CareTalk Podcast – Which States Will Expand Medicaid?

12 states have yet to expand Medicaid. Who’s next? And why does it matter? John and David take a look at the outstanding states and speculate about where Medicaid goes from here.

David Williams:

John, Kansas governor Laura Kelly says, “It’s dumber than ever not to expand Medicaid.”

John Driscoll:

Well, let’s check out what those smarter states are doing, David.

David Williams:

That would mean roaming to Wyoming.

David Williams:

Welcome to Care Talk. America’s best home for incisive debate about healthcare business and policy. I’m David Williams, president of Health Business Group.

John Driscoll:

And I’m John Driscoll, the CEO of CareCentrix.

David Williams:

So John, it’s 2021. Let’s talk about Medicaid expansion.

John Driscoll:

Oh, haven’t we already covered this, David. I thought all of, what’s the status of Medicaid expansion? This is how many years post the ACA. Isn’t this old news?

David Williams:

Well, John, it is. It’s not even news. It’s like a history lesson now because it’s from 2010, the Affordable Care Act, some of our listeners weren’t alive then, but as part of the Affordable Care Act expanded coverage, and one of the things was just to make it so that people could get Medicaid, which is the program, comprehensive healthcare insurance for the poor.

John Driscoll:

So finally, you’re going to start explaining what we talk about. Remember, Medicaid is different from Medicare. Medicare is what you qualify as a senior citizen for, so that you can get all of your stuff for free, or at least that’s what you and my mother seemed to think. And Medicaid is the state federal program historically set up for the poor and in some cases the disabled. And I thought the ACA fixed this, David.

David Williams:

Well, John, it did. But as you recall, after the Affordable Care Act was passed in 2010, there was all manner of attempts to undermine it. And the Supreme Court surprisingly said, “Hey, you can’t have the expansion of Medicaid be automatic. You can’t force the states to do that.” So the States then decided, some of the states that were just trying to undermine the affordable care act overall just said, “Well, we won’t take the Medicaid expansion.” Even though the feds were paying for essentially the whole thing.

John Driscoll:

I think the way it worked was, and the hard part about defending healthcare and any healthcare change is we have a patchwork set of programs. We’ve got commercial insurance for the privately insured. We’ve got Medicare for the elderly and we’ve got Medicaid already in some portion in pretty much every state of the union, I believe. I think either Arizona or Nevada was holding out for many, many years, but even they are part of the federal program. And it’s partially funded by the states, partially by the feds. And so that creates the opportunity for the states to create mischief. But what’s happened? Because the goal I believe was to gap the coverage between the people who were traditionally covered at a state level for Medicaid and those that would qualify for the exchanges. What’s happened with that Medicaid expansion, which is effectively a federal investment in providing coverage for those who were between the level of qualifying for the exchange with a job or being so poor, they would be on traditional Medicaid.

David Williams:

Well, John, the story is that, as you mentioned it, the Medicaid is a federal state partnership program. It’s usually been roughly 50, 50 funded by the states and funded by the federal government. So it is a very high expense for the states. Now, the expansion population was paid for essentially completely by the feds. Now what’s happened is that 38 states expanded Medicaid, 12 still haven’t expanded it, leaving about 2 million people in that coverage gap between Medicaid and the exchanges. What’s happened now that’s different and why we’re talking about it now, other than that we ran out of other things to talk about and we couldn’t get any guests to join us, is that COVID has shown the importance of universal coverage. And also…

John Driscoll:

Oh, stop. You don’t think universal coverage was something we had to do before COVID? I mean, please.

David Williams:

John, I think what happened before is people would say, “Hey, my neighbor, I don’t want him to get a freebie. I don’t want him to get free stuff, free insurance.” But now it’s like, “My neighbor might have COVID and maybe I do care that he can go get tested rather than saying I can’t afford it and end up spreading COVID all over the place.” So that’s one of the things that happened, John, and then in the pandemic relief bills, the federal government has basically made it even almost essentially profitable for the states to take the Medicaid expansion. So that’s changing the calculus, so to speak.

