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Stamping Out the Medicaid Coverage Gap: An ACA Imperative

      In one of its most striking features, the Patient Protection and Affordable Care Act (ACA) expanded Medicaid eligibility for nearly all U.S. citizens and legal resident adults between the ages of 19-64 whose total household income stood at ≤138% of the Federal Poverty Level.

      The Patient Protection and Affordable Care Act (Public Law No: 111-148). Available at: https://www.congress.gov/111/plaws/publ148/PLAW-111publ148.pdf). Accessed March 7, 2022.

      To effectuate this goal, states were to receive enhanced federal matching funds commensurate with their Federal Medical Assistance Percentages.

      The Patient Protection and Affordable Care Act (Public Law No: 111-148). Available at: https://www.congress.gov/111/plaws/publ148/PLAW-111publ148.pdf). Accessed March 7, 2022.

      In so doing, the ACA set in motion a viable pathway for millions of low-income working-age adults who are ineligible to partake in the ACA marketplace to attain health coverage. However, on June 28, 2012, the ACA-mandated expansion of state Medicaid programs was rendered optional pursuant to the ruling of the U.S. Supreme Court in National Federation of Independent Business v. Sebelius.

      National Federation of Independent Business v. Sebelius, Secretary of Health and HumanServices, et al. Available at: https://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf. Accessed March 7, 2022.

      In the years since the Supreme Court decision, a total of 38 states and Washington DC proceeded to expand their Medicaid programs.

      Congressional Research Service. Overview of the ACA Medicaid expansion. Available at: https://crsreports.congress.gov/product/pdf/IF/IF10399. Accessed March 7, 2022.

      Twelve states have yet to follow suit.

      Congressional Research Service. Overview of the ACA Medicaid expansion. Available at: https://crsreports.congress.gov/product/pdf/IF/IF10399. Accessed March 7, 2022.

      In this commentary we review the extant Medicaid coverage gap as well as the present and potential future steps that may lead to the resolution thereof.
      The ACA was designed to expand health insurance through the individual mandate, the ACA marketplace exchanges, and the Medicaid expansion–the latter two working in lockstep. The Supreme Court's decision and state-specific opposition to the expansion of Medicaid created the Medicaid coverage gap, an estimated 2.2 million poor, non-elderly, non-disabled adults whose limited family income (<100% of Federal Poverty Level) precludes them from partaking in the ACA marketplace exchanges.

      Congressional Research Service. Overview of the ACA Medicaid expansion. Available at: https://crsreports.congress.gov/product/pdf/IF/IF10399. Accessed March 7, 2022.

      These working poor, whose family income exceeds the Medicaid eligibility threshold, would have been Medicaid-eligible had their home state resolved to expand its Medicaid program.

      Congressional Research Service. Overview of the ACA Medicaid expansion. Available at: https://crsreports.congress.gov/product/pdf/IF/IF10399. Accessed March 7, 2022.

      Three out of every four adults in the Medicaid coverage gap (with or without dependent children) reside in a total of 4 states (Texas, Florida, Georgia, and North Carolina).

      Congressional Research Service. Overview of the ACA Medicaid expansion. Available at: https://crsreports.congress.gov/product/pdf/IF/IF10399. Accessed March 7, 2022.

      Texas and Florida alone account for more than half of those affected.

      Congressional Research Service. Overview of the ACA Medicaid expansion. Available at: https://crsreports.congress.gov/product/pdf/IF/IF10399. Accessed March 7, 2022.

      Nearly 6 out of 10 adults in the Medicaid coverage gap are people of color, particularly African Americans.

      Congressional Research Service. Overview of the ACA Medicaid expansion. Available at: https://crsreports.congress.gov/product/pdf/IF/IF10399. Accessed March 7, 2022.

      A recent analysis of the Assistant Secretary for Planning and Evaluation of the Department of Health and Human Services estimates that approximately 957,000 uninsured non-Latino Black American adults would gain Medicaid eligibility were the 12 non-expansion states to expand their Medicaid programs.

      Office of the Assistant Secretary for Planning and Evaluation. Office of health policy. Issue brief. Health insurance coverage and access to care among Black Americans: recent trends and key challenges. Available at: https://www.aspe.hhs.gov/reports/health-insurance-coverage-access-care-among-black-americans. Accessed March 7, 2022.

      The commitment of the Biden Administration to addressing the Medicaid coverage gap was first articulated in the President's FY2022 budget.

