The Health Law

As Democrats Bicker Over Massive Spending Plan, Here’s What’s at Stake for Medicaid

Hours after the Supreme Court in 2012 narrowly upheld the Affordable Care Act but rejected making Medicaid expansion mandatory for states, Obama administration officials laughed when asked whether that would pose a problem.

In a White House briefing, top advisers to President Barack Obama told reporters states would be foolish to turn away billions in federal funding to help residents lacking the security of health insurance.

Flash-forward nearly a decade, and it’s clear to see the consequences of that ruling.

Today, 12 Republican-controlled states have yet to adopt the Medicaid expansion, leaving 2.2 million low-income adult residents uninsured.

Tired of waiting for Republican state lawmakers, congressional Democrats are moving to close the Medicaid coverage gap as they forge a package of new domestic spending that could run as high as $3.5 trillion over 10 years and would significantly enhance other federal health programs. But the cost is raising concerns within the party, and the competition to get initiatives in the package is fierce.

With Democrats controlling both chambers of Congress and the White House, health experts say this could be the only time such a fix to the “Medicaid gap” will be possible for many years.

“This is a last best chance to do this,” said Judith Solomon, a senior fellow with the left-leaning Center on Budget and Policy Priorities.

Here are six things to know about what’s at stake for Medicaid.

1. Who would be helped?

The adults caught in the coverage gap have incomes that are too high for them to qualify under their states’ tight eligibility rules that predated the 2010 health law but are below the federal poverty level ($12,880 a year for an individual). When setting up the ACA, Congress expected that people making less than the poverty guideline would be covered by Medicaid, so the law provides no subsidies for coverage on the ACA marketplaces.

About 59% of adults in the coverage gap are people of color, according to a KFF analysis. Nearly two-thirds live in a household with at least one worker.

The states that have not expanded Medicaid are Alabama, Florida, Georgia, Kansas, Mississippi, North and South Carolina, South Dakota, Tennessee, Texas, Wisconsin and Wyoming.

About three-quarters of those in the coverage gap live in four states: Texas (35%), Florida (19%), Georgia (12%) and North Carolina (10%).

2. Why haven’t states expanded?

Republicans in these states have listed a litany of reasons. They assert that Medicaid, a state-federal program launched in 1966 that today covers 1 in 4 Americans, is a broken system that doesn’t improve health, despite dozens of studies to the contrary. Or they say working adults don’t deserve government help with health insurance. They also complain it’s too expensive for states to put up their 10% share (the federal government pays the rest), and they don’t trust Congress will keep up its funding promises for expansion states.

Each time Medicaid expansion has made it onto a ballot in a Republican-majority state, it has passed — most recently in 2020 in Oklahoma and Missouri.

3. How would the Democrats’ plan work?

The House plan has two phases. Under the bill passed by the Energy and Commerce Committee, starting in 2022, people in the coverage gap with incomes up to 138% of the federal poverty level (about $17,774 for an individual) would be eligible for subsidies to buy coverage on the marketplace.

Enrollees wouldn’t pay a monthly premium because the tax credits would be enough to cover the full cost, according to an analysis by Solomon. There would be no deductibles to meet and only minimal copays, like most state Medicaid programs.

Help not typically available under the ACA would be offered. For example, Solomon’s analysis notes, low-paid workers wouldn’t be barred from enrolling in marketplace plans because they have an offer of employer coverage. In addition, people could enroll at any time during the year, not just during open enrollment season in late fall/early winter.

Phase two would begin in 2025. That’s when people in the coverage gap would transition to a federally operated Medicaid program run by managed-care plans and third-party administrators.

Enrollees would not pay any cost sharing in the federal Medicaid plan.

4. Would the coverage be as good as if the states adopted expansion?

It would be very close, Solomon said. The new plan would include coverage for all services defined by the law as “essential” health benefits, such as hospital services and prescription drugs.

One difference is coverage for nonemergency transportation services would not start until 2024. In addition, during those early years of the plan, some long-term services for medically frail people typically covered under Medicaid would not be included and some screening and treatment services for 19- and 20-year-olds would not be offered.

The first phase would also not provide retroactive coverage for the three months prior to application. Medicaid today covers medical expenses incurred in the three months before an individual applies if the person is found to have been eligible during those months.

One potential benefit of using the marketplace plans is they could have broader networks of doctors than those associated with Medicaid programs.

5. How much would it cost?

The Congressional Budget Office has not yet revealed estimates, although the price tag would likely be in the billions of dollars.

The federal cost for covering people by helping them buy marketplace plans is higher than it would be if the states had expanded Medicaid. That’s because marketplace plans generally pay higher fees to doctors and hospitals, making them more costly, Solomon explained.

6. Could states that have already expanded Medicaid rescind that policy and require residents to get coverage under the new setup?

The bill offers incentives for states to keep their current Medicaid options. If a state opts to stop spending funds on the Medicaid expansion, it may have to pay a penalty based on the number of enrollees that move to the federal program, potentially amounting to millions of dollars.


