Senate GOP health plan may not protect millions on Medicaid expansion

Medicaid cut could put jobs in Kentucky at risk
Medicaid cut could put jobs in Kentucky at risk

Ever since Republicans set about to dismantle Obamacare, moderate lawmakers and governors have fought to protect Medicaid expansion. They say the program has provided coverage to millions of low-income adults and played a key role in battling the opioid epidemic ravaging their states.

Moderate GOP senators are hoping to extend the life of Medicaid expansion beyond the hard cutoff contained in the House bill, which would end enhanced funding for new adult participants in 2020. They would like the federal support to ramp down over seven years, though Senate leaders have countered with a three-year glide path, which would start in 2020.

Either one, however, would do little to protect millions of people covered through Medicaid expansion, experts say. That's mainly because many states would likely be forced to eliminate the program even sooner or won't be able to afford to keep it running.

Related: What senators are hashing out on health care behind closed doors

About 11 million adults gained insurance under the expansion program -- which is part of Obamacare -- in the 31 states that participate.

The federal government pays states more to cover low-income adults under Medicaid expansion than it gives them to cover traditional enrollees, including children, the elderly and disabled Americans. Under the current law, the feds are scheduled to pick up 90% of the cost for the adults in 2020 and beyond, but pay between 50% and 76% for traditional participants, depending on the state.

The House bill would allow those adults already enrolled to remain covered at the enhanced match rate as long as they remain continuously insured. However since Medicaid has a high churn rate, most would fall off the rolls within a few years. New adults enrollees would be covered at the lower, traditional match rate.

Just how the Senate would handle Medicaid expansion remains to be seen -- leaders are expected to release the plan on Thursday.

Related: Americans to Congress: Don't touch Medicaid funding

But at least eight states have provisions that would end Medicaid expansion if the federal match falls below 90%, according to Aviva Aron-Dine, a senior fellow at the left-leaning Center on Budget and Policy Priorities.

And many other states would have a tough time coming up with any additional money so they may have to freeze the program if the federal government reduces its support. Medicaid is usually the largest source of federal funds for states, but the program is also one of the biggest expenditures for the states as well.

"Most states do not have the dollars to fund Medicaid expansion once it drops below 90%," said Deborah Bachrach, partner at Manatt Health, a consulting firm. "Once the dollars go away, the expansion goes away."

Personal Finance


CNNMoney Sponsors