U.S. Congress

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.


Death in Dallas: One Family’s Experience in the Medicaid Gap

For years, Millicent McKinnon of Dallas went without health insurance. She was one of roughly 1 million Texans who earn too much to qualify for Medicaid in the state but too little to buy their own insurance. That is, until she died in 2019. She was 64 and had been unable to find consistent care for her breast cancer.

Lorraine Birabil, McKinnon’s daughter-in-law, said she is still grieving that loss.

“She was such a vibrant woman,” she said. “Just always full of energy and joy.”

Health insurance for roughly 2.2 million Americans is on the table as Congress considers a spending bill that could be as high as $3.5 trillion over the next decade.

This plan would extend health coverage to residents of the 12 states that have yet to expand Medicaid to their working poor through the Affordable Care Act. In those states, people who earn too little to qualify for Medicaid — but who can’t afford to buy insurance in the individual marketplace — are left in what’s referred to as the Medicaid gap. Like McKinnon, most of these people work in jobs that don’t offer affordable health insurance.

If Congress approves the measure, those individuals would have access to a health plan through the federal government.

This could be a lifeline to some of the 17.5% of Texans who are uninsured, the highest rate in the country.

McKinnon was a descendant of runaway slaves who settled in Chicago. As an adult, she moved to Dallas and worked in health care her entire career. Her last job was as a home health aide, taking care of the elderly and people with disabilities. Birabil said she didn’t make a lot of money, though, and didn’t get health insurance.

And that’s why, when McKinnon started feeling sick, she put off going to the doctor.

“She didn’t have the coverage,” said Birabil, a lawyer who served briefly in the Texas House of Representatives. “She was doing everything she could do to live a healthy lifestyle. And so, when she realized that something was wrong and she went to find out what it was, it turned out that it was stage 4 breast cancer.”

In the year after her diagnosis, she bounced around hospitals. Doctors would stabilize her and send her home. Without coverage, consistent treatment was hard to find. Her family looked for insurance but found nothing.

All they could do in the end was be there as she slowly died.

“At the time that we found out, you know, we were also pregnant,” Birabil said. “And she kept saying, ‘I just want to meet my grandbaby.’ And she didn’t make it.”

A month before her granddaughter was born, McKinnon died. She was months away from getting Medicare.

Birabil said the health care system her mother-in-law spent her life working in ultimately failed her.

Laura Guerra-Cardus, deputy director of the Children’s Defense Fund in Texas, said advocates like her have been pleading with state lawmakers for years to cover uninsured Texans.

“But purely political opposition from our highest leaders, the governor and the lieutenant governor,” she said, “is enough to block progress on an issue that is a basic right.”

That’s why Guerra-Cardus, and other health care advocates across the country, are now looking to President Joe Biden and Congress to fix this problem. The Democrats’ $3.5 trillion spending bill — Biden’s “human infrastructure” bill — includes money to cover the uninsured via the health insurance marketplace and state Medicaid programs.

Most of those who would benefit are people of color in the South.

“We are asking them to choose to make America a country that does not block health care from anybody,” Guerra-Cardus said.

The racial disparity is stark in Texas, where about 70% of people in the coverage gap are Latino or Black.

Jesse Cross-Call with the Center for Budget and Policy Priorities said this is the first time since the Affordable Care Act went into effect that Congress may have enough votes to address this issue.

“This really is the unfinished work of the ACA to ensure that everybody in this country who is poor or of moderate incomes has access to affordable health care coverage,” he said.

But this insurance lifeline is competing for money and attention with other priorities.

Politico reported that this plan could be curtailed as Democrats negotiate a trimmed-down version of the spending bill.

For example, some lawmakers have suggested they would be willing to scale back health coverage for people in the Medicaid gap to just five years.

U.S. Rep. Lloyd Doggett (D-Texas), chair of the House Ways and Means Health Subcommittee, said in a statement Tuesday that Congress “must permanently close this coverage gap” so people in the 12 Republican-controlled states are never again denied health care.

“Closing the coverage gap means getting access to a family physician, essential medicines and other health care for [millions] who have been left out and left behind for more than a decade,” he said.

Some Democrats have also raised political concerns that extending coverage in non-expansion states would reward the Republican leaders in those states that have blocked Medicaid expansion for years.

Guerra-Cardus said that argument “is so far from the point” when it comes to why Congress should address the coverage gap.

“This is about people who are dying and suffering from preventable, treatable illnesses in the 21st century in our rich country,” she said.

In every state where Medicaid expansion has been put on a ballot, it has been approved by voters, most recently in Oklahoma and Missouri.

This story is part of a partnership that includes KUTNPR and KHN.


