Can Medicaid Expansion Survive?

Amid fresh political rancor and legal machinations in the ongoing war over the Affordable Care Act (ACA), there’s a bright spot: Medicaid. At least for now.

This matters. True to predictions made by Obama and supporters when the ACA became law (2010), it has taken years and a lot of blood, sweat and tears to get to this moment.

As a reminder, the U.S. Supreme Court in 2012 ruled that states could opt out of the ACA’s Medicaid expansion—leaving each state’s decision to participate in the hands of governors and state lawmakers.

On June 7, after a 4-year pitched political battle, Virginia became the 33rd state (plus DC) to expand Medicaid under the ACA. The Virginia expansion is projected to encompass 400,000 low-income Virginians.

The state swung in favor of expansion after Democrats gained the governorship and more seats in the legislature in 2016. But, importantly, key moderate Republicans relented.

Four other non-expansion states could join Virginia over the next year or two. They are Maine, Idaho, Utah, and Nebraska. Three of those states are politically conservative. One, Maine, is a purple (politically divided) state.

In Maine, the fight is bitter as it lurches towards possible culmination this summer.  Whether events in Maine presage developments in the three other states’ is unknowable right now—but disconcerting.

Maine voters last fall, in a statewide referendum, voted (59% to 41%) to expand Medicaid. The vote was legally binding and the expansion was set to begin on July 2. But Republican governor Paul LePage and the state’s health department refused to implement and fund the expansion.

The Maine Superior Court earlier this month (June) ordered LePage to do so as the state formally appeals the ruling. As of June 19, LePage was refusing to comply with the court’s ruling unless and until the state legislature budgets the money for the expansion. He requested that the expansion be put on hold pending its legal appeal.

The court is unlikely to agree. Plus, LePage is term-limited and leaves office in January. Still, he and the state could appeal the issue to a higher federal court even as he’s forced to implement the expansion. His successor could reverse that path, however.

A projected 70,000 Mainers with incomes at or below 138 percent of the federal poverty level would get coverage under the expansion.

In Utah and Idaho, ballot measures similar to Maine’s are set for November, with support for expansion steadily increasing in both states. In Nebraska, an effort is underway this summer to get enough signatures for a ballot measure, and is expected to succeed.  (Note: Montana currently participates in Medicaid expansion but the program sunsets in 2019. A binding ballot measure is planned in that state, too.)

If grassroots efforts in all four states are ultimately successful, that would leave 14 states still refusing to expand Medicaid. You can find a state-by-state status update at kff.org and here.

In many of those 14 states, public opposition to Medicaid expansion is eroding.  In particular, attention is focused on Florida and Kansas. In Kansas, GOP Gov. Sam Brownback stood in the way of expansion over the last four years despite support for it in the state legislature. But he recently left office to become Trump’s ambassador at large for international religious freedom. Candidates now vying for the Kansas governorship are favorably inclined to expansion.

In Florida, with GOP Gov. Rick Scott term-limited (and now running for a Senate seat), the Medicaid expansion is front and center in the run up to that state’s Aug. 28 gubernatorial primaries. The Democratic candidates support Medicaid expansion. The Republican candidates do not. Polls show the public increasingly leaning towards expansion.

The benefits of Medicaid expansion are manifest. It’s beyond the scope of this piece to discuss them at length, except for the obvious: Of the roughly 20 million who have gained coverage under the ACA, about half obtained coverage through Medicaid. Medicaid now covers 72 million people, 20 million more than Medicare.

Still, 29 million Americans lack health insurance. If all the states that have not yet expanded Medicaid did so, an estimated five to seven million low-income people would gain coverage. The biggest gains would come in Texas, Florida, North Carolina, and Wisconsin.

For a fuller analysis of the benefits of Medicaid expansion—beyond just insurance coverage—see this piece by the Kaiser Family Foundation.

Despite the positive trend towards expansion, old threats still loom over Medicaid and new potentially dangerous ones have emerged.

Republicans in Congress still want to block grant the program—that is, give states a set amount of federal Medicaid dollars and weaken the entitlement status of the program. A small but vocal band of Republicans also still want to repeal the ACA, which would repeal the Medicaid expansion and take the program back to 2009 status and coverage standards.

Both of these initiatives are unlikely, and increasingly unpopular in public polling. Strong opposition to Medicaid changes was one reason Republican efforts to repeal the law failed last year.

Indeed, the outcome of this fall’s elections could yield the final nail in the coffin for any future repeal and replace effort.

The newer attempts to undermine Medicaid are more ominous. They are:

(1) Republican initiatives in a batch of red states, with the Trump administration’s approval, to require Medicaid recipients to work or do community service.

Kentucky was the first to win federal approval, in January, to advance and test a work requirement. Approvals followed for Indiana, Arkansas and New Hampshire. Seven more states—Arizona, Kansas, Maine, Mississippi, Ohio, Utah and Wisconsin—have work-requirement applications pending. And several other states are poised to join them.

Proceedings in a lawsuit to block Kentucky’s program (which also includes premium payments, cost-sharing, and a lock-out clause) began on June 15 in a D.C. federal court.  The National Health Law Program, the Kentucky Equal Justice Center and the Southern Poverty Law Center brought the suit. These groups argue that HHS has no legal authority to approve state waivers (experiments) that require people to work as a condition of obtaining Medicaid.

The judge said he’ll rule by the end of this month. The Kentucky program is supposed to launch July 1. Notably, Kentucky Gov. Matt Bevin (R) has threatened to eliminate the state’s Medicaid expansion if the work requirements aren’t put in place.

The court’s ruling is expected to affect proposals in all the other states and determine how far the Trump administration can go in changing Medicaid without congressional action.

Trump during the 2015-16 presidential campaign pledged not to touch Medicaid.  And top administration health officials say the work requirement is meant to help enrollees find and keep jobs. But critics say the requirement is not only illegal but edges very close to the ultra conservative view that Medicaid is a welfare and not a health insurance program.

Analyses also unanimously show that the work requirement would reduce Medicaid enrollment over time. Kentucky’s own projections show that 95,000 current Medicaid enrollees would lose coverage within five years.

(2) The Trump administration on June 7 said it would not defend the ACA against a pending legal challenge by 20 Republican-led states that the law is unconstitutional absent the individual mandate, which Congress neutered last year (by terminating the penalties on individuals and families for not having health insurance).

The action sparked immediate and intense debate, and legal confusion. For example, were the 20 states to prevail, would the entire law be thrown out? Or just the part that set up the exchanges?

The Justice Department letter announcing the legal position said that other parts of the ACA that can be “considered legally distinct” from the insurance mandate might survive. But the lawsuit by the 20 states claims that once the “heart of the ACA—the mandate” is declared unconstitutional, “the remainder of the ACA must also fall.”

That would, of course, include the Medicaid expansion.

The Trump administration further clarified on June 8 that the part of the law protecting people with pre-existing conditions who have private sector coverage—no matter where they get that coverage, including through an employer—would be nullified if the lawsuit were successful.

On June 14, multiple health care stakeholder groups—representing hospitals, doctors, insurers, patients and consumers—filed legal briefs in the federal court in Texas where the case is being heard. All forcefully disputed the argument that the ACA, in total or in part, was unconstitutional. All claimed that striking down the law would have profound negative economic, health and personal financial affects encompassing tens of millions of people.

It boggles the mind, strains legal precedent, and freezes the heart to imagine this legal threat will succeed. If it fails, one can only hope that Republican lawmakers will begin to see the writing on the wall: this isn’t just about politics anymore. It’s people’s lives. Some red state lawmakers have already gleaned that.

Steven Findlay is an independent health policy analyst and journalist