A provision of a 2020 COVID-19 relief bill required that states keep people continuously enrolled in Medicaid through the end of the month in which the COVID-19 public health emergency ends in exchange for more federal funding.
The provision contributed to a 25 percent enrollment surge during the pandemic, but will end when the public health emergency does, prompting a year-long unwinding during which time the Kaiser Family Foundation estimates between 5 million and 14 million people will lose Medicaid coverage.
Among them: some 383,000 Americans in the 12 states that have declined to expand Medicaid since the 2010 health care law passed.
Those people will fall into the Medicaid “coverage gap” — they’re part of a group of 2.2 million people living in non-expansion states who make too much to qualify for Medicaid but too little to qualify for subsidized marketplace coverage under the 2010 law.
The Supreme Court ruled in 2012 that Medicaid expansion was optional, but 38 states and Washington, D.C., have capitalized on significant federal financial incentives and expanded their programs. Now, with the end of the public health emergency looming, advocates in the remaining states argue that expansion is a moral imperative with significant financial incentives.
“There are going to be a lot of low-income folks in the coverage gap after the public health emergency ends,” said Jane Adams, campaign director at the Cover Alabama Coalition, a group advocating for expansion in Alabama. “And it doesn’t have to be this way… It’s just bad governance not to expand.”
Opposition remains stiff.
“It’s about the state having autonomy over its money,” said Justin Bogie, senior director of fiscal policy at the Alabama Policy Institute, a conservative Birmingham-based think tank that opposes expansion. “It’s really the federalism principle – having that division of power, letting states choose how they allocate their resources without strings attached.”
The Scope of Loss
It’s not immediately clear when the unwinding will begin, though it could be as soon as mid-January. The Biden administration has promised to give 60 days notice before ending the public health emergency, which means they would likely alert the public by mid-November about their plans. Worries about a winter COVID-19 surge could spur the administration to renew the public health emergency.
But when the emergency does end, the Department of Health and Human Services projects nearly seven million people will lose Medicaid coverage despite still being eligible, in what’s known as “administrative churn” — the temporary loss of Medicaid coverage when enrollees disenroll then re-enroll during a short period of time for a variety of reasons, including renewal processes and short-term changes in income that make them temporarily ineligible.
Eight million others will be disenrolled because they no longer qualify for Medicaid and will need to seek coverage elsewhere, likely on health care marketplaces. Roughly 2.8 million of those people live in states that did not expand Medicaid.
Some will be covered by expanded health care law subsidies, which were extended through 2025 as part of the Democrats’ climate, health care and tax package (PL 117-169). But others, many of whom will be from vulnerable minority groups, will lose coverage.
“Yes, some people will be okay,” said Rep. Robin Kelly, D- Ill., a member of the Congressional Black Caucus. “But there will still be too many people that won’t be.”
Debate around Medicaid expansion is largely partisan. Republicans control the state legislatures in each of the 12 states that have opposed expanding Medicaid, though many Republican-led states have expanded.
On Tuesday, South Dakota – where former President Donald Trump won with more than 60 percent of the vote in 2016 and 2020 – could become the sixth Republican-led state to expand via ballot initiative, a move that state officials estimate could make 42,500 people newly eligible for Medicaid.
North Carolina’s Republican-led state House and Senate each passed bills this year in favor of expansion. Neither was adopted before the end of the 2022 legislation session, but the votes signal a potential ideological shift in a state long opposed to expansion.
‘That Ship Has Done Sailed’
The Public Affairs Research Council of Alabama estimates that expansion would cost the state an average of $225 million per year through 2027, but would result in more than $1 billion in savings during the same time period.
Despite the potential savings, conservatives argue the $225 million cost is steep in a place like Alabama, which has a general fund budget of roughly $2.7 billion. Alabama Gov. Kay Ivey, a Republican, has consistently expressed concern about the long-term costs of the program. Ivey did not respond to multiple requests for comment.
Bogie, of the Alabama Policy Institute, argued it’s unfair to future generations of taxpayers as federal investment in the program balloons. Federal Medicaid spending was $462 billion in 2022 and projected to rise by 2032, according to the Congressional Budget Office.
Bogie said Alabama Republicans also worry expansion could negatively impact the state’s workforce participation, which is among the lowest in the country, by removing the incentive to obtain employer-provided insurance.
The Biden administration has opposed efforts in several states to impose work requirements. Alabama in 2021 withdrew a proposal to establish work requirements for its traditional Medicaid population.
Even the Supreme Court’s June overturn of Roe v. Wade didn’t move the needle in Alabama, Bogie said. Concerns about uninsured mothers forced to carry their babies to term were mostly quelled when the state legislature allocated $4 million to extend postpartum coverage for Medicaid beneficiaries from 60 days to 12 months.
“I think that ship has done sailed,” said Republican state Sen. David Sessions, when asked on local radio in October about the prospect of expansion.
The Cliff
Expansion advocates, however, contend opponents may be forced to reconsider once the public health emergency ends and coverage loss becomes reality.
“When you don’t have families losing their coverage immediately, that makes it easier to not deal with the policy issue,” said Adam Searing, an associate professor at the Georgetown University School of Public Policy’s Center for Children and Families.
Members of the Congressional Black, Hispanic and Asian Pacific American caucuses raised concerns in an April letter to the Biden administration that Americans of color could suffer disproportionately.
More than half of Medicaid’s 73 million beneficiaries identify as Black, Hispanic, Asian American or another non-white race or ethnicity, according to the Medicaid and CHIP Payment and Access Commission, a nonpartisan legislative branch agency that provides policy and data analysis to Congress.
“The end of the public health emergency represents a cliff at which millions of AAPIs (Asian American Pacific Islanders) could find themselves without coverage,” Rep. Judy Chu, D- Calif., chair of the Congressional Asian Pacific American Caucus, told CQ Roll Call. “I am especially concerned about AAPIs in states which have not expanded Medicaid, leaving a coverage gap of up to 2 million people without access to affordable coverage.”
Congress has little recourse to address coverage loss, though they could pass legislation to extend pandemic-era levels of Medicaid funding for the duration of the unwinding period to ease administrative burden. But there is currently no proposal to do so.
The simplest, most effective response to ward off coverage loss is to expand Medicaid in the remaining non-expansion states, said Searing.
In Alabama, popular support for expansion is strong, according to a February 2022 poll conducted by Alabama Arise, a group affiliated with the Cover Alabama Coalition.
The group found that more than 70 percent of Alabama residents (65.8 percent of whom were registered Republicans) favor expanding Medicaid when given arguments in support of expansion.
Adams said the Cover Alabama Coalition hopes to build on those results and make another push for expansion after the November election. A key facet of the initiative will be meeting individually with Republican lawmakers to educate them on the potential benefits of Medicaid expansion and address any lingering ideological opposition to the 2010 health care law, Adams said.
“I’m optimistic,” Adams said. “We have a really strong coalition and we are going to be doing our due diligence to educate not only the public, but lawmakers, that the Obamacare they were scared about 10 years ago is not the same Obamacare today.”
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