Black people would live longer.”
Between the lines: In terms of raw politics, it’s pretty easy to see why many Democrats would prioritize Medicare expansion over closing the Medicaid gap: Seniors live in every district and state in the U.S.
Only three Democratic senators represent non-expansion states, and in 2020, only ine of the 41 battleground House seats identified by Ballotpedia were in non-expansion states.
Yes, but: Sens. Jon Ossoff and Raphael Warnock, both from Georgia, are the reason that Democrats are able to consider their social policy legislation at all. Warnock is up for re-election next year.
“This is about people in this country, and I wish we’d stop this red state and blue state stuff,” Clyburn said. “Warnock and Ossoff won a runoff that nobody gave them a chance to win by promising they would close this gap.”
The catch: States that have already expanded Medicaid are covering a small portion of those costs themselves, and may question the fairness full federal funding for the holdout states.
That could create an incentive for existing expansion states to drop the ACA’s Medicaid expansion and pick up the new program instead. And any effort Congress makes to stop them could invite legal challenges.
“The case law in this domain is a bit of a moving target, and as we’ve seen over the past decade, there’s an awful lot of litigation over things pertaining to health reform,”said Nick Bagley, a professor at theUniversity of Michigan Law School.
But “if your goals are relieving health care cost burdens or expanding access to care, then it’s hard to do better on a dollar-for-dollar basis than buying coverage for uninsured people below the poverty line,” said Brookings’ Matt Fiedler.
What we’re watching: “I don’t see Medicaid as being on the radar of some of my friends in the caucus who seem to feel it’s more important to do Medicare,” Clyburn said. “I’m trying to get Medicaid on their agenda.”
“I’m tired of my party perpetuating … inequity,” he added. “Treating people according to their needs is what breaks the cycle.”