The midterm election of Democratic governors in states like Kansas, along with three successful Medicaid expansion ballot initiatives, laid the groundwork for the first serious expansion debates in a number of states. Yet, when combined with recent court rulings striking down Medicaid work-requirement programs in Kentucky and Arkansas, and an administration intent on reforming the program created to serve the nation’s most vulnerable people, a perfect storm of uncertainty has been created.
In this post, we offer updates on select state Medicaid activity, and consider still-unsolved questions surrounding pending federal and state efforts to expand, or restrict, Medicaid.
While Utah voters passed full expansion via ballot initiative in November, the legislature recently passed a partial expansion bill that was then signed by the governor, essentially negating the ballot initiative. It’s important to note that the new expansion legislation does not meet the parameters for expansion set forth by the Affordable Care Act (ACA). Under the Utah law, Medicaid coverage would be extended to people with incomes up to 100 percent of the federal poverty level (about $12,500 for an individual), rather than 138 percent of the poverty level (about $17,000 for an individual), the income threshold in the ACA. The partial expansion will cover 50,000 to 60,000 fewer people than the full expansion approved by voters in November 2018.
Under the ACA, states that expand Medicaid eligibility to people with income up to 138 percent of the federal poverty level are eligible for an enhanced match through which the federal government would cover 90 percent of the cost of expansion in 2020. While the Centers for Medicare and Medicaid Services (CMS) approved Utah’s waiver for a partial expansion, it did not grant Utah an enhanced federal match. To date, no state has been granted approval for enhanced federal funding for a partial expansion. Utah plans to apply again for the enhanced match. Without it, Utah will pay a larger share (32%) of the cost. Utah also has requested altering how the federal government will pay for Medicaid, effectively limiting federal contributions.
In Idaho, another state where voters approved full expansion, legislators have been taking steps to modify the law by adding work requirements and other provisions. After the recent federal court rulings preventing Arkansas from enforcing its work requirement and Kentucky from implementing its own, the Idaho Senate changed course and passed a work requirement bill that would increase copayments for individuals who fail to meet the requirement rather than locking them out of coverage.
Nebraska, which approved Medicaid expansion by ballot measure, announced a plan this week to add work requirements with more generous benefits for those who meet the requirement, rather than a coverage lock-out for those who don’t. The state probably will not begin enrollment for newly eligible individuals until after the Centers for Medicare and Medicaid Services (CMS) approves the waiver request, with a launch date set for October 2020.
Like Utah, Georgia’s governor has signed a bill authorizing partial expansion and will likely seek the enhanced federal match that comes with a full expansion. The difference in enrollment between full and partial expansion is even larger in Georgia than in Utah. In Georgia, 470,000 people would be covered under full expansion compared to 240,000 under the approved partial expansion. Again, it is not clear if the federal government will allow the enhanced match for partial expansion as no states have been approved for this.
North Carolina and Kansas
Governors in North Carolina and Kansas have voiced support for expanding Medicaid, but with Republican majorities in each state’s legislature, it has been difficult to move legislation forward. In North Carolina, legislation to expand Medicaid to approximately 500,000 people has yet to be debated. A Republican is expected to introduce an expansion bill, similar to a 2017 bill that had bipartisan support, in the North Carolina House in the coming weeks. However, leaders in the North Carolina Senate currently oppose Medicaid expansion.
Kansas legislators were able to advance a bill to expand Medicaid eligibility to approximately 150,000 state residents with bipartisan support through the House. Medicaid expansion would bring over $600 million in new federal funding to the state in 2020. But, as in North Carolina, leaders in the Kansas Senate have voiced opposition to the bill, which also has yet to be scheduled for hearings.
The recent federal court decision halted the work-requirement waivers in Arkansas and Kentucky, though it doesn’t close the door on the possibility that they could be approved under a waiver in some form. Leaders in Arkansas and Kentucky plan to continue pushing for their work requirements to be reinstated. Several other states also are continuing to move forward. For example, Utah was undeterred and began enrolling people in the partial Medicaid expansion, which includes CMS-approved work requirements, and a limit on how many people can be enrolled.
Yet, other states are reassessing work requirements. Iowa suspended debate on a proposal to add them to the state’s Medicaid expansion shortly after the rulings were announced. New Hampshire lawmakers were considering ways to limit the impact of work requirements, set to begin this summer, prior to the rulings. Shortly after the announcement, the New Hampshire Senate passed a bill to automatically suspend the work requirement if more than 500 people lose coverage.
Requests for changes to federal funding for Medicaid have implications for all states, especially those requesting partial expansion. As evidenced by activity in Georgia and Utah, states remain interested in enhanced funding for a more limited Medicaid expansion even though CMS has denied previous requests.
Meanwhile, Utah is requesting per capita caps and Tennessee, a nonexpansion state, is considering a plan to fund Medicaid through a block grant, or a fixed annual payment. Analysis suggests block grants and per capita caps would lead to coverage denials, scaled-back benefits, and reductions in provider payments. It is not clear that CMS has the authority to approve waivers capping federal contributions to Medicaid.
States have long been laboratories for experimenting with new policy ideas and are continuing to explore and advance innovative Medicaid proposals. The current administration has opened the door for more options with new flexibilities and guidance. However, it remains to be seen whether states, as they experiment, will remain true to Medicaid’s core goal of providing health coverage for people with low incomes.