A rocky road for Medicaid

March 7, 2017

 

After 50 years of trying to patch over the health outcomes gap between affluent and blue-collar Americans, Medicaid received a considerable boost in 2010, when the passage of the Affordable Care Act expanded eligibility for the state-level insurance program. Despite a setback at the Supreme Court in 2012, when the expansion was made optional, Medicaid has grown substantially in the intervening seven years. But with the recent release of congressional Republicans’ ACA replacement plan, the program seems to be on the ropes. The bill would not only repeal Medicaid expansion by the end of Donald Trump’s term, but switch the entire program over to a block grant system, in which states would receive a fixed sum of money to cover all enrollees. The plan is worrying for governors and state legislatures across the nation. Thirty-two of the 50 states accepted Medicaid expansion. All but two of the nation’s current Democratic governors preside over states with the expansion. And despite congressional Republican opposition to Medicaid expansion, several conservative governors, including Florida’s Rick Scott and Ohio’s John Kasich, ultimately decided to accept federal funding to increase coverage in their own states. 


State officials have good reason to fear the disassembly of the Medicaid expansion. For Rust Belt states in particular, Medicaid proved essential to combating the opioid and heroin abuse epidemic. Ohio and Pennsylvania, which have some of the highest drug-related death rates in the country, both accepted the Medicaid expansion. In nearby Indiana, then-governor Mike Pence used Medicaid funding to stop an intravenous-drug fueled HIV outbreak. Other states chose to use the law to address long-term problems. California has long used Medicaid funds to cover the cost of managed care plans for needy patients, in the hope of improving health outcomes. Medicaid expansion allowed Sacramento to enroll many more low-income children and adults in these programs. The loss of funding in the replacement plan would make it much more difficult for states to take these steps. Under the block grant system, extra funding to address sudden upswings in demand, such as those caused by drug abuse, would be nearly impossible to obtain. And the end of Medicaid expansion will force states like California to cut services to the bone, making it difficult to invest in cost-reduction plans like managed care organizations.


The way forward is nothing if not treacherous. The ACA’s backers are doubtless disheartened to see a replacement plan emerge: the GOP was previously unable to agree on a single bill, and appeared incapable of channeling their dislike of Obamacare into legislation. But the intra-party divisions that characterized Republican health care policy for the last few month will not disappear overnight. The “movement conservatives” of the House Freedom Caucus may balk at the bill’s tax increases, and a provision barring federal funding to Planned Parenthood will be a third rail for purple-state Republicans in the Senate. Meanwhile, the ACA has enjoyed a recent spike in popularity. 
In the face of these problems, some states may pursue a different course altogether. Following in fellow liberal stronghold Vermont’s footsteps, California is weighing a bill to create a single-payer system, essentially abolishing private health insurance in the nation’s most populous and economically weighty state. While this might have once seemed like a pipe dream, the tumult of the last two years have shown that nothing is certain in American politics.

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