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The unfinished promise of Medicaid enlargement

In November, Missourians voted to expand Medicaid under the Affordable Care Act to provide health insurance to around 230,000 people living in poverty. Now the republican state lawmakers are defying the will of their voters by refusing to implement enlargement.

In late April, the Missouri Senate blocked funding for Medicaid's expansion. Last week, Governor Mike Parsons referred to the lack of funding to justify withdrawing the expansion plan entirely.

Lawsuits are likely to be filed over Parson's decision. However, this is not the first time Republican leaders in a Conservative state have struggled to block voters' wishes for Medicaid's expansion. Utah lawmakers had attempted to scale back the expansion plan approved by their constituents in 2018, though they eventually agreed when the Trump administration said the legislature's alternative proposal was not allowed.

The pattern shows that nearly a decade after the Supreme Court ruled that states could decide whether to expand their Medicaid programs, the battle over it is far from over. To date, 38 states and Washington, DC have expanded Medicaid to nearly 15 million people. In the dozen states that do not, there are 4 million uninsured people who would receive Medicaid coverage if their state upgraded eligibility under the ACA. More than 95 percent live in the south, they are disproportionately black and many are not entitled to subsidies for the purchase of private cover in the ACA markets.

As I've reported on Medicaid's expansion, I've often heard proponents express optimism that at some point, someday, the holdout states will emerge. It took Arizona until 1982 to implement its Medicaid program, 17 years after Medicaid was approved as part of the LBJ's Great Society agenda. At some point, it is thought, the appeal of giving your voters the perks they need – and reaping billions of federal dollars – is too good to pass up. And proponents have made strides in deep red states. Voters in Idaho, Nebraska, and Oklahoma recently approved the expansion of Medicaid. It's also popular with voters in holdout states like Kansas and North Carolina.

But the Missouri controversy casts doubt on those hopes. Medicaid's expansion could hit a wall. The Affordable Care Act was incorporated into the Act more than 10 years ago and has become quite popular nationally. Medicaid's expansion won a critical vote in Missouri. The state has a budget surplus of $ 1 billion, the NPR found, but lawmakers and the governor cite budgetary concerns to block enlargement.

Texas and Florida, where more than 1 million uninsured people live in poverty, remain the two biggest holdovers. Florida voters will vote on a referendum to expand Medicaid in 2021, but state lawmakers have already shown a tendency to undermine initiatives that have been approved by popular vote. Texas, like some other states, cannot expand through an election initiative.

Biden and Democrats in Congress are trying to push holdout states forward and provide new incentives for states to expand. If these incentives don't work, however, the disparities in American health care will only worsen.

Medicaid's expansion saves states money and lives

Originally, the expansion of Medicaid, which historically had only affected a small proportion of people living in poverty, was supposed to be mandatory for all 50 states. The expansion of Medicaid should also be attractive for the states: The federal government initially assumed 100 percent of the costs and then went back to 90 percent in order to take over this portion of the tab in the long term.

The 2012 Supreme Court decision allowed states to opt out and turned the expansion into a state-to-state battle. Republicans typically have two objections to Medicaid's expansion: It's too expensive, and Medicaid isn't such a great program to begin with, and it's inferior to private insurance.

To allay financial concerns, the DC Democrats have tried to sweeten the offer even further in an attempt to seduce the holdout states. As part of the US rescue plan, Congress approved an additional 5 percent match for the traditional Medicaid populations (mothers, the disabled, the elderly, and those in extreme poverty) for holdout states that are now expanding Medicaid.

This improved match would take two years. Missouri, to take a relevant example, would bring in additional revenue of $ 1.7 billion over this period, according to estimates by the Center for Budgetary Policies and Priorities. Texas would receive nearly $ 6 billion; Florida, more than $ 3.5 billion. It comes as close to a (legal) bribe as you are likely to find it in public order.

The extra money shouldn't even be necessary. As health economists Jonathan Gruber and Benjamin Sommers wrote in the New England Journal of Medicine last year, states have been able to expand without adversely affecting their finances. By expanding Medicaid, they have cut other expenses – on uncompensated care, care for those in the judicial system, etc. – while the expansion is fully subsidized by the government.

"Medicaid's expansion appears to be a win-win situation from a states perspective," they wrote. "Millions of low-income adults receive health insurance and financial support to hospitals with safety nets without adversely affecting national budgets."

And while Medicaid beneficiaries sometimes have fewer provider options because fewer providers are taking on Medicaid because of its less generous payment installments, the evidence is clear that Medicaid's expansion is still benefiting patients and saving lives. Research convincingly shows that after Medicaid's expansion, people will have more access to care and better health. Cancer diagnoses come earlier and patients receive the prescriptions for drugs they need more often.

A 2019 National Bureau of Economic Research working paper concluded that states' refusal to expand Medicaid had resulted in more than 15,000 deaths in one year that otherwise would not have occurred.

One idea: take Medicaid out of the hands of the states

As a presidential candidate, Joe Biden had a plan to close the Medicaid expansion gap: create a new public insurance option and automatically enroll people who are in that gap. But whether because of the Senate's “budget voting” rules, disagreement between the parties, or fear of backlash from the healthcare industry, a public option doesn't seem on the table for the next two years despite the full democratic control of Congress and government stand the white house.

The Democrats attempted to offer the holdouts a new carrot in the form of the expanded funding included in the American bailout. Some states (Wyoming and Alabama in particular) have shown preliminary interest, but the new funding doesn't seem to fill the gap by itself.

I know the Biden White House wants to find a solution to the Medicaid expansion gap because I've spoken to aides about it. Navigating it is harder than it seems, however: if they go overboard these perks to hand out to holdout states, they may be challenged in court by states that have already expanded Medicaid and asked why they haven't can get the same offer.

The Missouri case should be enough to dissuade the Democrats from the idea that, in time, Republican states will simply willingly join the group. Some left-wing experts have long believed that the federal government should simply take full responsibility for Medicaid and remove those decisions (and tax responsibility) from states. Jon Walker made this case in the American Prospect at the start of Biden's tenure. Democrats are reportedly considering such a plan for their next legislative package, Politico's Susannah Luthi reported. The details have yet to be determined.

The health care of millions of Americans in poverty depends on it. Otherwise, the legacy of the Biden presidency could be new health insurance over the American bailout plan for millions of middle-class Americans – while the poor and uninsured still have to wait for a solution.

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