More Governors Embrace Medicaid Expansion, But With Changes

When Indiana became the latest state to expand its Medicaid program, the reaction across the health advocacy community was decidedly mixed.

While the decision represented yet another step toward a goal of expanding government-funded health insurance to millions of lower-income Americans, it came at a price — one some advocates say may be too expensive to pay.

“We are delighted that approximately 350,000 low-income, uninsured Hoosiers will now have the opportunity to secure health coverage,” Ron Pollack, executive director of advocacy group Families USA said in a written statement. “However, the approved plan includes some troublesome provisions that will need to be carefully monitored and should not be a model for other states.”

Indiana’s plan, approved last week by the federal government, creates different tiers of coverage for lower-income residents. The basic level does not require payments from enrollees, but better coverage calls for a monthly fee ranging from $1 to $25.

The Indiana plan also includes copays for emergency rooms, a provision designed to encourage judicious use of emergency services. In addition, participants will be required to contribute to a hybrid health savings account and those who don’t make payments could face mandatory copays or loss of coverage.

The federal government will pick up the lion’s share of the cost, but Indiana’s portion will be funded through hospital fees and an increase in the state’s tobacco tax.

Many of these elements are unprecedented for traditional Medicaid coverage. But they’ve become increasingly part of negotiations between the federal government and Republican-led states, such as Indiana, that are seeking to both expand and change Medicaid.

As other states debate whether to expand Medicaid, Indiana’s blueprint could result in bolder, more drastic changes to the program. Some advocates worry those changes could push Medicaid further away from its original purpose, which was to provide affordable health insurance for the needy.

One state where Indiana’s plan likely won’t have a momentous effect is Missouri.

Sen. Ryan Silvey, a Kansas City Republican, has been leading the charge to adopt what he calls a conservative solution to Medicaid expansion. He says his plan goes farther than Indiana’s in reshaping Medicaid in a Republican image.

“A lot of what Indiana did is what we were already proposing,” he said. “And we were doing it without a tax increase.”

But Silvey said he hasn’t been able to sway reluctant colleagues.

Tough negotiations

There are trade-offs the administration of President Barack Obama has to consider when negotiating with Republican states on their Medicaid programs. It needs to hit a sweet spot in expanding access to insurance while conserving core principles of Medicaid.

But some advocates worry that the agreement with Indiana threatens that balance, with politics to blame.

Negotiating with states on proposed waivers can involve a tricky political calculus. Health officials are trying to advance the agenda of a Democratic president while seeking to meet the demands of Republican governors — many of whom, including Indiana’s Mike Pence, have a eye toward the White House.

“There are a lot of very complicated policy issues at stake,” said Joan Alker, executive director ofGeorgetown University’s Center for Children and Families. “And intense politics does not always lead to good policy.”

While the Obama administration has given GOP governors more leeway on areas like recipient cost-sharing, it’s held the line on other areas. Most notably, the administration has refused to allow a policy favored by some conservatives that conditions Medicaid coverage on job status.

For some, the federal government’s acceptance of even some of the Medicaid changes sought by GOP governors underscores a key reality: The more people who get insurance under the Affordable Care Act, the harder it will be for politicians to ditch the program.

But experts caution that line of thinking won’t lead to better health outcomes for residents.

“It’s thinking less about public health and more in terms of what do we need to do to make sure we get more people insured,” said Thomas McAuliffe, director of health policy at the Missouri Foundation for Health.

For its part, the government says it will continue to work with states on new plan designs to expand Medicaid to more people. The Obama administration says it wants to provide affordable, quality health insurance to as many Americans as possible — a feat it says it is accomplishing through negotiations with states.

“These agreements have brought access to quality, affordable health coverage to millions of people across the country, many for the first time,” said Ben Wakana, a spokesman for the U.S. Department of Health and Human Services.

Advocates, like McAuliffe and Alker, worry that higher recipient cost-sharing championed by conservative governors could discourage people from participating in the program.

They are keeping a close eye on Medicaid expansion debates in other Republican-led states, like Tennessee, Utah and Wyoming. Tennessee Gov. Bill Haslam‘s plan, for example, would charge premiums to recipients with incomes above the federal poverty line and suspend their benefits for two months if they don’t pay.

Silvey, the Missouri senator, is also watching developments in those states. While he didn’t see Indiana’s decision as a turning point in Missouri’s debate, the continued push by other Republican states could be definitive.

“As more and more conservative states and Republican governors move forward with their own plans, the world gets smaller for those not coming up with solutions,” he said.

It remains to be seen what Medicaid will look like as more and more states get approval to push it in a new direction.

Categories: Medicaid, Reporting Consortium, States, Uninsured