Medicaid expansion is under reconsideration in red states

Some GOP-led states that previously declined to expand Medicaid are reconsidering that decision now that the $1.9 trillion pandemic-relief package has made billions of dollars available to enlarge the program.

The legislation passed by Congress last month boosts federal funding for two years to states that expand Medicaid, more than covering a state's cost for increasing eligibility for the program, which is currently used by almost 79 million low-income and disabled people.

The availability of more federal funds is putting pressure on Republican leaders in some of the 12 states that haven't expanded the program.

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In Georgia, advocacy groups such as Cover Georgia recently ran ads urging Gov. Brian Kemp to fully expand Medicaid because the state would receive more than $1 billion in new federal funds over two years. The governor "has already rolled out significant reforms aimed at expanding access," according to a statement from Mr. Kemp's office.

Alabama Gov. Kay Ivey's office has signaled she is open to discussing the funding for expansion.

A bill expanding Medicaid recently advanced in Wyoming. Gov. Mark Gordon "is still considering the long-term implications of the bill, but he understands the opportunities before Wyoming, including the new federal funding," his spokesman said.

The interest is raising hopes in the Biden administration, which is looking to expand Medicaid following the Trump administration's initiatives to curtail the program's spending. But the push to reboot Medicaid could falter because the administration is also rescinding Trump-era policies, such as Medicaid work requirements, which GOP-led states have sought in exchange for expansion, according to conservatives.

Biden administration officials declined to comment.

"The Biden administration is being pretty shortsighted here," said Brian Blase, who developed health policy as a special assistant in the Trump administration. "Many conservative states are concerned about federal overreach."

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The Biden administration told Arkansas and New Hampshire last month that it would be withdrawing federal approval for their work requirements, which generally mandate that beneficiaries log 20 or more hours on a job, look for work, perform community service or take educational classes to get their Medicaid benefits. Both states expanded Medicaid but added the requirements on some beneficiaries.

The rescinded agreements are a blow to other Republican-led states that want work requirements or more local control of Medicaid as part of any future expansion.

Some Tennessee lawmakers who have opposed expansion have said they are open to discussing it now because of the new funding.

But they want the Biden administration to preserve a Trump administration agreement that lets Tennessee convert the open-ended funding for the program to a block grant, which would essentially cap the federal funding.

Democrats say the change would harm beneficiaries, while Republicans argue it gives the state more autonomy over Medicaid spending.

Tennessee Lt. Gov. Randy McNally, who is also speaker of the Republican-controlled state Senate, "believes the proposal is one that should be studied. While the broad strokes have been released, the details still need to be fleshed out," according to a statement from his spokesman.

The spokesman added: "Before the state can make any decision about how to proceed, more information about what flexibility would be offered and how an expansion would interact with our block grant is needed."

A spokesman for Tennessee Gov. Bill Lee, also a Republican, didn't respond to an email seeking comment.

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The Biden administration released information in a recent call with state leaders about the total federal funding for expansion that is now available.

Under the $1.9 trillion relief package, states that hadn't expanded when the bill passed would be eligible for a 5-percentage-point increase in their traditional federal funding match for Medicaid for two years. States can opt to expand at any time.

That amount is in addition to the 6.2-percentage-point increase in the match rate provided under previous Covid-19 pandemic legislation.

Texas stands to get more $3.9 billion under the funding boost over two years and could see more than two million uninsured people become eligible for coverage, according to the Centers for Medicare and Medicaid Services. Some state lawmakers who would have to approve any expansion have introduced bills to enlarge Medicaid, although the effort faces a tough road to passage, according to some Republicans.

Florida would reap more than $2.5 billion and expansion could provide healthcare to more than one million people, according to CMS.

"The governor remains opposed to the expansion of Medicaid in Florida," said Cody McCloud, a spokesman for Gov. Ron DeSantis.

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Some Republican state leaders have also opted not to enlarge Medicaid because they oppose the Affordable Care Act, which set up Medicaid expansion. Others are concerned that federal expansion funding could eventually be reduced and leave states shouldering more costs.

Medicaid advocates are planning to push the remaining 12 states to expand Medicaid, saying it's essential for lowering the U.S. uninsured rate and improving healthcare.

"This is a change moment in history," said Joan Alker, executive director and co-founder of Georgetown University's Center for Children and Families, an advocacy group. "A lot of things are happening, and this is a very fast-moving environment. Having just lived through a pandemic, it's even harder now to argue against expansion."