Democrats seek new ways to expand Medicaid in holdout states

Congressional Democrats are pushing legislation that would expand Medicaid in states that have so far refused to do so, seeking to fill one of the major remaining holes in the Affordable Care Act.

There are currently 12 states where Republicans have refused to accept the expansion of Medicaid eligibility provided under ObamaCare, meaning 2.2 million low-income people are left without coverage they otherwise would have, according to estimates from the Kaiser Family Foundation.

Efforts to entice the holdout states to expand the program with financial incentives have run into a wall, so Democrats are now turning to the idea of having the federal government step in and provide coverage.

The details of how to do that, however, are still up for debate and pose thorny questions of cost and potential health care industry opposition.

Still, there is momentum for including a measure of some sort to expand Medicaid coverage in an upcoming legislative package consisting of President Biden’s priorities in the $2.3 trillion American Jobs Plan and $1.8 trillion American Families Plan.

“We’re unwilling to walk away without a solution and leave the disadvantaged empty-handed once again,” said Rep. Lloyd Doggett (D-Texas) while introducing a measure to allow Medicaid expansion in holdout states on Thursday. “They’ve been waiting for a decade; it’s time to cover them now.”

The idea has influential Democratic backers. The leaders of the Congressional Black Caucus, Congressional Hispanic Caucus and Congressional Asian Pacific American Caucus wrote to Biden on Wednesday urging him to include a Medicaid expansion measure in the American Families Plan, a package of bills on topics such as paid leave and child care. The original version did not include the Medicaid proposal.

“We must take advantage of this once-in-a-generation opportunity to bring affordable health care to all Americans,” the lawmakers wrote.

Sens. Raphael Warnock (D-Ga.) and Jon Ossoff (D-Ga.), whose victories in January allowed Democrats to take back the Senate, also voiced support last month for the Medicaid expansion idea.

“We cannot continue to allow Americans with low incomes to suffer any longer just because they live in a state that has been overcome by political obstruction,” Warnock and Ossoff wrote to Senate leaders.

There are competing proposals for how to go about extending Medicaid in the 12 holdout states.

Doggett’s bill would allow counties or other localities to go around their state governments to work directly with the federal government to expand Medicaid in that jurisdiction.

But Democratic committee staff and leadership have raised concerns that the legislation would cover people in only some parts of a state.

The House Energy and Commerce Committee, which has jurisdiction over Medicaid, is working on a different approach.

“The committee is continuing to work on a comprehensive solution to provide coverage to Americans who are trapped in the Medicaid coverage gap through no fault of their own,” a spokesperson for committee Democrats said. “Our priority is crafting a policy fix that provides coverage and access to care to everyone in the states that have not expanded and not limited to certain counties.”

Among the options Democrats are discussing is simply creating an entirely federally run Medicaid program in the holdout states or expanding the Affordable Care Act’s marketplaces to give heavily subsidized private coverage to people falling through the cracks.

Any new government-run option risks triggering opposition from health care industry groups, which worry that the payment rates from a government plan are lower than rates from private insurers and that the plan could be a step toward a public option becoming more widely available.

Doggett said his proposal could be a “backup” if the other options do not work out and that he had discussed it with White House officials.

“We just don’t want to walk away empty-handed again,” he said. 

The Energy and Commerce Committee said it had also asked the Congressional Budget Office to conduct a cost estimate of Doggett’s proposal at his request.

“There are different ways of doing it, we have to decide, we have to come up with a consensus,” Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) said in a brief interview.

The Medicaid push is part of a larger negotiation over which health care measures will make it into the package Democrats are crafting to bypass a Senate GOP filibuster using the fast-track reconciliation process.

The amount of savings from another health care priority, lowering prescription drug prices, will in part determine how much money is available to spend on health care measures. The options in the mix include the Medicaid expansion measure as well as extending enhanced financial assistance to reduce premium costs under the Affordable Care Act; adding dental, hearing and vision benefits to Medicare; and lowering the Medicare eligibility age to 60.

Some advocates see lowering the Medicare age to 60 as the least likely of those measures to be included, and it is also perhaps the most politically controversial since it opens up debate around a public option and a step toward “Medicare for All.”

In the Senate, Finance Committee Chairman Ron Wyden (D-Ore.) said he is also working on the Medicaid expansion issue but did not provide details.

“We continue to believe that so many vulnerable people are falling between the cracks,” he said. “I’m working on that.”