John Driscoll:

I think, what is it? That there was going to be a match to the states. And now there’s a 5% boost. They’re almost adding a bonus for those states that are going to expand. And I think one of the things that you’ve skipped over in your cursory coverage of this is that the results from the Medicaid expansion, or that federal investment in greater coverage, have actually been quite successful. The coverage obviously is provided. People can go to get their primary care.

John Driscoll:

They can go get that COVID test. But I think what it’s shown is there’s been no negative impact on people going out for jobs. There’s been actually Medicaid costs on a per member per month basis are actually rising at a slower rate for those states with Medicaid expansion and those that have not expanded. And I think it’s also been a help to the states with this Medicaid expansion to reduce costs in other areas. So David, what are all those friends of yours in red states doing that they are pushing back on what seems to be a tails I win, heads I win proposition to expand Medicaid.

David Williams:

So John, I would like to tell you a couple of things. So one is my favorite place is Missouri for this purpose. And sorry to all the wonderful folks in Missouri, but I think it’s called the show me state. Now I would advise not moving there if you’re going to be poor, John, because you know what it takes, if you want, Medicaid as a family of three, you have to make under 21% of the federal poverty level. That is under $5,400 per year for a family of three. Now the good folks of Missouri actually went to the polls and they approved a constitutional amendment to expand coverage and have Medicaid expansion.

John Driscoll:

People voted for it. They wanted it. And I’m sure the Republican leaders in this red state have quickly followed to support what the majority has voted for. Is that what’s happened?

David Williams:

Well, John, there you go wrong. Okay. Because the chair of the budget committee in Missouri said the federal government has no money, and there’s another rep who said, “Even though my constituents voted for this lie, I’m going to protect them from this lie.” I’m losing track of which lie it was John, but this actually passed by that six percentage points. So it wasn’t even very close, but they just desperate to keep it out. So go figure, John.

John Driscoll:

Well, my favorite for those states that won’t do it, at the point at which you’re at a hundred percent and adding a bonus, effectively, what’s happening is those states that aren’t expanding are paying for the privilege of denying coverage. It’s extraordinary.

David Williams:

Well, John in Kansas, the democratic governor and in what is more or less a Republican state, and she said it was, “Dumber than ever not to expand Medicaid.” And what they’re doing there, talking about dumber than ever is they’re going to say, “Well, let’s actually legalize marijuana to help pay for it.” And it actually almost passed in 2020, but there was a legislator who wanted to tie an anti-abortion bill into it.

John Driscoll:

I thought you were just excited about the legalization of pot there, David. But the thing that I think is frustrating is the Medicaid expansion, not just because it’s a low cost, no cost alternative for these states. Some of whom have a lot of poor people, but healthcare inflation is slower. And by a material amount, I believe that those states without Medicaid expansion or have their Medicaid budgets, the cost to the state growing at nearly 7%, and those that do have Medicaid expansion growing at 4.4%.

John Driscoll:

The lie that people are not motivated to get jobs if they’ve get Medicaid, healthcare coverage was turned around. When you went in that Oregon study, where they looked at people who had won the lottery for the limited slots in Medicaid, they looked at the folks who got on Medicaid coverage and those who didn’t, and they pursued and succeeded at getting jobs at about the same rate. And you see other costs for the state budget, whether it’s mental health or incarceration, other things that the breakdown when you don’t have a health care coverage in place, this is a winner. And you’re even starting to see states like Wyoming voters and legislators actually support it.

David Williams:

Well, John, one of the things that now that we’re 10 years past the Affordable Care Act, and when many states expanded Medicaid is that there’s over 400 peer reviewed studies about Medicaid expansion and they show it works. And to sum it up in some of the different areas, one is that it expands access to care. Things like checkups, preventative care, mental health care, health outcomes in terms of lives saved, the financial security. Don’t forget, it’s not just about being able to go and visit the doctor. It’s about not having a huge debt and having medical bankruptcy and just a big drop in uncompensated care. So it’s fair also to those provider organizations. Also, Medicaid funds long-term care, and it’s definitely led to an increase in access to long-term care among lower income middle-aged adults who may need it.

