What’s Brewing with Medicaid Expansion?
With many new governors in office and state legislatures in session, policymakers in nearly all of the 14 states that have not implemented the Affordable Care Act’s Medicaid expansion are considering various proposals to broaden coverage on their own terms. Additionally, states that recently expanded Medicaid through ballot initiatives are taking different approaches toward implementation, and there are efforts in other states to potentially put expansion before voters in 2020.
To date, voters have approved Medicaid expansion through ballot initiatives in Idaho, Maine, Nebraska, and Utah. In January, Maine’s newly-elected Democratic Gov. Janet Mills issued an executive order directing state agencies to begin implementing the 2017 voter-approved expansion measure, which had been stalled by the former Republican governor.
In the other three states, expansion passed in November 2018 and policymakers are currently assessing their next steps. Nebraska Gov. Pete Ricketts provided funding in his budget recommendation for the state’s share of the Medicaid expansion costs and indicated that the state is on track to file a state plan with federal officials by early April. Nebraska officials are also in the process of determining the benefit package and other aspects of implementation, and are anticipating that coverage could begin in January 2020.
In contrast, state legislators in Idaho and Utah are seeking to implement certain restrictions on their voter-approved expansion measures. In Idaho, while state officials submitted an expansion plan to federal officials in mid-February and legislators are currently debating how to fund the state’s share, a bill has been introduced in the state legislature to add conditions to the expansion. The bill proposes an optional workforce training program, and also directs the state to seek federal approval to provide premium assistance to individuals with incomes above 100 percent of the federal poverty level (FPL) to enroll them in qualified health plans on the state’s exchange, Your Health Idaho. The legislation also includes provisions to end expansion if the federal match amount falls below the ACA’s mandated rate, and for the legislature to review the effects of expansion by January 2023 to determine whether to continue the program. Also, while efforts to repeal the voter-approved measure recently failed to move forward, other bills to add certain restrictions to expansion may also emerge in the coming weeks as legislators negotiate over how to pay for the expansion.
Utah has taken a more significant step by recently passing a bill, which the governor signed into law earlier this month, that considerably alters the voter-approved expansion measure in a number of ways. First, the law seeks federal approval to implement only a partial expansion of Medicaid to cover individuals earning up to 100 percent of FPL — rather than up to the ACA’s required coverage level of 138 percent of FPL that was in the ballot measure — with work requirements. (Utah lawmakers also passed a law and submitted a waiver application to implement a partial Medicaid expansion with work requirements last year, which was never approved or rescinded, and that legislators think could be potentially used to quickly approve a partial expansion without a new waiver.) Under the recently passed law, the state would initially shoulder more of the costs of implementing the partial expansion, but would submit another waiver to request the enhanced federal match that the ACA provides for the expansion population. Arkansas and Massachusetts previously requested federal permission from the current administration to limit the Medicaid expansion population to those earning 100 percent of FPL at the enhanced federal match rate, but did not receive approval to do so.
The Utah law would also add federal and state spending limits — it seeks to implement enrollment caps if state costs exceed certain thresholds, which federal officials have never approved before and would mean a significant change to the structure of the Medicaid program. Further, it includes a provision to establish a per capita cap model for receiving federal Medicaid funds for the new eligibility group. This would be another significant change, but state officials have said this could make the proposal more likely to be approved because it would limit federal spending. Finally, if federal approval for Utah’s partial expansion is not granted by January 2020, the law directs the state to seek to implement full Medicaid expansion with restrictions such as cost sharing and work requirements.
Georgia is another state that may seek federal approval for a partial Medicaid expansion, as new Republican Gov. Brian Kemp has expressed support for exploring different coverage options. His proposal, the Patients First Act, allows the state to submit an 1115 waiver request to expand Medicaid only up to 100 percent of FPL, and also authorizes the governor to potentially submit a 1332 waiver to pursue a range of other options. The bill recently received a favorable recommendation from the Senate Health and Human Services Committee. The governor also included $1 million in his budget proposal to fund a consultant to create a plan for developing the waivers.
In Kansas, new Democratic Gov. Laura Kelly sent legislators a Medicaid expansion plan in late January, and expressed strong support for expansion in her state of the state address. While the proposal is very similar to the expansion bill that passed the legislature in 2017 — which was ultimately vetoed by then-governor Sam Brownback — many Republican state legislators continue to strongly oppose expansion and the legislature has become more conservative since that time.
There is a similar situation in Wisconsin, with the governorship switching from Republican to Democratic control in 2018. Gov. Tony Evers issued an executive order in January directing the Department of Health Services to develop a plan to expand Medicaid, and his budget proposal is also expected to call for expansion. But the Republican-controlled legislature does not support expansion, and a new analysis contends that expansion will increase costs in the private sector. As a result, the governor and state legislators currently remain at an impasse on the issue.
North Carolina’s Democratic Gov. Roy Cooper has sought to expand Medicaid since taking office in 2017 and it continues to be a priority of his administration this year, but he has faced ongoing opposition from the Republican state legislature. Democratic legislators have introduced two identical expansion bills (HB 5 and SB 3), and the governor recently explained that hospitals have agreed to a tax that will cover the state’s expansion costs. However, a Republican-sponsored expansion bill with work requirements that was debated previously is expected to be reintroduced this session, and so deliberation on the expansion issue is expected.
Some Democratic state legislators in Tennessee expressed hope that new Republican Gov. Bill Lee might warm up to Medicaid expansion, but his recent comments indicate that he remains strongly opposed. Possibly complicating any expansion efforts, some Republican lawmakers have expressed support for potentially seeking federal approval to shift the state’s Medicaid program into a block grant financing structure. Related bills have been introduced in both the House and Senate, along with a broader rural health care plan that includes a block grant proposal.
In Wyoming, one bill directing the state insurance department to conduct a study of the benefits and costs of expansion passed the Senate and will now be voted on by the House. Another bill that proposed expansion with work requirement conditions and a tailored mental health and substance abuse program failed to pass the House in early February. However, there is a possibility that expansion may be put to the voters, as a Wyoming Hospital Association representative recently commented that a Medicaid expansion ballot initiative could be a “real reality.”
Other states where Medicaid expansion may end up on the 2020 ballot include Florida, Missouri, Oklahoma, and South Dakota. Mississippi is another state where expansion could go on the ballot, but there have been reports that both the governor and state legislators may be willing to consider expansion sooner, with some conditions. This may be due in part because the Democratic candidate for the 2019 gubernatorial race has indicated support for expansion.
In Texas, there are bills in the House and Senate to permit counties to seek federal approval to implement expansion locally (similar bills were introduced in 2017). Although there has been some speculation that a voter referendum could occur on expansion, this would first need legislative approval because the state does not allow citizen-initiated ballot measures.
While Montana expanded Medicaid in 2016 through an 1115 waiver, the authorizing legislation only approved expansion through June 2019. Gov. Steve Bullock’s recent state of the state address highlighted the positive economic effects and increased coverage rates that resulted from expansion, its importance in helping to sustain small businesses and rural hospitals, and recommended that legislators make expansion permanent. A number of proposals have been introduced already by both Democratic and Republican state lawmakers, and it is anticipated that these bills will be reviewed more closely in mid-March.
The National Academy for State Health Policy (NASHP) will be closely watching emerging state Medicaid expansion initiatives and will report on these proposals and new ones. For up-to-date information about states’ Medicaid expansion activities, explore NASHP’s map here.