Apple, Bose and Others Pump Up the Volume on Hearing Aid Options, Filling Void Left by FDA

Spurred by decades of complaints about the high cost of hearing aids, Congress passed a law in 2017 to allow over-the-counter sales, with hopes it would boost competition and lower prices.

Four years later, federal regulators have yet to issue rules to implement the law. But changes in the industry are offering consumers relief.

In August 2017, President Donald Trump signed the legislation that called for the Food and Drug Administration to issue regulations by 2020 for hearing aids that could be sold in stores without a prescription or a visit to an audiologist or other hearing specialist. That hasn’t happened yet, and President Joe Biden last month ordered the FDA to produce those rules for over-the-counter (OTC) purchases by mid-November. That means it will likely take at least until next summer for consumers to feel the direct effects of the law.

Despite the delay, consumers’ options have expanded with more hearing devices entering the market, alternative ways to get them and lower prices, particularly for the largest segment of the population with impaired hearing — those with mild to moderate hearing loss, for whom the law was intended.

Leading consumer brands Apple and Bose are offering products and several smaller companies sell aids directly to consumers, providing hearing tests and customer service online from audiologists and other hearing specialists. Even major retailers offer hearing aids directly to consumers and provide audiology services online: Walgreens stores in five Southern and Western states sell what the chain calls “FDA-registered” Lexie hearing aids for $799 a pair — far less than half the price of typical devices.

Nationally, personal sound amplification products, or PSAPs, that are smaller and customizable are now available in stores and online. These devices, which look like hearing aids and sell for a fraction of the price, amplify sounds, but some do not address other components of hearing loss, such as distortion.

“There are many more options than there were in 2017 when Trump signed the Hearing Aid Act into law,” said Nancy Williams, president of Auditory Insight, a hearing industry consulting firm in New Haven, Connecticut. “In a sense, you can say the OTC revolution is happening without the FDA, but the difficulty is it is happening more slowly than if the FDA issued its rules on time.”

The price for a pair of standard hearing aids typically ranges from $2,000 to $8,000, depending on the technology. That price includes the professional fitting fees and follow-up visits. The hearing aid industry has remained largely insulated from price competition because of consolidation among manufacturers, widespread state licensing laws that mandate sales through audiologists or other hearing professionals, and the acquisition of hearing professionals’ practices by device makers.

The federal law creates a category of hearing aids that would legally bypass state dispensing laws and enable consumers to buy aids in stores without consulting a hearing aid professional. Users would be expected to program the devices through a smartphone, and companies could offer service via phone or internet.

With an increasing number of hearing aids and PSAPs being sold directly to consumers, advocates are eager for the FDA rules to come out, because they worry about the confusion caused by the array of choices — with none having the FDA’s full seal of approval.

“The FDA delaying regulations has done more harm than good, because the direct-to-consumer market is filling the void and people are doing what they want, and we don’t know the quality of these devices,” said Barbara Kelley, executive director of the Hearing Loss Association of America, a consumer advocacy group.

The law, sponsored by Sen. Elizabeth Warren (D-Mass.), gave the FDA until August 2020 to issue regulations. Last year, after missing that deadline, FDA officials said the covid-19 pandemic had delayed the rule-making process.

Many in the hearing aid industry are concerned about the unchecked competition likely to come with allowing consumers to buy aids on their own without an evaluation by a hearing specialist.

Brandon Sawalich, CEO of Starkey, the largest U.S.-based hearing aid company, said consumers need expert assistance to test their hearing, buy an appropriate aid, properly fit it and fine-tune its settings.

“It’s not just picking up something off the shelf at your local drugstore or ordering something online and putting it in your ear and your life is going to be reconnected and you are going to hear perfectly again,” he said on a recent podcast. “It doesn’t work that way, and it’s not that easy.”

However, by avoiding professional help, more Americans likely can get hearing assistance. “The OTC and direct-to-consumer options open up avenues for those who have no other path to get hearing aids,” said Hope Lanter, a Charlotte, North Carolina, audiologist with, a Netherlands-based online hearing aid retailer.

She expects that after the FDA issues its rules many hearing aid manufacturers will develop lower-cost, over-the-counter devices that can be obtained without an audiologist’s evaluation. She said consumers with modest hearing loss may start out with those types of aids, but later, if their hearing worsens, shift to more expensive devices that require assistance from hearing aid professionals.

“In my view, there is enough pie for everyone,” Lanter said, noting that millions of people with hearing loss are not getting any help today. More than 37 million American adults have trouble hearing, including nearly half of people over age 60. Only 1 in 4 adults who could benefit from a hearing aid have ever used one, federal health officials estimate.

Although implementation of a 2017 law seeking to spur over-the-counter sales of hearing aids has been delayed, consumers still have a growing choice of products they can buy directly from major retailers and leading brands such as Bose and Apple. Walgreens sells Lexie hearing aids in their stores in Arizona, Colorado, North Carolina, Tennessee and Texas. (Lexie Hearing)

Unlike most consumer electronics, hearing aids have remained expensive for decades, generating consumer complaints.

