Why Not Partial Expansion of Medicaid Under Obamacare?
I have long argued that having the Centers for Medicare and Medicaid Services (CMS) allow for partial expansion of Medicaid under the Affordable Care Act (ACA) law would be the most cost-effective way to quickly address a great deal of the remaining uninsured problem in the United States. Medicaid in general could be the answer to the problems in the Exchanges/Obamacare overall.
Under the 2010 ACA, states could expand Medicaid to 135% of the federal poverty limit (really about 138% with various income set asides). Some states worried about expansions as the 90% federal funding does ramp down in the future and there could be the so-called “woodworking” effect, where many who were already eligible under lower income rules enroll (they come out of the “woodwork”)and further increase the rolls and costs. As a former state budget official, I share some of the concern given tight state budget climates and the fact that the Medicaid entitlement steals money from other priorities at the state level.
During the Obama years, CMS turned down some states’ efforts to do partial expansions, either to 100% of the federal poverty limit (FPL) or through alternative waivers. Obama’s CMS was being politically selfish as it wanted as many states as possible to expand all the way to show a huge Obamacare victory. Now, Trump’s CMS is taking the same position for a very different reason. The state of Utah was just denied the right to expand to 100% of FPL and receive 90% funding because Trump does not want to bolster Obamacare as a whole. CMS outright said so when it stated approval “would invite continued reliance on a broken and unsustainable Obamacare system.”
There is no question that CMS could do this if it wanted to as the agency has broad regulatory authority. And I am not sure how expanding Medicaid, a much more proven and cost-effective system than the Exchanges, has anything to do with the problems seen in the Marketplaces, some of them caused by Trump administration policies and others rooted in flaws in the overly generous law.
Utah could now relent and go to 135% of FPL. Idaho and Georgia were considering partial expansions, but could go to full ones, too. So this could actually backfire on Trump politically. Several other states were already turned down by either Obama or Trump.
The partial expansions make great policy sense and the Trump administration should recognize this. Under existing law, people can enroll on the Exchanges and obtain subsidies above 100%. This leaves many people who are above Medicaid limits in states in a “no man’s land,” unable to access Medicaid because of stingy eligibility rules and ironically not rich enough to get on the Exchanges. Giving states the ability to go to 100% if they can’t endorse 135% would provide options for all Americans. Most states have expanded to 135%, but there are still 14 holdout states. Some of them philosophically may never expand Medicaid, but some of them, like Utah, Georgia, and Idaho, would overcome their fiscal concerns if they could get a partial expansion.
According to the Kaiser Family Foundation, 2.5 million people are in that no-man’s land of being ineligible for any coverage. The policy position rejecting a partial expansion denies these Americans access to healthcare. It is a sinister political play now of two administrations, causing needless worry and pain for millions.
Marc S. Ryan is a healthcare consultant writing on the emerging healthcare landscape, health plan issues (including compliance and quality) and current healthcare events. He periodically writes on foreign affairs, current events, and politics as well.
