Policy

With Divided Congress, Health Care Action Hightails It to the States

Medicaid expansion was the biggest winner in last week’s elections

As health care debates raged over the last few years, Congress was smack dab in the middle. After Tuesday’s elections, most of the action moves to the states. (Bill Clark/CQ Roll Call file photo)

Newly-elected leaders in the states will be in a stronger position than those in Washington to steer significant shifts in health care policy over the next couple of years as a divided Congress struggles with gridlock.

State Medicaid work requirements, prescription drug prices, insurance exchanges and short-term health plans are among the areas with the potential for substantial change. Some states with new Democratic leaders may also withdraw from a multistate lawsuit aimed at killing the 2010 health care law or look for ways to curb Trump administration policies.

But last week’s biggest health care winner is undeniably Medicaid expansion, with upwards of half a million low-income Americans poised to gain insurance coverage following successful expansion ballot initiatives and Democratic victories in key governors’ races.

“In state health policy, it was a big election,” said Trish Riley, executive director of the nonpartisan National Academy for State Health Policy. “It was a year when many candidates had pretty thoughtful and comprehensive proposals.”

Boost for Medicaid expansion

Voters in three deep-red states — Nebraska, Idaho and Utah — bucked their Republican lawmakers by approving ballot initiatives to extend Medicaid coverage to more than 300,000 people.

Meanwhile, Democratic gubernatorial wins in Kansas and Wisconsin boosted the chances of expansion in those states. And Maine’s new governor-elect is expected to act quickly to grow the government insurance program when she takes office in January.

The election outcomes could bring the biggest increase in enrollment since an initial burst of more than two dozen states expanded Medicaid under the 2010 health care law in the early years of the landmark law’s rollout.

“This election proves that politicians who fought to repeal the Affordable Care Act got it wrong,” said Jonathan Schleifer, head of The Fairness Project, an advocacy group that supported the initiatives, referring to the 2010 health care law. “Americans want to live in a country where everyone can go to the doctor without going bankrupt.”

The successful ballot initiatives require state leaders to move quickly toward expansion. In Idaho, the state must submit an expansion plan to federal officials within 90 days of the new law’s approval, while Nebraska must submit its plan by April 1, according to the nonpartisan Kaiser Family Foundation. Utah’s new law also calls for the state to expand beginning April 1.

In Kansas, where Medicaid supporter Laura Kelly prevailed, state lawmakers passed expansion legislation last year only to have it vetoed by the governor. Meanwhile, Wisconsin’s new Democratic governor Tony Evers, who eked out a win over Republican incumbent Scott Walker, has said he will “take immediate action” to expand, though he faces opposition from a Republican-controlled legislature.

Expansions in the five states would bring the number of states that adopted expansion under the health law to 38, plus the District of Columbia.

Still, Democrats fell short of taking one of the biggest Medicaid expansion prizes — Florida — after Andrew Gillum’s defeat. The outcome of Georgia’s tight governor’s race was still unclear as of Monday, with Republican Brian Kemp holding a narrow lead over Democrat Stacey Abrams. Both Abrams and Gillum made health care, and Medicaid expansion in particular, central to their campaigns.

Florida might be a 2020 target for an expansion ballot initiative, along with other states such as Missouri and Oklahoma, according to The Fairness Project.

Expansion supporters also suffered defeat last week in Montana, where voters did not approve a ballot initiative that would have extended the state’s existing Medicaid expansion, which covers nearly 100,000 people but is slated to expire next year. However, state lawmakers have until June 30 to reauthorize the program, according to Kaiser.

In Maine, Democratic gubernatorial winner Janet Mills is expected to expedite expansion implementation. GOP Gov. Paul LePage stymied implementation over the past year, despite nearly 60 percent of voters approving an expansion ballot initiative in 2017.

Medicaid’s future

The midterm results carry other ramifications for Medicaid, including whether states embrace or move away from controversial work requirements backed by the Trump administration.

Gretchen Whitmer, a Democrat who won Michigan’s governor race, opposed the idea and could shift away from an existing plan to institute them that’s awaiting federal approval.