The price is concerning because Medicare and many insurers don’t cover hearing aids, though most private Medicare Advantage plans do. Only about half of state Medicaid programs cover the devices, but benefits in those states vary widely, according to data from KFF.

Industry experts predict new over-the-counter hearing aids will be priced at less than $1,000 a pair — about 25% lower than low-cost retailer Costco sells its Kirkland aids, dispensed through a hearing aid professional.

Without federal rules in place, manufacturers have largely waited to develop devices for the OTC market.

Bose chose a different path. This spring it began selling its hearing aids, which can be purchased online without a doctor visit, hearing test or prescription. Bose gained FDA clearance in 2018 after providing data showing the effectiveness of its self-fitting aids was comparable to that of similar devices fitted by a hearing professional. The Bose aids sell for $849 a pair.

Meanwhile, Apple last year integrated hearing assistance into its popular Air Pods Pro earbuds, which can be customized using settings on an iPhone. Apple is not marketing the free benefit as a hearing aid but instead as similar to a PSAP that amplifies sound to help hearing.

Several companies such as Eargo, Lively and Lexie allow consumers to buy aids online and get help from specialists to set them up remotely. As long as companies have generous return policies that enable people to try a couple of aids to see which works best, the proliferation of online options selling high-quality aids is good news for consumers, said Williams, the Connecticut hearing consultant.

Lanter said the stigma around hearing aids will be reduced as people obtain them more easily. She predicted consumers will someday buy hearing aids much as they can buy inexpensive reading eyeglasses at the drugstore today with the option to get a prescription for higher-quality glasses or ones with a more precise fit.

Michelle Arnold, an audiologist and assistant professor at the University of South Florida, said there is no evidence consumers will be harmed buying a hearing aid without seeing an audiologist, and the benefits of getting some improvement in their hearing outweigh any risks. “Will people get the maximum benefit? Maybe not, but it’s better than nothing,” she said.


Expanding Insurance Coverage Is Top Priority for New Medicare-Medicaid Chief

The new head of the federal agency that oversees health benefits for nearly 150 million Americans and $1 trillion in federal spending said in one of her first interviews that her top priorities will be broadening insurance coverage and ensuring health equity.

“We’ve seen through the pandemic what happens when people don’t have health insurance and how important it is,” said Chiquita Brooks-LaSure, who was confirmed by the Senate to lead the Centers for Medicare & Medicaid Services on May 25 and sworn in on May 27. “Our focus is going to be on making sure regulations and policies are going to be focused on improving coverage.”

It is an abrupt switch from the Trump administration, which steered the agency to spearhead efforts to repeal the Affordable Care Act and scale back Medicaid, the federal-state program for those with low incomes.

Brooks-LaSure, whose agency oversees the ACA marketplaces in addition to Medicare, Medicaid and the Children’s Health Insurance Program, said she is not surprised at the robust takeup of ACA insurance since President Joe Biden reopened enrollment in January. The administration announced last month that more than 1 million people had signed up already.

“Over the last couple of years, I’ve worked with a lot of the state-based marketplaces and we could see the difference in enrollment when the states were actively pushing coverage,” she said. A former congressional and Obama administration health staffer, Brooks-LaSure most recently was managing director at the consulting firm Manatt Health. “I believe that most people who are not enrolled want” coverage but may not understand it’s available or how to get it, she said. “It’s about knowledge and affordability.”

Brooks-LaSure also suggested the administration would support efforts in Congress to ensure coverage for the millions of Americans in the so-called Medicaid gap. Those are people in the dozen states that have not expanded Medicaid under the Affordable Care Act who earn too little to qualify for ACA marketplace coverage. Georgia Democratic Sens. Jon Ossoff and Raphael Warnock, whose GOP-led state has not expanded the program, are calling for a new federal program to cover those who fall in the gap.

Brooks-LaSure said she would prefer states use the additional incentive funding provided in the recent American Rescue Plan toward expanding their Medicaid programs, “because ideally states are able to craft policies in their own states; they’re closest to the ground.” But if states fail to take up the offer — none have so far — “the public option or other coverage certainly would be a strategy to make sure people in those states have coverage,” she said.

Also close on her radar is dealing with the impending insolvency of the trust fund that finances a large part of the Medicare program. Last year’s economic downturn and the resulting loss in employees’ withholding taxes is likely to accelerate the date when Medicare’s hospital insurance program will not be able to cover all its bills.

Brooks-LaSure said she is sure she and Congress will be spending time on the issue in the coming year, but those discussions could also provide an opportunity for officials to reenvision the Medicare program and consider expanding benefits. Democrats in Congress are looking at both lowering Medicare’s eligibility age and adding benefits the program lacks, including dental, hearing and vision coverage.

“I hope that we, when we are looking at solvency, really focus on making sure we keep the Medicare program robust,” said Brooks-LaSure. “And that may mean some changes that strengthen the program.”