Fifteen years ago this month, President Obama signed into law the two bills that together make up the Affordable Care Act (ACA). It was, to borrow a phrase, a BFD. In a blog, on the occasion of a previous birthday, my colleague Joan Alker methodically laid out just how big a deal the ACA was for children and families. And just last week Jeanne Lambrew, one of the ACA’s principal staff architects, explained in Health Affairs how the ACA has largely met its original coverage goals, lowering the nation’s uninsured rate by more than half, from 16.0% in 2010 to 7.6% in 2024. These accomplishments came in the face of unrelenting opposition to the goal of universal coverage, chronicled by Jonathan Cohn in his classic “The Ten Year War.”
Make that fifteen—and counting.
The ACA’s coverage design has a lot of moving parts (our colleagues at the Georgetown University Center on Health Insurance Reforms review a number of them here). One of the most important is Medicaid expansion, which has resulted in the coverage of 16.7 million newly eligible low-income adults and has made a major difference in the lives of those Americans. The research literature on the effects of Medicaid expansion is extensive (over 600 studies published between January 2014 and March 2021). Reviewing these studies, KFF researchers concluded that Medicaid expansion is associated with “gains in coverage; improvements in access, financial security, and some measures of health status/outcomes; and economic benefits for states and providers.” As one might expect, the literature also shows that Medicaid expansion has improved hospital payer mix by reducing the numbers of uninsured patients. And a CCF research brief explains that Medicaid expansion is associated with more financial security for families; healthier mothers, babies, and caregivers, and coverage has, through the “welcome mat” effect, increased coverage of children.
Unfortunately, Medicaid expansion has not reached all of the low-income adults it was originally designed to help. When the ACA was enacted in 2010, it required states to extend Medicaid eligibility to all adults with incomes at or below 138% of the federal poverty level (now $21,600 for an individual, $36,800 for a family of 3) who were not otherwise eligible for Medicaid or covered by Medicare. In 2012, the Supreme Court ruled 7-2 that this requirement was unconstitutional but it also decided 5-4 that Medicaid coverage for this population could nonetheless remain in place as a state option.
This decision triggered a multi-year, state-by-state battle over coverage of Medicaid expansion adults, summarized at the 12-year mark by my colleague Adam Searing. As things now stand, 10 states do not cover Medicaid expansion adults: Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin and Wyoming. A total of 1.4 million adults across these states are in the coverage gap: their incomes are below 100% of the federal poverty level, which makes them ineligible for subsidies that would enable them to afford premiums for insurance coverage in the Marketplace but does not allow them to qualify for Medicaid because the relevant eligibility thresholds in those states are well below (median 34%) the poverty level. These states have steadfastly refused to extend Medicaid to all adults in the coverage gap despite the clear evidence of benefit to that population and the generous financial incentives available from the federal government for doing so.
During the first year of the first Trump administration, when the ACA was only seven years old, a concerted effort to “repeal and replace” it narrowly failed in the Senate, thanks to a dramatic thumbs down by the late Senator John McCain. Included in the July 20, 2017 version of that legislation were a number of provisions that would have cut federal Medicaid payments to states by $756 billion over ten years (the version passed by the House would have made $834 billion in Medicaid cuts). Among these were: elimination of the 90 percent federal matching rate of the costs of care for Medicaid expansion adults, a per capita cap on federal Medicaid spending, and requirements on Medicaid expansion adults to report work.
At the beginning of the second Trump administration, the Medicaid budget knives have come out again. The President has said that “we’re not going to touch” Medicaid but “we are going to look for fraud.” At the same time, he has endorsed the House-passed budget resolution, which calls for at least $880 billion in cuts, most of which would come from Medicaid. (There is some fraud in Medicaid, as there is in other public and private sector insurance, but nothing remotely close to $880 billion. Some are confusing improper payments with fraud without acknowledging that improper payments could be underpayments and the fact that most are due to paperwork issues not fraud.) As my colleague Edwin Park has documented, Republicans in Congress, presumably with the support of the Trump administration, are working from the same playbook as they used in 2017.
Medicaid expansion, in particular, is a prime target. A number of anti-expansion policies are reportedly under active discussion, including reducing the 90% matching rate to a state’s regular matching rate (an average of 57%) and imposing a per capita cap on federal spending for expansion adults, which Edwin has demonstrated will have much the same fiscal effect on states as reducing the 90 percent matching rate. In addition, proposals to require reporting of work as a condition of Medicaid eligibility are aimed squarely at expansion adults (and others). If enacted, they would result in an estimated disenrollment of about five million—even though most adults with Medicaid coverage aged 19-64 work full or part-time.
It’s unclear how this will all shake out. A few things are known. Medicaid is popular and voters don’t want it cut, according to recent KFF polling. Cutting federal payments for the expansion population will hit both Red and Blue states with massive cost shifts that they will not be able to backfill, putting their providers and enrollees at great risk and potentially disrupting Medicaid markets for managed care organizations. Cuts focused on the expansion populations will also leave the 10 non-expansion states and their providers unscathed, which may strike some expansion states (and their providers) as less than equitable.
So for now, let’s all lift our glasses and toast to the health of the ACA. There is much to celebrate. But there’s also much work ahead to ensure the ACA—with Medicaid expansion intact—stays healthy enough to celebrate its “Sweet Sixteen” next March.