Partial Medicaid Expansions Miss the Mark for Access, Care, Policy Group Says

Allowing a partial expansion of Medicaid to some low-income adults may help some people in nonexpansion states, but it would cause a significant loss of health coverage if approved in expansion states, according to a recent analysis by the Center on Budget and Policy Priorities (CBPP).

In addition, if states rolled back existing expansions, the federal government could wind up paying more and getting less, according to the CBPP.

The Affordable Care Act (ACA) gave states the option to expand Medicaid to low-income adults, with incomes up to 138% of the federal poverty line, at an enhanced federal matching rate: the federal government covers 90% or more of the cost, compared to regular match rates, which range from 50% to 76%. Currently, states wanting to take advantage of the enhanced match must cover the full expansion population and provide them with a comprehensive benefits package.

In nonexpansion states, adults with incomes above 100% of the poverty line can enroll in subsidized coverage through the ACA marketplaces, while many of those with incomes below 100% of the poverty line fall into a gap, ineligible for both Medicaid and marketplace subsidies.

Medicaid coverage better meets the needs of adults who fall into the gap, the CBPP said: Medicaid coverage offers lower premiums and cost sharing, coverage of nonemergency medical transportation, and the opportunity to enroll at any time of the year.

Read more about Medicaid expansion under the ACA.

The issue has suddenly arisen because the Trump administration reportedly started to consider the idea of using CMS waivers to allow partial expansion in Arkansas, Massachusetts and Utah. However, it then decided to put off any decision until after the November 2018 midterm elections.

Utah will vote this fall on a ballot initiative for a full expansion of Medicaid. After enough votes for the ballot initiative were collected, the state submitted an amendment to its existing section 1115 waiver that would extend Medicaid eligibility to additional low-income adults, but only those with incomes up to 100% of the poverty line. It also added a work requirement and capped enrollment if the Medicaid agency lacked funding. The state also sought the full expansion matching rate (90%) from the federal government, even though it would be covering fewer people.

The CBPP said “limiting coverage and access to care doesn’t further the objectives of Medicaid, making such proposals inappropriate for section 1115 waiver authority.”

It also said that “partial expansion would achieve smaller improvements in access to care and physical and financial health than full Medicaid expansion.”

In Utah under full expansion, 150,000 people would be covered, as opposed to 70,000 to 90,000 under a partial expansion.

Compared to nonexpansion states, individuals in expansion states, especially those with chronic conditions such as diabetes or hypertension, have better access to medications, improved rates of general health, better mental health, and better financial security as a result of lower medical debt, the CBPP noted.