Medicaid on the Chopping Block: Coverage for Millions at Stake

A young woman stressed because of bills.

According to the Congressional Budget Office, about 10 million people are newly enrolled in Medicaid because of the Affordable Care Act. In total over 20 million people are now getting their health coverage through Medicaid, private insurance subsidies and other provisions of the Affordable Care Act. With the results of the current election, health insurance for every single one of these people is suddenly at risk. Despite the call of “repeal and replace,” plans to repeal have been drafted in the past with huge cuts to Medicaid, a block grant, and the repeal of the ACA expansion which will result in millions losing coverage.

Incoming President Trump has said: “I am going to take care of everybody. I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.” But will this rhetoric match up with Congressional action and the reality on the ground?

Lessons from earlier health debates

Twenty years ago, I started my career leading a consumer health group in North Carolina. One lesson I learned almost immediately: While Medicaid was a large budget item and a frequent target of newly-elected policymakers who came to the state capitol determined to “cut Medicaid health spending,” the fire for making those cuts dimmed when they realized how difficult it would be.

Then, as now, many policymakers found it easy to talk about repeal of “unnecessary health coverage,” “creating better, efficient programs” and the elimination of “waste, fraud and abuse.” I would then watch a parade of impartial legislative analysts patiently walk lawmakers through the options and realities of the Medicaid and Children’s Health Insurance systems. Administrative costs in the low single digits. People in nursing homes, severely disabled children, pregnant women, premature babies needing extensive care and so on. Services delivered simply not available under private insurance plans and people served who would never have a hope of getting the care they needed anywhere else. And, finally, groups of hospitals, nursing homes, community health centers, pediatricians, family doctors and more from every corner of the state, including the hometowns of these newly elected, newly empowered politicians, also carefully explaining the cost to their own communities not just in care undelivered but jobs lost and health options closed for everyone.

Today I believe that the reality of actually cutting health care to millions of children, parents and individuals who have benefited from the Affordable Care Act, Medicaid and the CHIP programs will be equally as difficult. Campaign talk is cheap, but governing is hard.

While the final outcome is completely uncertain, even this week there are signs that the dynamics I outline above will come into play.

Technically of course, repeal of major parts of the Affordable Care Act, elimination of Medicaid expansion coverage, and the cutting or “block granting” of Medicaid could be accomplished relatively quickly. Republicans passed a bill that did much of this last year that was vetoed by the President. In fact, Vox’s Sarah Kliff has a great summary of the likely legislative options on tap for enabling a repeal.

Worries from health providers and health insurers are just getting started.

The Texas Hospital Association issued a statement the day after the election on health care:

“Repeal without replacement of the ACA’s provisions that have reduced the number of uninsured would be problematic for any leadership be they Republican or Democrat. Any replacement needs to ensure that patients can get the care they need and providers are fairly paid for services provided. At the same time, cutting Medicaid funding would undermine the innovations, care improvements and cost efficiencies achieved by Texas Medicaid since 2011.”

If the conservative association for Texas hospitals is worried, you can bet that these conversations are going on in every state as thousands of hospitals assess the implications of the election. And it’s not just hospitals. As Reed Abelson wrote in the New York Times today:

“Even the powerful health care industry, which invested hundreds of millions of dollars in preparing for business under the Affordable Care Act, is disoriented about what to do next — and scrambling for ways to avoid a big financial shock. A repeal of the act would mean the loss of millions of customers for insurance companies and an onslaught of uninsured people to hospital emergency rooms for basic care.”

Republican Governors lead 16 states of the 32 states (including DC) that expanded Medicaid and don’t seem too eager to turn back the clock.

These states include Indiana, where the Vice President-elect used Medicaid expansion funding to create a conservative version of Medicaid. Governor Asa Hutchinson of Arkansas indicated yesterday he was interested in keeping the Medicaid expansion funding in his state – but he is looking for more flexibility from the federal government on issues like work requirements and asset tests.

Michigan Governor Rick Snyder’s office told Politico that he “will work to ‘convey the successes’ of the state’s Medicaid expansion to President-elect Donald Trump and the Republican-controlled Congress.” Finally, as my colleague Joan Alker pointed out yesterday the cautionary experience of Kentucky’s newly elected Republican Governor Bevin who ran and won last year on a promise to eliminate the ACA but has since backtracked in the face of the reality of hundreds of thousands of people who would lose coverage.

Many people don’t realize the hugely successful role the Affordable Care Act, Medicaid and the Children’s Health Insurance Program have combined to play for children and parents.

Joan Alker noted in her recent blog on the election results: “[T]he future of CHIP and children’s coverage is wrapped up with larger health policy questions such as whether the ACA is repealed and the fundamental question of what will be on the table for CHIP’s big sister – the Medicaid program. All of these programs are intertwined and there are many interactions legislatively and substantively depending on how the timing of the debate unfolds.” Joan is going to blog more about the stakes for children and families next week.

Uncertainty meets reality

Times in health care policy are as uncertain as they have ever been and accurate predictions about how the repeal debate will move forward are extremely difficult. One thing is extremely clear however –health coverage for millions of Americans is at stake in the coming months.

Adam Searing
Adam Searing is an Associate Professor of the Practice at the Center for Children and Families

Latest