Recent Medicaid Expansion Activity in Eight States during the COVID-19 Crisis

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As states respond to the COVID-19 crisis, those that have yet to expand Medicaid are facing rising calls to reverse their opposition and quickly provide affordable health care to millions of residents. The oncoming double hit to states of rising numbers of residents needing advanced, expensive health care coupled with truly staggering job losses – and the associated massive loss of health insurance coverage – mean Medicaid is getting a well-deserved second look in many of the 14 (plus Nebraska) expansion holdout states.

And these states should certainly have expansion as a top strategy as they move to confront both the enormous health care needs emerging in their states in tandem with the growing fiscal pressures resulting from skyrocketing unemployment and dropping tax revenues. Just last month, an article in the New England Journal of Medicine reviewed the financial picture of the 37 states (including DC) that have expanded Medicaid. The authors found:

“[The] increase in Medicaid spending was subsidized entirely by increased federal funding to expansion states, with no significant changes in spending from state revenues associated with Medicaid expansion….How could states have expanded Medicaid without increasing state spending, when they were on the hook for 5% of the expansion costs in 2017 and 6% in 2018? Our findings in this regard are consistent with case studies from several states showing that they have used federal dollars from the Medicaid expansion to offset other areas of state spending, such as direct subsidies to public hospitals and mental health centers, health care costs for people involved with the justice system, and a more generous match rate for optional groups previously covered by many state Medicaid programs. Thus, Medicaid expansion appears to be a win–win from the states’ perspective — giving health insurance to millions of low-income adults and offering financial support to safety-net hospitals, without any adverse effects on state budgets.”

The experience of the states that have expanded Medicaid shows that implementing expansion in the final 14 states would mean millions more people – many newly in desperate need – would get affordable coverage and states would also get a huge infusion of federal funds on top of COVID-19 stimulus to pay for the coverage.

Nebraska

Nebraska voters passed Medicaid expansion in November 2018, but Nebraska’s Governor Pete Ricketts refused for over a year to implement the expansion, setting a date of October 1,  2020. In his recent press release the Governor acknowledged the federal government will not give him approval for a Medicaid waiver before implementation begins and he will expand with a simple state plan amendment. Even with the COVID-19 pandemic ramping up the need for health coverage to crisis levels, the Governor is saying expansion isn’t feasible to do more quickly because of the very crisis that is prompting the need for health coverage. (The Governor also blames a computer system rework and the need to hire “several new people” to help sign folks up.) Instead the Governor has put forward a set of proposed regulations that would limit any future expansion and reduce current Medicaid coverage – both of which apparently are possible for his Administration to do during a pandemic.  Finally, there is ongoing editorial comment in the state calling for Medicaid expansion as soon as possible and continuing stories pointing out how the Governor’s foot dragging makes little sense in the current crisis.

Oklahoma

A ballot initiative on Medicaid expansion has gathered enough signatures to qualify to allow voters to weigh in. However, commentators have roundly denounced Governor Stitt’s refusal so far to set an election date for voters to vote on expansion coverage ballot measure. Instead, the Governor is proceeding during the COVID-19 pandemic with an interim plan.  He would first expand Medicaid through a simple state plan amendment July 1 and then apply to the federal government for a more limited future program that would eventually restrict Medicaid coverage even further. If voters pass the ballot measure (should the Governor ever set an election date) the expansion would not be able to be restricted in the future. And this approach makes even less sense because further Medicaid restrictions during the COVID-19 pandemic are off the table for now.

Kansas

Editorials in Kansas have called for Medicaid expansion as a top priority and the Kansas Governor still is calling for action. The legislature may again consider expansion when and if they reconvene later this month. And this excellent piece on Secretary Lee Norman of the Kansas Department of Health and Human Services gives a great overview of his desire to move this forward.

Alabama

Alabama’s Governor has flatly refused to answer direct questions about the possibility the state might expand Medicaid in response to the COVID-19 pandemic. And this is after commentators have been calling for weeks for the state to consider expansion.

Texas and Florida

Even in Texas – the state with the largest number of residents who would gain coverage under Medicaid expansion – there are strong calls on editorial pages for Medicaid expansion. And just this week, more than 50 state policy and industry groups issued a joint call for Medicaid expansion in the state. More than 44 groups issued a similar call for new consideration of Medicaid expansion in Florida, echoing concerns from lawmakers there that the state leaders should revisit their opposition to expansion. At this point however lawmakers in both states see little chance for movement despite the urgent need for more affordable health coverage.

North Carolina and South Carolina

The North and South Carolina Institutes of Medicine jointly issued a detailed brief on COVID-19 efforts so far in the two states and steps being taken to combat the virus. Neither state appears to be seriously considering Medicaid expansion at this time however, despite the North Carolina Governor’s continued push for the policy change. Editorials are calling for expansion around the state given the health crisis and many policy experts and policymakers in the state continue to raise the issue.

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

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