Democrats go after Medicaid holdouts

By | February 1, 2019

House Democrats are preparing to reshape and reframe Obamacare’s optional Medicaid expansion to force holdout red-state governments to go along with it, using either the carrot or the stick.

A senior Democratic aide described the planned strategy as a “two-pronged approach of increased legislative incentives to adopt the expansion and increased public pressure on states who haven’t.”

One idea, the aide said, would be to let states get more funding to expand Medicaid to poor people even if they started the process several years after Obamacare originally intended. That would help “expose the Republican states’ refusal to expand as political and self-harming.”

The other part would be “using the spotlight of our committees to turn up the heat on states that are hurting their own populations by refusing to expand or by seeking waivers that will hurt current Medicaid enrollees.”

Fourteen states haven’t opted to expand Medicaid as part of Obamacare and thus can expect to feel the heat from House Speaker Nancy Pelosi of California and other Democratic leaders.

Proponents of the new strategy fear that if Congress doesn’t act, the states will not expand Medicaid and millions more people will stay uninsured. Altogether, 4.2 million more people would qualify for insurance through Medicaid if all states were to expand the program, according to the Kaiser Family Foundation, adding to the roughly 17 million who have been enrolled via Obamacare so far.

A handful of states have undertaken Medicaid expansion in recent years, thanks to ballot measures, Democratic victories, or pressure from the hospital industry. Democrats want to speed up that process.

As originally written, Obamacare was meant to expand Medicaid in every state, guaranteeing coverage to people making roughly $ 17,000 a year or less. A 2012 Supreme Court ruling made the provision optional, and many states rejected it for fiscal or political reasons.

In particular, Republican state lawmakers have argued that their states can’t afford to expand Medicaid, citing the rules in Obamacare that say states have to pick up 10 percent of expansion costs by 2020, leaving them holding the bag for billions of dollars in extra spending. Initially, the federal government paid for the full cost of expansion.

Democratic lawmakers are trying to nullify Republicans’ cost arguments. Reps. Terri Sewell, D-Ala., and Marc Veasey, D-Texas, for instance, have proposed providing federal funds for all of the expansion for the first three years, even for states that sign on late. In other words, they are offering states the same sweeter deal that was originally part of Obamacare, even if the states are holdouts.

Former President Barack Obama proposed a similar deal in his 2017 budget, and Democratic Sens. Mark Warner and Tim Kaine, both of Virginia, previously introduced the States Achieve Medicaid Expansion Act toward that goal.

The organization Young Invincibles, which works to help adults under the age of 35 enroll in coverage, welcomed the idea.

“I think it seems like a practical way to encourage states to expand the Medicaid program,” said Erin Hemlin, national director of training and consumer education for the group.

The bill is just one option Democrats could pursue. Alternatively, Congress could decide to give all states more money or pay for more of the Medicaid expansion for longer.

Emma Sandoe, a Medicaid researcher at Harvard University who worked for the Department of Health and Human Services during the Obama administration, said she was skeptical that more federal funding would be enough to bring some states along.

“The reason so many states decided not to expand Medicaid wasn’t the funding — it’s purely political,” she said in a Twitter message. “So aside from a recession, I’m not sure there would be any policy that would serve as anything more than an elimination of potential arguments against Medicaid expansion.”

Under the original law, the federal government would have cut off all Medicaid funding from states that didn’t go along with the expansion, but the Supreme Court ruled that provision unconstitutional.

Federal Democrats still have options for pressuring state lawmakers. The Century Foundation think tank came up with a list of menu items for altering the Medicaid expansion to make it harder for states to resist, including allowing states to accept a new healthcare program in the future only if they have expanded Medicaid, penalizing states that don’t expand, and allowing cities and counties to expand. The ideas were detailed in a report co-written by former Obama administration official Jeanne Lambrew, who helped implement Obamacare.

Proposals to sweeten the deal for states could backfire, either by angering lawmakers who already expanded Medicaid under less favorable terms or by prompting even stiffer resistance from red-state holdouts. Certain state Republicans, for instance, already suspect that federal policymakers will someday alter Obamacare and discontinue Medicaid funding and therefore view the promise of even more funding as deceptive.

“It may serve to just fire them up,” said Sam Adolphsen, vice president of executive affairs at the conservative Foundation for Government Accountability. “They know what’s best for their state. … I don’t think being threatened by Nancy Pelosi is going to move them off that position.”

Some state lawmakers have complained that their portion of Medicaid spending has turned out to be higher than they expected, and conservatives argue that funding benefits for healthy, nonelderly adults is a misallocation of resources. They maintain that Medicaid should be reserved for people with disabilities, pregnant women, and older adults.

“Regardless of whether states can grab up a bunch of federal money, they should be making sure their citizens can get back to work, not pushing them onto a welfare program,” Adolphsen said.

The Trump administration has approved state plans to require Medicaid beneficiaries to work, take classes, or volunteer to stay enrolled in the program and is considering letting states scale back Medicaid to cover people making roughly $ 12,000 or less.

Obamacare advocates don’t expect to find Republican support for Medicaid expansion. Organizations like Families USA, an advocacy group which supports Obamacare, would be open to the idea of allowing some states to implement a partial expansion for the very poor as favored by Republicans rather than no expansion at all, but are concerned that giving them that authority would then cause other states to try to scale back.

“I think we would be incredibly supportive of an idea that could get potentially bipartisan support and pass and would drive state expansion decisions in nonexpansion states, but I think that’s hard to do,” said Eliot Fishman, senior director of health policy at Families USA.