      The White House. Budget of the U.S. government. Fiscal year 2022. Office of Management and Budget. Available at: https://www.whitehouse.gov/wp-content/uploads/2021/05/budget_fy22.pdf. Accessed March 7, 2022.

      It was in this document that the ingredients of the President's plan were clearly laid out. Specifically, note was made of the possibility of “extending coverage to millions of people by providing premium-free, Medicaid-like coverage through a Federal public option, paired with financial incentives to ensure States maintain their existing expansions.”

      The White House. Budget of the U.S. government. Fiscal year 2022. Office of Management and Budget. Available at: https://www.whitehouse.gov/wp-content/uploads/2021/05/budget_fy22.pdf. Accessed March 7, 2022.

      The FY2022 budget went on to state that “healthcare is a right, not a privilege. Families need the financial security and peace of mind that comes with quality, affordable health coverage. In collaboration with the Congress, the President's healthcare agenda would achieve this promise.”

      The White House. Budget of the U.S. government. Fiscal year 2022. Office of Management and Budget. Available at: https://www.whitehouse.gov/wp-content/uploads/2021/05/budget_fy22.pdf. Accessed March 7, 2022.

      A key step toward resolving the Medicaid coverage gap materialized on March 11, 2021, when President Biden signed into law the American Rescue Plan Act of 2021 (ARPA; Public Law No: 117-2).

      Congress.gov. The American Rescue Plan Act of 2021 (Public Law No: 117-2). Available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text. Accessed March 7, 2022.

      ,

      Congressional Research Service. American Rescue Plan Act of 2021 (P.L. 117 Private Health Insurance, Medicaid, CHIP, and Medicare Provisions. Available at: https://crsreports.congress.gov/product/pdf/R/R46777. Accessed March 7, 2022.

      Section 9814 of the ARPA sees to the provision of financial incentives to non-expansion states to implement the Medicaid expansion. Specifically, the ARPA afforded a temporary (2-year) 5-percentage-point increase in the regular Federal Medical Assistance Percentage rates to non-expansion states that expand their Medicaid programs.

      Congress.gov. The American Rescue Plan Act of 2021 (Public Law No: 117-2). Available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text. Accessed March 7, 2022.

      ,

      Congressional Research Service. American Rescue Plan Act of 2021 (P.L. 117 Private Health Insurance, Medicaid, CHIP, and Medicare Provisions. Available at: https://crsreports.congress.gov/product/pdf/R/R46777. Accessed March 7, 2022.

      In the unlikely event that all of the 12 non-expansion states were to expand their Medicaid programs, the ARPA incentive is estimated to add up to a total of $16.4 billion in additional federal support.

      Congress.gov. The American Rescue Plan Act of 2021 (Public Law No: 117-2). Available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text. Accessed March 7, 2022.

      ,

      Congressional Research Service. American Rescue Plan Act of 2021 (P.L. 117 Private Health Insurance, Medicaid, CHIP, and Medicare Provisions. Available at: https://crsreports.congress.gov/product/pdf/R/R46777. Accessed March 7, 2022.

      Apart and distinct from the aforementioned financial support, the non-expansion states stand to grow their economies through job creation and an expanded tax base. Moreover, lower levels of uncompensated care are bound to stabilize rural hospitals, many of which may be on the verge of closing. Moreover, as noted in the recent report from the Assistant Secretary for Planning and Evaluation, the ARPA could aid 76% of uninsured Black Americans in finding a plan on Healthcare.gov for less than $50 a month and 66% in finding a plan for $0 a month.

      Office of the Assistant Secretary for Planning and Evaluation. Office of health policy. Issue brief. Health insurance coverage and access to care among Black Americans: recent trends and key challenges. Available at: https://www.aspe.hhs.gov/reports/health-insurance-coverage-access-care-among-black-americans. Accessed March 7, 2022.

      No doubt, progress in and around these “kitchen table” issues is bound to prove politically salient.
      More recent efforts at resolving the national Medicaid coverage gap have focused on the Build Back Better Act (BBB), which was passed by the U.S. House of Representatives on November 19, 2021.

      The White House. Remarks of President Joe Biden – State of the Union Address as prepared for delivery. Available at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/03/01/remarks-of-president-joe-biden-state-of-the-union-address-as-delivered/. Accessed March 7, 2022.

      However, given the uncertain prospects of the BBB in the U.S. Senate, it is far from clear whether or not the bill, were it to be enacted, will, in its final form, exert a material effect on the persistent challenge of the national Medicaid coverage gap. The BBB version passed by the U.S. House of Representatives aims to render those trapped in the Medicaid coverage gap eligible for the fully-subsidized private health insurance plans in the ACA marketplace exchanges through 2025.

