Health Insurance for Millions Is Now on the Chopping Block
Republicans’ very quiet, very serious effort to go after Obamacare’s Medicaid expansion.
THE LIKELIHOOD OF DONALD TRUMP and his allies in Congress taking Medicaid away from millions of low-income Americans—and, in the process, rolling back a huge piece of the Affordable Care Act—has increased significantly in the last two weeks.
The change has been easy to miss, because so many other stories are dominating the news—and because the main evidence is a subtle shift in Republican rhetoric.
But that shift has been crystal clear if you follow the ins and outs of health care policy—and if you were listening closely to House Speaker Mike Johnson a week ago, when he appeared on Fox News.
Johnson was there to talk about the budget reconciliation plan Republicans in Congress had just passed. That plan envisions significant spending cuts to help finance trillions of dollars in tax cuts. But the math doesn’t work with cuts to discretionary spending alone. And Republicans have pledged not to touch Social Security or Medicare.
That leaves just one target: Medicaid. Really the only question has been what kind of reductions in the program Republicans would seek, and how big those reductions would be.
For the past few months, Republicans have been signaling they would limit themselves to imposing “work requirements” and going after what they call “waste, fraud, and abuse” in the program. Either could have a significant impact on both the budget (i.e., federal spending would come down by more than $100 billion over ten years) and access to health care (i.e., several million people would lose insurance).
At the same time, Republicans seemed to be shying away from the even bigger structural changes they have tried many times before, including in their 2017 efforts to repeal the Affordable Care Act (“Obamacare”), when they proposed wholesale changes to the program’s financing.
Then Johnson went on Fox and, after the obligatory promise “to protect Medicare, Social Security, Medicaid for people who are legally beneficiaries of those programs,” said the following:
We have to root out fraud, waste, and abuse. We have to eliminate people on, for example, on Medicaid who are not actually eligible to be there—able-bodied workers, for example, young men who are—who should never be on the program at all.
When you have people on the program that are draining the resources, it takes it away from the people that are actually needing it the most and are intended to receive it. You’re talking about young, single mothers, down on their fortunes at a moment—the people with real disabilities, the elderly. And we’ve got to protect and preserve that program. So we’re going to preserve the integrity of it.
That may sound like a defense of Medicaid and the people who need it, and surely that’s how Johnson hopes the public will interpret it. But that is also the language Medicaid critics have been using to describe a big, controversial downsizing of the program—one that would undermine what was arguably Obamacare’s single biggest achievement.
HERE IT HELPS TO REMEMBER what the Affordable Care Act sought to accomplish, and the key role Medicaid played in that.
The law’s main goal was to make decent health insurance available to all Americans, as part of a decades-long, still unfinished campaign to make health care a basic right, as it is in every other economically advanced nation.
That meant getting coverage to the uninsured, including low-income Americans who didn’t have a way to get insurance on their own—because their jobs didn’t offer coverage or made coverage available at premiums they couldn’t afford, and because individual policies (the kind you buy on your own, not through a job) were either too expensive or unavailable to them because of pre-existing conditions.
For the sake of both political and practical expediency, the Affordable Care Act’s architects sought to build on existing programs and systems rather than undertake a wholesale, Bernie Sanders–style restructuring of the health care system. And so they turned to Medicaid, which had been in place for nearly fifty years and was already providing coverage to low-income Americans across the country.
But Medicaid is a joint federal-state program, with Washington putting up the majority of money and leaving administration to states, as long as they keep within certain guidelines. And for most of the program’s history, the majority of states stuck to the minimum requirements, or relatively close, meaning they limited coverage to certain categories of people, including children, young single mothers, and the elderly.
The Affordable Care Act’s designers sought to turn Medicaid into something much more ambitious: a program for all low-income Americans, so that it was open to any citizen with an income below or just above the poverty line, even if they were working-age men or fell into another demographic category the program had excluded previously.
To put it another way, they were out to transform Medicaid from a narrowly targeted welfare program into part of a universal coverage scheme.
To make this expansion financially viable for the states, the Affordable Care Act bumped up the federal matching rate, under a formula that—today—means Washington is picking up 90 percent of the cost. That bump proved crucial after 2012, when the Supreme Court made the expansion of Medicaid optional. The promise of those extra federal matching funds helped persuade even many otherwise skeptical Republican state officials (like the ones in my home state of Michigan) to take the money and expand their programs.
As of today, forty of the states have expanded Medicaid, if not through legislative action then through ballot initiative. That’s the single biggest reason the U.S. uninsured rate is at record lows. But conservatives object to all of the taxing and spending Medicaid expansion requires, and say the government intervention makes health care worse, not better. They’ve tried to block expansion where they could—which is why ten Republican-led states still don’t have it—and in 2017 they made sure the GOP’s Obamacare-repeal bills included provisions to take away the extra funding.
All of those bills failed, including an attempt that the late Arizona Republican John McCain killed with a dramatic thumbs-down gesture on the Senate floor. The ensuing political backlash (Republicans got hammered in the 2018 midterms) is a big reason why Republicans have mostly gone out of their way to avoid making overt threats against either the Affordable Care Act or Medicaid.
But the interest in ending expansion funding is still there—in no small part because the money is still there—and in recent years especially Republicans have spun their efforts more as an attempt to preserve Medicaid for what they say are the truly vulnerable groups that need it.
One source for this argument is the Paragon Health Institute, one of several think tanks launched by alumni of the first Trump administration, whose researchers have argued that adding all of these working-age, childless adults to Medicaid has put extra financial strains on the program, while overwhelming the doctors and other providers who see Medicaid patients. As a result, these researchers say, the children, pregnant women, seniors, and people with disabilities who had previously depended on the program now have a harder time getting care.
In addition, Paragon’s researchers argue, the extra funding for Medicaid expansion effectively “discriminates” against the vulnerable, because it means the federal government is subsidizing working-age, childless adults at a higher rate than it is for children, pregnant women, and the elderly.