Why Did States Refuse to Expand Medicaid?

Why Did States Refuse to Expand Medicaid?

Why did states refuse medicaid expansion money offered under the affordable care act

Many low-income people living in non-expansion states find themselves caught between state Medicaid eligibility requirements and those from the ACA marketplace financial assistance. Millions are caught between this coverage gap. Their income exceeds that needed for state assistance yet falls short for financial support from it.

Briana Wright is one of these individuals. She lives near Jackson, Mississippi and works at McDonald’s; recently, she needed gallbladder removal surgery.

1. They Don’t Think It’s Worth It

States that choose not to expand Medicaid forfeit billions of federal incentive funding as well as lower uncompensated care costs and other revenue increases that come with expansion.

Soon, the 11 remaining non-expansion states will start their eligibility redeterminations processes for Medicaid coverage losses and financial hardship. They could expand their programs at this pivotal moment as proposed by Vice President Biden’s administration; however, most are unlikely to do so.

Wright would need her income to increase substantially in order to qualify for marketplace subsidies – this may be an unrealistic request from a family struggling financially.

2. They Think It’s Too Big

Over the coming years, it is crucial that states take all steps possible to protect millions of people who rely on continuous coverage requirements by conducting outreach, improving transition systems from Medicaid to other options, and streamlining renewal processes.

Research indicates the financial benefits of expansion for states. Studies demonstrate its fiscal responsibility even among traditionally “fiscally conservative” states like Alabama; expansion has helped reduce costs and increase revenue across many of them, as well as improving labor force participation rates which is an ongoing priority of Alabama.

3. They Think It’s Too Bad

Alabama and other states that refuse to expand Medicaid have forced working people who want to keep their jobs into coverage gaps, while expanding it would help keep them healthy and in the workforce, increasing both their economic contributions as well as overall economic output.

If all non-expansion states were to adopt Medicaid expansion, millions of people would gain coverage. That includes parents whose income has surpassed the state threshold but not poverty level and who are therefore ineligible for premium subsidies in marketplaces. Medicaid could reduce out-of-pocket health care spending while saving hospitals money by covering uncompensated care better; surely this should be enough of an incentive? But why haven’t states signed on?

4. They Think It’s Too Political

Due to Medicaid expansion, over 10 million low-income people who gain coverage will experience improved access to health care, reduced out of pocket spending on health care costs and overall improved health outcomes. Unfortunately, even when given coverage intended to improve their wellbeing they still must contend with insurance-related disparities that exist among them.

Unwinding of Medicaid’s continuous coverage protection could result in massive coverage losses for people on the program, prompting state policymakers to use all available strategies to avoid this outcome, such as increasing outreach efforts and developing systems to transition people off of it. Furthermore, they should address redetermination policies which put individuals’ health at risk.

Even as Democrats make every attempt to persuade states to expand Medicaid, an increasing number of Republican-run states continue to reject the offer.

5. They Think It’s Too Much Work

The Affordable Care Act’s Medicaid expansion has resulted in striking reductions of America’s uninsured rate, helping more people lead healthier lives, while diminishing longstanding racial disparities in coverage and access to healthcare services.

But the new policy options available to states can be complex. One would require them to do everything possible to prevent massive coverage losses as the redetermination process kicks into gear.

It would involve conducting outreach, improving systems to facilitate people transitioning out of Medicaid and into the marketplace, reviewing renewal processes so people don’t lose coverage arbitrarily and acknowledging that this work is worth doing for low-income residents of their states; both in terms of savings and increased revenues.

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About the Author: Raymond Donovan