      Congress.gov. Build Back Better Act. Available at ://www.congress.gov/bill/117th-congress/house-bill/5376/actions. Accessed March 7, 2022.

      The attendant premium and cost-sharing assistance are to be assumed by the federal government.

      Congress.gov. Build Back Better Act. Available at ://www.congress.gov/bill/117th-congress/house-bill/5376/actions. Accessed March 7, 2022.

      Moreover, low-income enrollees will be afforded year-round access to Marketplace coverage rather than only during the open enrollment period.

      Congress.gov. Build Back Better Act. Available at ://www.congress.gov/bill/117th-congress/house-bill/5376/actions. Accessed March 7, 2022.

      Targeted outreach funds ($105 million) and support for exchange navigators ($70 million) are also being contemplated.

      Congress.gov. Build Back Better Act. Available at ://www.congress.gov/bill/117th-congress/house-bill/5376/actions. Accessed March 7, 2022.

      Finally, the BBB aims to increase the federal matching contribution to the Medicaid programs of expansion-adopting states from 90 to 93% through 2025.

      Congress.gov. Build Back Better Act. Available at ://www.congress.gov/bill/117th-congress/house-bill/5376/actions. Accessed March 7, 2022.

      The Medicaid coverage gap has left millions of the nation's poorest adults uninsured. As outlined in the FY2022 budget, resolving the Medicaid coverage gap remains a high priority of the Biden administration. It is in this vein that ARPA offered a temporary (2-year) increase in the federal matching fund contribution to the state Medicaid programs of the non-expansion states. Indications are that a longer-term solution for the coverage gap will have to be crafted under the aegis of the BBB should it be enacted in whole or in part. The BBB commitment to addressing the coverage gap by granting of access to the fully-subsidized private health insurance plans in the ACA marketplace exchanges through 2025 stands to make a substantial difference. This initiative alone stands to provide temporary affordable and comprehensive coverage to the uninsured. However, absent a 2025 extension of the BBB subsidies, the Medicaid coverage gap is all but certain to reappear. Expanding Medicaid to incorporate the working poor was a leading objective of the ACA. Every effort should be made to live up to this objective. President Biden said it best in his State of the Union Address: “ Let's close the coverage gap and make those savings permanent.”

      The White House. Remarks of President Joe Biden – State of the Union Address as prepared for delivery. Available at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/03/01/remarks-of-president-joe-biden-state-of-the-union-address-as-delivered/. Accessed March 7, 2022.

      References

      1. The Patient Protection and Affordable Care Act (Public Law No: 111-148). Available at: https://www.congress.gov/111/plaws/publ148/PLAW-111publ148.pdf). Accessed March 7, 2022.

      2. National Federation of Independent Business v. Sebelius, Secretary of Health and HumanServices, et al. Available at: https://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf. Accessed March 7, 2022.

      3. Congressional Research Service. Overview of the ACA Medicaid expansion. Available at: https://crsreports.congress.gov/product/pdf/IF/IF10399. Accessed March 7, 2022.

      4. Office of the Assistant Secretary for Planning and Evaluation. Office of health policy. Issue brief. Health insurance coverage and access to care among Black Americans: recent trends and key challenges. Available at: https://www.aspe.hhs.gov/reports/health-insurance-coverage-access-care-among-black-americans. Accessed March 7, 2022.

      5. The White House. Budget of the U.S. government. Fiscal year 2022. Office of Management and Budget. Available at: https://www.whitehouse.gov/wp-content/uploads/2021/05/budget_fy22.pdf. Accessed March 7, 2022.

      6. Congress.gov. The American Rescue Plan Act of 2021 (Public Law No: 117-2). Available at: https://www.congress.gov/bill/117th-congress/house-bill/1319/text. Accessed March 7, 2022.

      7. Congressional Research Service. American Rescue Plan Act of 2021 (P.L. 117 Private Health Insurance, Medicaid, CHIP, and Medicare Provisions. Available at: https://crsreports.congress.gov/product/pdf/R/R46777. Accessed March 7, 2022.

      8. Congress.gov. Build Back Better Act. Available at ://www.congress.gov/bill/117th-congress/house-bill/5376/actions. Accessed March 7, 2022.

      9. The White House. Remarks of President Joe Biden – State of the Union Address as prepared for delivery. Available at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/03/01/remarks-of-president-joe-biden-state-of-the-union-address-as-delivered/. Accessed March 7, 2022.