John Driscoll:

I think it’s interesting, David. This is such an all topic positive. It’s hard to understand why states don’t do it. And you’re starting to understand as you go through the facts as to why many red states are voting for it. I don’t believe that for, I believe it’s been put up for a vote in a number of states. I don’t think the Medicaid expansion has ever lost when it’s been put to a vote at a statewide level. The thing that I think remains a problem is Medicaid coverage gets demonized by many of your red state friends as being a program for the poor and expansion of government. When it really is fixing a hole in the private marketplace. It’s really Medicaid completion. It’s making sure those poor people who should qualify for coverage, get it.

David Williams:

To be fair, John, you can see that there is this idea about, yeah, the government overreach, people don’t like that. You see in some states try to tie in work requirements. So it sounds like on the surface, “Hey, if you want something for free, you should at least go out and get a job and not be one of Ronald Reagan’s welfare queens that are just out there collecting their Medicaid benefits.” It turns out those requirements just put a lot of new bureaucracy and hurdles in place and maybe they make it so it’s more palatable to support if you’re really on the conservative or right-wing side, but it doesn’t actually get more people into the workforce and it decreases access because it creates too high hurdles for people that actually need coverage and were not going to be able to work anyway, like someone taking care of a new baby.

John Driscoll:

Well, the whole work requirements thing has been excessively studied for 30 or 40 years. And it has never proven to be either anything other than a disincentive to enroll in the program. It certainly has not been successful as an incentive for work, but there’s a lot behind this, David, as we start to build this bridge to complete the promise of coverage for more, if not coverage, for all, with the social benefits. You’re going to see Medicaid continue to, I think, evolve. One of the most exciting things we see at CareCentrix in this particular stage is whether it’s money follows the person, meaning you can get paid to take care of people at home, as opposed to in nursing homes or institutions, or whether it’s support for home healthcare workers and unskilled and skilled workers in the community, or the fact that Medicaid and Medicare, not just in managed care, but even through fee for service are starting to support and gap those social determinants problems, food and hunger, transportation, some of the housing issues that also drive healthcare costs when they’re not addressed.

David Williams:

John, we started off this podcast looking back 10 years to Medicaid expansion starting under the Affordable Care Act. And now you’re looking forward and seeing where Medicaid could go. In the presidential election in 2020, on the democratic side, there was talk about Medicare for all. Now I think that we haven’t heard much of that lately. I think that where things may go is a Medicaid for all as a basic coverage. So it’s a fallback for anybody, and then you can buy additional coverage if you want on top of that, or you can be covered. But that I think is a more logical starting place. Frankly, Medicaid is a lot more comprehensive in what it covers than other forms of health insurance, and already builds in a number of things to address some of these social determinants of health that you speak about. So it is a modern program in that sense that it’s more holistic. Some people don’t like it on the provider side because it doesn’t pay as well as Medicare or commercial, but in terms of being comprehensive, it’s actually a better program.

John Driscoll:

I think what you might see is managed Medicaid for all or managed Medicare for all. One of the challenges is these programs are rapidly changing and the politicization of the terms, whether it’s caid or care and the fact that they’re technical terms, it might’ve been, maybe we call it just to be innovative here, David care for the poor. And we could turn that into a managed care program. And not as many people are going to demonize David care as they will Medicaid.

David Williams:

John, I love the name. I’m sure my mother will be happy to hear it since she picked that name out as well. I’ll have to think of something clever as it relates to your name. I think our names aren’t weird enough to have …

John Driscoll:

But don’t you think that part of this is the demonization of government and if we could just call it something else, it would be harder to just demonize and attack.

David Williams:

I see. I thought you were going with like David care or Goliath care. I’ll stick with Goliath care. In any case, that’s it for yet another edition of Care Talk. I’m David Williams, president of Health Business Group.

John Driscoll:

And I’m John Driscoll, the CEO of CareCentrix. If you liked what you heard or you didn’t, please subscribe, give us feedback. We’d love to hear it. Thanks for listening.