The Checkup Is in the Mail? Soliciting Letter Carriers to Help Deliver Health Care

Two of America’s toughest problems can be tempered with one solution.

The baby boom generation is graying, creating an ever-larger population of older people, many isolated, whose needs the nation is ill equipped to meet or even monitor.

Meanwhile, the U.S. Postal Service has gone $160 billion into debt, in part as digital communications have replaced snail mail. This year it has requested two rate increases for stamps and other services, bringing the price of a first-class stamp to 58 cents. It is running an aggressive TV ad campaign, presumably to build support for Congress to step in with some kind of rescue.

So here’s a potential win-win solution: Have letter carriers spend less time delivering mail, much of which now involves fliers and solicitations. Instead, include in their responsibilities — “the swift completion of their appointed rounds” — home visits and basic health checks on the growing population of frail and elderly.

This may sound out-of-the-box, but it’s already done successfully and profitably in other countries, like France and Japan. Indeed, the idea that the USPS could get more involved in home health services — to fill a need and earn money — was suggested by the agency’s own Office of Inspector General in March.

So far, other solutions to fill the need for home health care have proved elusive. President Joe Biden proposed $400 billion in his initial infrastructure plan to improve services for the homebound elderly, a feature that Congress didn’t retain. But Democrats’ congressional reconciliation budget resolution, currently under debate, could allot money to the cause.

Meanwhile tens of millions of older Americans — the “old old” — are not so sick that they need a hospital but are unable to live safely at home without help. In Maine, the state with the oldest population, an estimated 10,000 hours of needed and approved home care is not provided every week because of a dearth of workers. That, for example, leaves patients with early dementia fending for themselves at great risk. People who need help preparing medicine or meals can be missing both.

Postal workers are already on virtually every block of America six days a week. They are “people people,” as the recent TV ads portray, often beloved by their customers.

Yes, letter carriers are already busy, in part because of the volume of package deliveries, which jumped during the pandemic. But what about scrapping the idea of everyday delivery? That too was suggested by the agency’s inspector general, a decade ago. Mail could be delivered just a few times a week, say, every other day. And on the off days, presto — we get a new on-the-ground home health workforce.

They could do home visits, to redress an epidemic of loneliness among older homebound Americans and check on whether a customer has an adequate supply of food and medicines. With a bit of retraining, they could check and record blood pressure, test blood sugar levels in people with diabetes and even administer pills.

Letter carriers already effectively serve as informal watchdogs, noticing if an older client hasn’t picked up mail, for example. In some parts of the country, that function is formalized under a voluntary program called Carrier Alert, in which the Postal Service notifies a participating service agency, noted Brian Renfroe, executive vice president of the National Association of Letter Carriers.

But the USPS could be paid, by the government or by individuals, for this and other valuable services.

In France, since 2017, families have been able to pay a small monthly fee to La Poste — about 20 euros or $24 — to have home check-ins for an older relative. The service, called Watch Over My Parents, offers one to six visits per week, and the postal worker reports the resident’s condition to the client each time.

Japan launched a similar postal program through a public-private partnership in 2017, to underwrite paid, monthly, half-hour visits (a friendly chat and health check) with members of the aging at-home population.

The post office’s essential functions — like delivering the federal government’s $1,200 pandemic relief checks, mail-in ballots and prescription medicines — are too important to lose. And USPS finances have improved recently, in part because of package deliveries and a $10 billion loan through the 2020 American Recovery and Reinvestment Act.

But when was the last time you ran to the mailbox to hear from a friend, check the news, or collect a bank statement or bill? It just makes sense financially and socially for the agency to evolve to meet the nation’s current needs.

Of course, this alone will not close the USPS’ $160 billion budget gap, the bulk of which resulted from a government mandate that it prefund the agency’s pension plan and, especially, its retiree health benefits. Without that, the USPS would have been in the black (often just barely) for about half of the years since 2006 — though, overall, it was nearly $10 billion in debt during the period.

Solving that requirement will take congressional intervention; changes will also be needed in a law that currently requires six-day-a-week delivery and generally precludes the USPS from offering “nonpostal” products. Bipartisan legislation introduced in the Senate this year seeks to loosen the latter restriction to help the USPS earn money from services of “enhanced value to the public” (like selling hunting and fishing licenses).

Today, the postal service delivers vast amounts of “junk mail,” also called direct mail. Companies spend about $167 annually on direct mail per person, yielding good returns, the industry says. But much of it ends up unread and unopened in the trash or recycling bin, an environmental nightmare.

Why not instead redeploy some of the U.S. Postal Service’s vast supply of human resources to deliver a service our aging population — and our country — desperately needs?