States weigh expansion of their Medicaid programs

Several push for more individuals to be covered while others balk because of cost

Participants hold signs during the Senate Democrats’ rally against Medicaid cuts in front of the U.S. Capitol on June 6, 2017. (Bill Clark/CQ Roll Call file photo)
Participants hold signs during the Senate Democrats’ rally against Medicaid cuts in front of the U.S. Capitol on June 6, 2017. (Bill Clark/CQ Roll Call file photo)
Posted February 5, 2020 at 6:00am

State officials are seeking to change health care coverage for the nation’s poorest individuals, with Democrats trying to expand Medicaid to cover more people while Republicans aim to save costs over time.

Democratic governors in at least three states with Republican-controlled legislatures are ramping up efforts to pass legislation to expand the program. At the same time, states like Michigan have begun implementing aspects of their requirements that people receiving Medicaid work, which could lead to fewer people being covered if that is upheld in the courts.

[Medicaid at issue in 2019 races for governor]

On the federal level, the Trump administration announced broad guidance last week allowing states to cap funding in exchange for added flexibility.
And voters in November could greenlight Medicaid expansion because of grassroots efforts by advocates for ballot initiatives in Missouri and Oklahoma.

Last year was one of the most active for Medicaid since states began expanding the program in 2014 under the 2010 health care overhaul, and this year promises a flurry of action as well. Changes in state Medicaid policy through legislation, the courts and the ballot box could have larger implications on the national level.

Legislative push

Democratic governors in Kansas, Wisconsin and North Carolina are pushing for Medicaid expansion.

“Democratic governors ran and won on the promise of protecting families’ health care, and they will fight for that commitment in office, even in the face of Republican opposition,” said Christina Amestoy, the Democratic Governors Association’s deputy communications director. “Our Democratic governors will do everything they can to get it done.”

Under the 2010 health care law, states can expand coverage to individuals earning up to 138 percent of the poverty level, with the federal government covering 90 percent of the costs.

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Kansas Gov. Laura Kelly announced a deal in January with the Republican state Senate Majority Leader Jim Denning that would expand Medicaid, including a work referral program and monthly premiums.

The state House passed a Medicaid expansion bill last year but was unable to reach an agreement with the Senate. Kelly said legislators “have the ability to bring this over the finish line in the early days of the 2020 session. I am calling on them to do just that.”

Wisconsin Gov. Tony Evers, like Kelly, ran on expanding Medicaid. Wisconsin is the only non-expansion state without a coverage gap, meaning the state covers individuals under Medicaid up to the federal poverty line and low-income individuals whose incomes are higher than that qualify for health insurance exchange subsidies. Wisconsin’s Medicaid structure does not get the state a higher match rate like under the health care law’s Medicaid expansion, so the state shoulders more of the costs.

Evers previously proposed expansion, but lawmakers rejected it. It faces a steep climb to passage again this year.

North Carolina Gov. Roy Cooper, who is up for reelection this year, similarly pushed for Medicaid expansion in the state’s budget last year, leading to a standoff with state lawmakers.

This year, a stand-alone Medicaid expansion bill could get state House support and would include a work requirement. The bigger hurdle in North Carolina will be gaining Senate support.

Changes taking effect

A number of state-level Medicaid policy changes are taking effect this year.
Two states, Utah and Idaho, began implementing Medicaid expansion in January. Both states, along with Nebraska, approved expansion by ballot initiative in 2018. Nebraska plans to roll out its expansion in October.

Utah’s expansion also has a strict work requirement. Unemployed people are supposed to participate in an online job test, training programs and the completion of 48 job applications within three months. If an unemployed Medicaid recipient does not live in an area that has at least 48 job openings, the person can seek an exemption. The work requirement will likely be challenged in court.

Idaho is awaiting approval of a 20-hour-a-week work requirement.
Michigan began implementing its work requirements in January after winning federal approval in December 2018. Eligible enrollees must complete 80 hours of qualifying activities per month. Failure to complete these requirements for three months within a calendar year could result in termination of benefits.

Michigan Democratic Gov. Gretchen Whitmer opposes the work requirements, which were approved by her Republican predecessor and required by law. The requirements were challenged in district court, but oral arguments have not yet been set.

“The governor had wanted to delay, similar to other states, given the pending litigation and administrative costs,” said Robin Rudowitz, co-director of the Kaiser Family Foundation Program on Medicaid and the Uninsured. But the state law required implementation.

Virginia, which flipped both its legislative houses to Democratic control in November, is expected to change its Medicaid expansion plans. Virginia implemented expansion last January and also submitted a waiver to include work requirements.

Republican state lawmakers had successfully pushed for the requirements before signing on to the expansion plan. But after the election, Democrats controlled both the Virginia legislature and the governorship for the first time in 26 years.

In December, Democratic Gov. Ralph S. Northam confirmed that the state would modify its Medicaid waivers. The state legislature is expected to rescind the work requirements.

Administrative watch

Last week, the administration revealed long-expected guidance encouraging states to apply for capped federal funding in exchange for more Medicaid flexibility.

States that participate would be able to share savings with the federal government and refuse to cover certain drugs like commercial health plans can do. Oklahoma GOP Gov. Kevin Stitt expressed interest in submitting a waiver.

The policy — which was criticized by Democrats, liberal advocacy groups and the pharmaceutical industry — will likely face litigation this year. Opponents worry it could lead to reduced services, more limited drug coverage and stricter eligibility that would result in enrollment declines.
The administration also will have its hands full defending its approval of several Medicaid work requirements in court.

The U.S. Court of Appeals for the District of Columbia Circuit dismissed Kentucky’s appeal in January. The court heard arguments last year over the federal approval of work requirements in Arkansas and Kentucky, but Kentucky’s new Democratic governor instructed the state to rescind its waiver.

A decision on Arkansas could come any day, as well as timing on oral arguments on the requirements in Michigan and Indiana. New Hampshire’s requirements were also blocked, and the state is waiting to learn if its appeal will be combined with another case.

Ballot measures

This fall, Missouri and Oklahoma voters could decide if their states should expand Medicaid coverage. The states are among 14 that have not adopted expansion, according to the Kaiser Family Foundation.

“People want to keep rural hospitals open. They want to bring back their tax dollars to make sure that people and their neighbors are getting health care,” said Chris Coil, communications director for The Fairness Project, which supported all of the recent Medicaid expansion ballot initiatives. “They want to create thousands of jobs in their communities, and that’s something that happens every time Medicaid expansion is passed.”

But some states are reluctant to expand Medicaid, citing the costs.

“The view amongst a fair number of Republican officeholders at the state level and the federal level is that the level of the expansion is too high. In other words, they are putting too many people on Medicaid, which is already a very, very large program,” said James Capretta, a resident fellow at the right-leaning American Enterprise Institute.

Missouri supporters of expansion hope to gather enough signatures by a May 3 deadline to force a ballot vote. Oklahoma completed its signature requirement last year.