The provision within the Affordable Care Act (ACA) expanding Medicaid to low-income, childless adults has been one of the law’s most impactful strategies for lowering uninsurance rates and ultimately improving health outcomes. However, fourteen states have yet to adopt the Medicaid expansion, having refused federal money to offer coverage to childless adults up to 138 percent of the Federal Poverty Line (FPL). Recent attempts by policymakers in Utah, one of those fourteen states, to implement a more limited Medicaid expansion—a move that goes against the will of residents in the state who voted for expansion—ran up against challenges last week. Despite this, Utah Republicans are looking to continue pursuing curtailing Medicaid expansion. The ongoing efforts by Utah and other states like it highlight the need for a future Congress to do more to close the Medicaid coverage gap.
In 2012, when the Supreme Court reviewed the constitutionality of the ACA in NFIB v. Sebelius, the Court’s majority made the unprecedented argument that the federal government could not condition states’ continued participation in the existing, traditional Medicaid program on agreeing to expand Medicaid to all childless adults earning under 138 percent of FPL. In other words, states could choose whether they wanted to accept the expansion dollars, but would not lose existing Medicaid dollars if they refused them.
To date, fourteen states have refused billions of dollars in federal funding, leaving a total of 2.5 million people in the Medicaid coverage gap. Individuals earning between 100 and 138 percent of FPL may be eligible for subsidized private insurance on the ACA marketplace, but this coverage does not provide aid commensurate with that of Medicaid. Most people earning below the poverty line are left without access to Medicaid and are ineligible for any subsidies to buy private insurance. The gap disproportionately affects uninsured black adults, who are seven percentage points more likely to fall in the Medicaid gap than uninsured white adults.
To date, fourteen states have refused billions of dollars in federal funding, leaving a total of 2.5 million people in the Medicaid coverage gap.
Refusing the Medicaid expansion has cost lives—about 15,600 lives so far, according to recent research that compared health outcomes in states that have implemented expansion with those in states that haven’t. Refusal to accept the expansion has also harmed state economies by preventing the flow of billions of federal dollars from fueling their states, money which might have kept struggling hospitals in rural areas from closure. Other recent research showed that implementing the Medicaid expansion led to positive outcomes like earlier diagnosis and treatment of cancer, reduction in racial disparities in health outcomes, and broader positive social effects, including a reduction in evictions—all which the residents of states miss out on when their political leaders refuse federal dollars for expansion.
The Utah Saga
Voters understand the value in expanding Medicaid and have approved ballot initiatives to expand in several red and purple states where political leaders were reticent. In 2018, Utah voters passed a ballot initiative to expand the program. Republicans in the state legislature instead moved to ignore the will of voters by limiting the expansion, passing a bill to temporarily provide Medicaid to people only up to 100 percent of FPL by funding it at traditional federal Medicaid funding levels, which are less generous than the ACA’s support to states. The bill also included a cap on the number of people who could enroll, a stipulation that goes against Medicaid law but was approved by the Trump administration. The same policymakers also sent a waiver application to the Trump administration requesting that the federal government send Utah the more generous ACA Medicaid expansion match rate funds for their partial expansion, allowing them to permanently leave out people earning over 100 percent of FPL. The application also included other requested restrictions, including an unprecedented “per capita cap” on spending for each enrollee, as well as work requirements to participate in the program (restrictions that the Trump administration has encouraged but courts have repeatedly rejected).
In 2018, Utah voters passed a ballot initiative to expand the program. Republicans in the state legislature instead moved to ignore the will of voters by limiting the expansion.
Last week, the administration refused the waiver request that would have allowed Utah to continue to leave out coverage for people between 100 percent and 138 percent of FPL, but to receive the ACA’s more generous federal funding level—reportedly because federal officials are currently refusing to defend the constitutionality of the ACA as a whole in a separate case.
Presumably, the waiver refusal should trigger the voter-approved full expansion of Medicaid, covering all those left out of the partial expansion. But Governor Gary Herbert instead immediately responded to the refusal by saying that Utah lawmakers would continue pursuing the other portions of the waiver asking for the imposition of per-capita caps for Medicaid participants, as well as the request to include work requirements for enrollees. These proposals would be harmful and counter to the Medicaid program’s intentions, and while the Trump administration should immediately refuse them, how it will respond to Utah Republicans’ plans remains unclear.
Federal Action Needed
The back-and-forth between Utah legislators and federal health officials highlights the need for more Congressional attention to closing the Medicaid gap: ongoing efforts to push lagging states to expand coverage are critical, but Congress can also take action to bring those last states along. While the Supreme Court limited what Congress can do to push states to expand their Medicaid program, it did not end Congress’ say on the matter.
In fact, Congress has the power to take a number of steps to encourage states to expand their Medicaid program within the bounds set by the Supreme Court. It can offer more generous terms of expansion for all states, or link other new funding to expanding Medicaid. It can even pull some of the state autonomy over Medicaid programs if they refuse expansion by putting more of the program under federal jurisdiction. Or Congress can go in the opposite direction, moving Medicaid into local hands by sending matching aid dollars directly to cities and counties.
The debate around public coverage expansion proposals (including Medicare for all, Medicare and Medicaid buy-ins, and public option proposals) also provides Congress with an opportunity to ease the pathway to Medicaid expansion, and it is critical that those proposals ensure that any future new system they propose takes steps to fill the coverage gap. Right now, some, but not all, proposals create new free or discounted coverage options for people earning under 138 percent of FPL.
Certainly, with Trump in the White House and a divided Congress, positive federal action on Medicaid is not imminent. But it should be at the forefront of discussion when health care reformers have the political window to take action and reverse the inherently political decisions state leaders have made to leave behind constituents who need coverage most.