Rural Health Policy Project

Proposed Changes to Medicaid Threaten Access to Health Care

In the 1990s, the Medicaid program was often discussed by policymakers as a secondary topic after dealing with issues surrounding Medicare and reforming managed care. There were several reasons for this. Medicaid was seen as a “welfare” program targeted at specific poor populations. The country still hadn’t yet experienced the deep recessions that would mean job losses for millions and consequent state Medicaid enrollment increases as substantially more children and parents turned to the program to keep health coverage. In addition, rapidly expanding numbers of completely uninsured Americans meant a great deal of policy and political debate focused on addressing the needs of those without any health coverage at all.

Twenty-five years later the environment has changed and Medicaid is a major focus of debate. The program grew significantly in response to recession-driven job loss, a shift by many employers away from providing health coverage, and a changing economy that meant many Americans moved to jobs that didn’t provide health insurance. Especially in some states, a growing aging population came to rely even more on Medicaid for nursing home care and to plug the significant cost sharing holes for low-income seniors in Medicare’s health benefit. States also became more reliant on federal Medicaid dollars paying for health care services, especially for vulnerable seniors, pregnant women, and children with no other coverage options. And shrinking economies in many rural areas meant to hospitals and other health providers Medicaid became a significant insurer for increasing numbers of patients.

Finally, the most significant change for Medicaid came as part of the Affordable Care Act where the old categories of eligibility and differing income qualifications were done away with in favor of an income floor below which all poor citizens would qualify for coverage. Even though this change was modified by the United States Supreme Court into a state “Medicaid expansion” option, the majority of states did accept the ACA’s Medicaid funding and fierce debate around Medicaid continued in most of the 19 states that have yet to extend coverage.

Over time, this transformation of the Medicaid program into one of the pillars of our health system has had a subtle but significant effect on health care policy debates –including the current fundamental one over the American Health Care Act. Simply put, the Medicaid program is not only popular with members of both parties but it has also become a major part of our health system.

There are three major reasons to believe that making significant cuts or changes to Medicaid that threaten funding and access – rather than reforms that improve and strengthen the program – will be even harder for policymakers than just a few years ago:

  1. Medicaid now covers over 70 million Americans or one in five people. Compare this to the 55 million people covered under Medicare. And over half of all Americans report a connection to Medicaid either because they have received coverage or they have close friends and family who have gotten Medicaid. Big changes to Medicaid literally affect millions of Americans and a majority of people, even if they are not covered by the program, will have someone they know affected by those changes. Medicaid has become such a large and integral part of our health delivery system that the time when it could be dismissed by some as “only affecting poor people” is over.
  2. Children are half of the total number of people enrolled in Medicaid. In some states this percentage is much higher – for example, in North Carolina 70% of people on the Medicaid program are children. Here at the Georgetown Center for Child and Families we have compiled comprehensive maps that show the number of children on Medicaid and the Children’s Health Insurance Program by state and Congressional district. Therefore, major funding reductions and changes to the Medicaid program will have their largest effect on children. While children may not vote, strong support for making sure children get the health care they need crosses party lines. Even though the huge role Medicaid plays in children’s health is less well-known by the public and policymakers, as increasing attention is paid to the Medicaid program, expect this to change.
  3. In the vast majority of states after the passage of the Affordable Care Act, Medicaid was either expanded after debate or there have been extensive discussion around Medicaid and the expansion issue. About half of all states that have expanded Medicaid are run by Republican governors. And where there has been significant Medicaid expansion debate in states, that debate has been among Republicans. This showcases an important split in the party between those who want to extend health coverage to people who can’t afford it and those who don’t believe in a government role in helping lower income people obtain insurance. A final subtle effect of these state expansion debates has been a sharp increase in the knowledge among members of both political parties about who Medicaid serves, its importance to rural hospitals, and the role of the program as coverage for people who would never be able to obtain employer-based health insurance.

As the Senate takes up the American Health Care Act, expect concerns about Medicaid to start to loom large. Just the Medicaid coverage and financing implications in the bill that passed the House are the most significant changes to Medicaid in decades and states, patients and the public can all be expected to join the debate.