At risk: Medicaid expansion
States that chose to continue covering that population would have to pony up the difference between the enhanced federal matching rate of 90% and their traditional Medicaid matching rate, which averages 57%.
In Pennsylvania, lawmakers would have to come up with $2 billion to $3 billion annually to sustain its Medicaid expansion if the current version of the American Health Care Act is enacted. West Virginia, which expanded coverage to 175,000 people, would have a $50 million gap to make up starting in 2020.
Healthcare leaders in Ohio, New Jersey, Pennsylvania and West Virginia predicted their states would terminate their expansions if Congress passed the AHCA with its Medicaid provisions intact. National experts said they see very few of the 31 expansion states having the financial capacity or political will to maintain the expansions to low-income adults if the bill’s large cut in federal funding is enacted.
The bill largely ends the federal government’s enhanced Medicaid contributions in 2020 to cover adults with incomes up to 138% of the poverty level. States that chose to continue covering that population would have to pony up the difference between the enhanced federal matching rate of 90% and their traditional Medicaid matching rate, which averages 57%.
That’s a huge worry for healthcare providers, who fear it would lead to a big jump in uncompensated care and reduced healthcare access for low-income adults. An estimated 14.5 million adults across the country have received coverage under the Affordable Care Act’s Medicaid expansion, which provided $73 billion in federal funding to the states in 2016, according to the Robert Wood Johnson Foundation.
At least eight states—Arkansas, Arizona, Illinois, Indiana, Michigan, New Hampshire, New Mexico and Washington—have laws requiring them to reduce or eliminate Medicaid eligibility and/or benefits for the expansion population if the federal government reduces its contribution.
“It’s almost beyond imagination that Pennsylvania’s Medicaid expansion could survive the reduction in enhanced federal funding,” said Andy Carter, CEO of the Hospital and Healthsystem Association of Pennsylvania, a state where nearly 700,000 people have gotten coverage through the expansion.
States would continue to receive the richer federal match for existing expansion enrollees who remained continuously in the program, but it’s projected the vast majority of those beneficiaries would cycle out of the program within two years, particularly given the bill’s requirement that they recertify eligibility every six months rather than the current annual requirement.
In Ohio, where 700,000 people have gained coverage in the expansion, the state would have to shoulder an additional $2.2 billion if that many people were still on the rolls in 2020. The state would likely turn to provider cuts to make up the difference. Already in this year’s budget proposal, Ohio reportedly plans to cut Medicaid rates for hospitals by 8% because of the uncertainties around ACA repeal. Over the next two years alone, Ohio hospitals would see a cut of more than $588 million.
That doesn’t sit well with Sen. Rob Portman (R-Ohio). “I’ve already made clear that I don’t support the House bill as currently constructed because I continue to have concerns that this bill does not do enough to protect Ohio’s Medicaid expansion population, especially those who are receiving treatment for heroin and prescription drug abuse,” he said.
The nonpartisan Congressional Budget Office projected in March that 5 million fewer people would be enrolled in Medicaid by 2026 due to the bill’s various Medicaid changes. It said that due to the smaller federal contribution, no new states would expand Medicaid and that “some” expansion states would no longer offer that coverage.
States would face a hard reality in 2020, said Deborah Bachrach, a partner at Manatt Health and a former New York state Medicaid director. Philosophically and politically they may want to support expansion. But they’ll ask, “Do I have the dollars to maintain coverage?” she said.