“This so-called work requirement is not for one second about getting people back to work. If it was, it would have been focused on leveling barriers to employment like opening up training for skills or giving people child care options or transportation options,” Whitmer said in a September interview with Michigan Radio. “It was about taking health care away from people.”

Kansas, Wisconsin and Maine also have work requirement proposals that new Democratic governors could reverse.

But experts also say it’s possible some states, including those with Democratic governors, could end up pursuing Medicaid work requirements if that’s what it takes to get conservative legislators to accept expansion like Virginia did earlier this year.

Nebraska Republican state senator John McCollister, who supports expansion, predicted recently that the legislature would fund the voter-approved expansion initiative. But he indicated lawmakers might pursue Medicaid work requirements too.

Marie Fishpaw, director of domestic policy studies at the conservative Heritage Foundation, warned that states expanding Medicaid would face challenges. She called expansion “a poor instrument for achieving the goal that they’re trying to achieve.”

A number of new governors, including Whitmer, could pursue the so-called “Medicaid buy-in” concept.

More than a dozen state legislatures, such as in Minnesota and Iowa, explored the idea in recent years, according to State Health and Value Strategies, part of the nonprofit Robert Wood Johnson Foundation. Nevada lawmakers passed a “Medicaid buy-in” plan last year that was vetoed by the governor.

There are a variety of ways to implement such a program, but the goal is to expand health care access by leveraging the government insurance program, such as by creating a state-sponsored public health plan option on the insurance exchanges that consumers could buy that relies on Medicaid provider networks. Illinois, New Mexico, Maine and Connecticut are among the states that could pursue buy-in programs, Riley said. States are considering the concept as a way to increase affordability and lower cost growth by getting more mileage out of the lower provider rates Medicaid pays, said Katherine Hempstead, a senior policy adviser with Robert Wood Johnson Foundation.

“So many [people] struggle with the affordability of health care,” Hempstead said. “That is an environment in which Medicaid buy-in opportunities could flourish.”

Health care law

This month’s election also carries implications for the future of states’ administration of the 2010 health care law.

States that flipped to Democratic governors could switch to creating their own insurance exchanges rather than relying on the federal marketplace, said Joel Ario, a health care consultant with Manatt Phelps & Phillips and the former head of the federal health insurance exchange office under the Obama administration. The costs of running an exchange have come down in recent years, so it’s potentially cheaper for a state to run its own, Ario said.

Trump administration actions, such as cuts in federal funding for insurance navigators that help consumers enroll and the expansion of health plans that don’t comply with the law, may make states such as Michigan or Wisconsin rethink use of the federal exchange, he said.

“If [the administration] continues to promote policies that really leave a bad taste in the mouth for Democratic governors, I think they’ll be asking questions,” Ario said.

States where governors and attorneys general offices went from red to blue are likely to pull out of a lawsuit by 20 state officials that aims to take down the health care law, he added.

Wisconsin’s Evers vowed that his first act in office will be to withdraw from the lawsuit.

“I know that the approximately 2.4 million Wisconsinites with a pre-existing condition share my deep concern that this litigation jeopardizes their access to quality and affordable health care,” Evers wrote in a letter he said he plans to send to the state attorney general.

Hempstead said that states with both Republican and Democratic leaders will likely continue to pursue reinsurance programs, which cover high-cost patients, to bolster their marketplaces.

Republican governors could also pursue waivers under a recent Trump administration guidance that allows states to circumvent some requirements of the health law under exemptions known as 1332 waivers. But experts say it’s too soon to know exactly what approaches states might take.

“It will be interesting to see what the 1332 guidance means and whether it opens doors for some things and not for others,” Hempstead said. States that shifted to Democratic governors could also look to ban some Trump-supported policies, such as expansions of short-term and association health plans that avoid the health care law’s rules.

States are also likely to take steps to address high prescription drug costs in the coming years, with a number of new governors wanting to improve transparency, explore drug importation from other countries and target price gouging, Riley said.

“There’s a long history of the states testing, fixing, tweaking and informing the national debate,” said Riley.

Get breaking news alerts and more from Roll Call on your iPhone or your Android.