Governors are anticipating gaining more authority over the massive Medicaid health program for the poor now that Donald Trump is heading to the White House, while millions of Americans are wondering whether they will lose their coverage.
But Trump made conflicting statements about Medicaid during the campaign, leaving experts scratching their heads about what his victory means for the people it covers. Moreover, despite his and fellow Republicans’ pledge to repeal the Affordable Care Act, there may be political pushback to taking away Medicaid coverage from the millions who got it under the law.
Trump has vowed to move Medicaid to a block grant formula, giving states a certain amount of money based on poverty levels to manage the program how they want, with some federal oversight. Republican governors have been clamoring for such a change because they say it will help control costs, but it could make it more difficult for low-income residents to keep their coverage.
At the same time, Trump said he would take care of anyone who wanted coverage. He said on “The Dr. Oz Show” in September that he would provide Medicaid to people who couldn’t afford private insurance — a key tenet of the ACA.
Despite Republicans’ sweep of the White House and Congress, they will probably not be able to knock out the entirety of President Obama’s health law. A full repeal would likely fall to a Democratic filibuster in the Senate.
Congressional Republicans could gut key funding provisions, however, including paying for the Medicaid expansion, with a simple majority of votes through a process called reconciliation. They almost did so with a bill last year that, among other attacks on the Affordable Care Act, would have phased out expanded Medicaid coverage over two years. President Obama vetoed the measure, but a President Trump could sign it into law.
The politics of eliminating it are more complicated than they might appear, said Benjamin Sommers, a health policy expert at the Harvard T.H. Chan School of Public Health. Republicans won’t want to be seen as taking away insurance from millions of people without offering some alternative.
Sommers pointed to what has happened in Kentucky. During his run for governor, Republican Matt Bevin vowed to undo the Medicaid expansion in the state, which had extended coverage to 425,000 people. But as the campaign went on, and since he became governor, Bevin shifted his position to say that the program should be reformed to control costs.
“The reality of the politics of taking coverage away from people pushed Governor Bevin to reconsider and come to a different conclusion than what he had said on the campaign trail,” Sommers said.
The Affordable Care Act was designed to increase coverage in two ways: It provided subsidies to help people with certain income levels buy private insurance, and it made Medicaid coverage available for more low-income people who were previously ineligible.
But the 2012 Supreme Court decision that upheld the measure’s individual mandate made the Medicaid expansion voluntary. Since then, 31 states and Washington, D.C., have expanded the program.
Some governors and state legislatures resisted doing so because of political opposition to the ACA and because they worried about the expense of providing coverage to so many more people.
With traditional Medicaid programs, the federal and state governments split the cost, with the federal government providing a greater share of funding in poorer states. But federal tax dollars covered the entire expense of the expansion for the first few years, and are set to cover 90 percent of the costs going forward.
States can apply for waivers that have to be approved by the federal government to run experiments within their Medicaid programs, including making beneficiaries pay premiums and using federal funds to pay for private insurance for beneficiaries. Six of the states that expanded Medicaid — Arkansas, Iowa, Michigan, Indiana, New Hampshire, and Montana — did so with a waiver.
But federal health officials have rejected some proposals from states, including requiring people to work in order to be eligible for Medicaid and enacting premiums for people with incomes below the poverty line. In September, the Obama administration rejected a waiver from Ohio in part because it could have excluded people from coverage if they did not keep up with payments.
One state to keep an eye on moving forward is Kentucky, which under Bevin is seeking a waiver to require many beneficiaries to pay premiums and get jobs or perform community service. It’s possible that the Centers for Medicare and Medicaid Services in a Trump administration would be more willing to approve waivers with aggressive cost-sharing measures.
Then again, if Trump and GOP lawmakers do convert Medicaid funding to block grants, those proposals may become moot.
“I don’t quite frankly see why anyone would fool around with more waivers,” said Sara Rosenbaum, a health policy expert at George Washington University’s Milken Institute School of Public Health. From the Republican standpoint, getting a waiver approved by CMS can be a long haul, whereas block grants would provide flexibility faster, she said.
Some Republican officials, including House Speaker Paul Ryan, have also proposed moving to a per capita funding system, which, unlike block grants, would allow funding to rise with the number of beneficiaries. Both per capita allotments and block grants are designed to help control Medicaid costs and encourage states to institute changes to their programs that could serve their beneficiaries better.
“There are already access issues in the Medicaid program that need to be addressed,” said Mia Heck, director of the health and human services task force for the American Legislative Exchange Council, which works with Republican lawmakers on legislation. “All that’s been done [under the Affordable Care Act] is further expanding the program without updating the program” and without improving services or cutting costs.
Interestingly, a plan released by House Republicans this summer that outlined a per capita allotment system assumed that the Medicaid expansion would continue, sketching out how the system would work in states that did and did not expand the program.
The idea of block grants for Medicaid are not new. They were proposed by President Ronald Reagan in 1981, Republicans in Congress in 1995, and President George W. Bush in 2003. Each time, they failed to gain traction amid opposition from Democrats, who argue the grants would limit health care access to the poor.
If enrollment rises under block grants, states would have to reduce services or drop some people from coverage plans, said Diane Rowland, the executive vice president of the Kaiser Family Foundation.
“States want more flexibility, but they also don’t want to have to cover more people with less money,” she said.
Republicans will also face pressure to preserve Medicaid coverage from hospitals, which have benefited from treating more patients with some form of insurance.
That is especially the case, Rowland said, if the federal government continues to reduce extra payments to hospitals that serve low-income populations. Those subsidies were cut after the ACA’s implementation under the rationale that expanding Medicaid coverage would reduce the burden of uncompensated care for hospitals.
“States would have to find a way to support hospitals and clinics” if the federal government cuts Medicaid payments further, said John Holahan, a fellow at the Urban Institute’s Health Policy Center. “Right now, it’s relieved them of those costs.”