September 2009 U.S. Poverty Action
Expanding Medicaid as Congress Moves on Health Reform
NOTE: This action assumes that you have a basic knowledge of health reform issues and the workings of the legislative process. Use our e-mail system to tell Congress to Expand and Strengthen Medicaid in Health Care Reform. For outreach events or letter-writing meetings, RESULTS recommends you use the September 2009 outreach action sheet.
Schedule conference calls with Senate health aides to discuss a strong Medicaid expansion
Note: To find contact information, including telephone numbers and addresses for congressional offices and the names of the health staffer, visit the Take Action Now page of this RESULTS website. Please contact the RESULTS staff for updated talking points when you have a conference call or lobby meeting scheduled.
Building on Medicaid to Cover Low-Income, Uninsured Americans
Medicaid is a program that pays for medical assistance for individuals and families with low incomes and resources. Medicaid is larger than any single private health insurer, providing health coverage for 60 million low-income people, people including 29.4 million children, 15.2 million adults, 8.2 million people with disabilities, and 6.1 million seniors. It is also the largest children’s health program in the country, and arguably the most comprehensive and effective plan for children available. Medicaid provides an array of supportive and enabling services that are specifically suited to meet the needs of low-income Americans, such as transportation, case management and habilitation services that private plans do not typically cover. It also provides a number of health services not offered by private insurance that are tailored to meet the needs of low-income people who have serious disabilities, chronic diseases, or other complex health conditions. In addition, Medicaid expands access to care in underserved communities by offering services through rural and community health centers, safety-net clinics and school-based health providers. Finally, Medicaid protects its enrollees from unaffordable out-of-pocket costs. Private insurance, even with subsidies, is substantially more costly than Medicaid coverage because federal policies limit how much a person on Medicaid can be charged for services. For low-income populations, offering dependably low cost-sharing for medical services is essential. Research shows that even a modest increase in costs can make it difficult for low-income people to obtain and keep coverage and that higher costs cause low-income individuals to use less primary and preventative care.
To qualify for Medicaid, an individual must meet financial criteria and also be part of a group that is “categorically eligible” for the program, such as low-income children, pregnant women, the elderly, people with disabilities, and parents. Unfortunately, these levels vary by state and by category. For example, only 16 states and the District of Columbia provide Medicaid to parents with incomes up to the federal poverty line (18,310 a year for a family of three), and the national median eligibility level for parents is a mere 67 percent of the federal poverty line ($12,268 for a family of three). Adults without children and non-custodial parents are prohibited from enrolling in Medicaid in 43 states, even if they are extremely low-income. By expanding Medicaid to cover everyone below 133 percent of the federal poverty line ($24,352 for a family of three in 2009), we could reduce the number of uninsured persons by at least one-third. Expanding coverage for low-income parents is also an investment in the health of low-income families, as children in families where parents have coverage are more likely to receive regular check-ups and screenings which support healthy growth and development.
An estimated one-quarter of all uninsured individuals are eligible for Medicaid, and three-quarters of uninsured children are eligible for coverage in Medicaid or the Children’s Health Program, but they face barriers to enrollment. Creating a national standard for Medicaid eligibility of at least 133 percent of the federal poverty line would also go a long way toward simplifying and increasing the effectiveness of outreach and enrollment efforts. Currently, each state determines its own eligibility requirements. More uniform eligibility standards should be accompanied by measures to simplify complex enrollment and renewal procedures that make it difficult to obtain or keep coverage, such as burdensome documentation and face-to-face interviews. In addition, renewal procedures that require verification of eligibility more than once a year, causing disruptions in care, should be limited to every 12 months to ensure that individuals do not find themselves without coverage. States have already seen significant increases in the number of children who are enrolled in the Children’s Health Insurance Program as a result of reformed enrollment procedures. These measures, which improve efficiency and decrease administrative costs, should be implemented in all state public health programs to ensure that they are reaching all potential participants.
Investing In Medicaid to Ensure States Expand Quality Coverage
The Medicaid program is a state-federal partnership and therefore funding for Medicaid is dependant on state budgets. In initial proposals for expanding Medicaid as part of health reform the cost of expansion would be covered exclusively by the federal government, but as policymakers are pressured to cut the cost of health reform bills, committees in both the Senate and the House are considering decreasing federal funding for Medicaid expansions. Full federal financing for Medicaid expansions is critical to ensuring that states have the capacity to cover newly eligible populations while retaining the comprehensive benefits and low cost-sharing (amount paid for deductibles and co-pays) that have allowed Medicaid to meet the needs of low-income people so successfully. In the recent economic downturn, when Medicaid was needed most, many states were looking to cut back the program to save money (the economic recovery package helped stave off these cuts). If states are forced to finance part of this much-needed expansion in Medicaid, they may again be forced to cut benefits or reduce enrollment. This would undermine the purpose of the expansion — to provide the uninsured with qualify, affordable health care. Full federal financing for Medicaid expansion would ensure that states have reliable and adequate funding for this vital safety net.
Some Likely Objections & Responses
Under health reform subsidies will be provided to make purchasing private insurance in a new Health Insurance Exchange more affordable for all Americans. If low-income Americans have access to affordable coverage options is expanding Medicaid still necessary? Absolutely. The cost of Medicaid coverage is well below that of private coverage, even with subsidies. For low-income people, protection against increases in out-of-pocket costs is essential, as even modest premiums can cause coverage to become unaffordable or deter patients from seeking medical care because of its cost. Expanding Medicaid is the most cost-efficient method of providing coverage to low-income, uninsured Americans. In fact, providing subsidized private coverage for a low-income person in the Exchange would be more expensive for the federal government than providing the same person with coverage under Medicaid. The Medicaid program also provides additional services, not generally covered by private insurance plans, which address the specific barriers to accessing care that are faced by low-income Americans, such as availability of care in underserved communities, counseling services and transportation.
Federal resources are limited and the government can not afford to fully finance state Medicaid expansions. Full federal financing for Medicaid expansions is a necessary measure to ensure that quality of services and efforts to increase enrollment are not compromised when states are balancing their budgets. We need to do health reform right — and that means providing the resources to help the most needy get the coverage they need, and not passing the buck to states which cannot afford to implement these changes.
I hear from constituents that Medicaid participants have difficulty finding health providers in their communities that accept Medicaid. The House health reform bill (H.R.3200) would raise the reimbursement rates for primary healthcare providers (including pediatricians) in Medicaid to the levels that Medicare pays now. Higher reimbursement rates will encourage more providers to participate in the program, which is critical to improving access to coverage and ensuring that Medicaid expansion leads to increased use of preventative care. In addition, RESULTS has worked to secure funding for Community Health Centers and we hope that this investment will be reinforced through full federal financing for increased Medicaid reimbursement rates.