Feds woo Georgia, other Medicaid expansion holdouts with billions

In October, Georgia Gov. Brian Kemp signed an agreement with the Trump administration to create a $218 million-per year plan that limits the new Medicaid coverage pool to about 50,000 uninsured Georgia adults. The Biden administration aims to sweeten Georgia's reason to expand Medicaid to more than 350,000 other low-income Georgians. Ross Williams/Georgia Recorder

WASHINGTON—U.S. House Democrats are trying again to entice Georgia and other holdout states to expand Medicaid coverage with the prospect of billions of dollars in federal cash.

The new offer, included in a massive $1.9 trillion COVID-19 relief package that House Democrats are pushing through committees this week, could help provide health coverage to more than 2 million Americans – more than 400,000 in Georgia. They are falling between the cracks in government programs in the midst of the pandemic and economic downturn.

Most are childless adults who earn some money but still fall below the federal poverty income level, or about $12,880 per year.

In the vast majority of states, people in that situation could qualify for Medicaid, a public program that provides health insurance to low-income people and people with disabilities.

But in Georgia and 13 other states that have not yet expanded Medicaid, they are still ineligible for that program. Meanwhile, they are still too poor to get subsidized private coverage through insurance exchanges.

Edwin Park, a research professor with the Center for Children and Families at Georgetown University, said the House proposal could “move the dial” in some states.

“For others, unfortunately, I think they may walk away from this very good deal,” he said.

Holdout states in addition to Georgia include Florida, North Carolina, Kansas, Tennessee and Wisconsin.

Georgia’s GOP leaders have resisted fully expanding Medicaid’s income eligibility to include people who make 138% of the poverty rate since the state became eligible to do that eight years ago under the Affordable Care Act.

In October, Georgia Gov. Brian Kemp signed an agreement with the Trump administration to create a $218 million-per year plan that aims to expand Medicaid coverage to about 50,000 uninsured Georgia adults who could be covered – if they satisfy a work or activity requirement of 80 hours a month. It is set to begin in July with the final piece taking effect in January 2023.

The U.S. Supreme Court announced in December that it would hear a case to determine whether Georgia and other states can impose work requirements on Medicaid recipients.

Kemp said at the October signing that expanding Medicaid outright would be too expensive, costing the state $550 million a year.

If Georgia fully expanded Medicaid with the federal government absorbing 95% of the tab, the state could cover an additional 350,000 uninsured people, said Laura Colbert, executive director of Georgians for a Healthy future. She said an estimate by the governor’s own Office of Planning and Budget a couple of years ago calculated that once savings from programs or services that would instead be covered by Medicaid are factored in, the cost of full expansion is effectively a wash with Kemp’s Patients First program.

“It’s heartbreaking, frankly, to see our state continue to pass up what we think is the most cost-effective, moral and common sense investment in our people and in our health care system,” Colbert said. “And that heartbreak grows when it’s in the midst of a pandemic.”

Supreme Court ruling

The gap that many low-income people fall into was created when the U.S. Supreme Court struck down part of the health care law, also known as Obamacare. The court said Congress could not make states expand their Medicaid programs.

But states have gradually signed on over the last decade, because Congress provided them such big financial incentives to do so. At first, the federal government picked up the entire cost of adding childless adults and others to the Medicaid rolls. These days, it still covers 90 percent of the cost. The federal government last covered 95% in 2017.

Throughout much of the South, along with places like Kansas, South Dakota, Wyoming and Wisconsin, though, state officials have resisted calls to expand their Medicaid programs. Republicans in particular have balked at what they see as an overreach by the federal government.

The latest measure, though, would add a new twist. It would give holdout states more money for the patients they are already covering if they agree to expand Medicaid.

“Even though states still pay 10 percent [for the new patients], they would still come out ahead,” said Robin Rudowitz, the co-director of the Kaiser Family Foundation’s Program on Medicaid and the Uninsured. “I think that changes the math.”

An analysis by the left-leaning Center on Budget and Policy Priorities shows that states would gain substantially under the Democratic proposal:

  • Florida could receive $3.5 billion.
  • North Carolina would be in line for $2.4 billion.
  • Georgia could bring in $1.9 billion.
  • Tennessee could collect $1.7 billion.
  • Wisconsin could gain $1.3 billion.
  • Missouri could receive $1.7 billion.
  • Kansas could bring in $330 million.

Texas stands to gain the most, with a potential of bringing in nearly $6 billion. The extra money would end after two years.

How Medicaid works

Medicaid is run jointly by states and the federal government. The federal government reimburses states a set amount of the money they spend on the program, and that rate varies by state.

States whose residents have lower average incomes get higher reimbursement rates. In March, Congress increased the reimbursement rate for all states for as long as the COVID-19 emergency remains. The Biden administration has said it will extend that emergency until at least the end of 2021.

The House proposal would further increase the reimbursement rates for new expansion states by 5 percentage points.

The new incentives would be part of a larger congressional effort to address the fallout of the COVID-19 pandemic. Democrats’ relief bill covers everything from distributing vaccines to supporting transportation networks to doling out stimulus checks.

That health emergency has also changed how state officials view an expansion of health insurance eligibility, Rudowitz said.

“The pandemic has certainly highlighted the issues around the need for health coverage, and you have more people [in states that haven’t expanded Medicaid] becoming uninsured as related to the economy,” Rudowitz said.

Even before the pandemic, Georgia’s uninsured rate consistently ranked among the highest in the country.

States may resist

Park said that the federal government picks up the costs of the expansion, and people who get health coverage demand fewer state services.

“The fiscal impact of [Medicaid] expansion has always been positive… But some states may resist for ideological reasons rather than looking at the numbers.”

The House Energy and Commerce Committee is set to hold a hearing on the proposed changes Thursday morning.

Among the other changes that the lawmakers are considering are measures to ensure that women retain their Medicaid coverage for up to a year after giving birth; fully covering the cost of COVID-19 vaccines under Medicaid; and allowing prison inmates to qualify for Medicaid 30 days before they are released.

Georgia Recorder Editor John McCosh contributed to this report.