Consumer / Employer, Payers

Is Medicaid Expansion Still a Political Wedge Issue?

When Medicaid expansion was first enacted, it was a hot topic debate between Democrats and Republicans. But more and more states are starting to expand Medicaid, including several conservative states.

Medicaid, coverage,

The Affordable Care Act passed in 2010 initially called for the expansion of Medicaid across the country. But in 2012, the Supreme Court decided that it should be left to the individual states to decide whether they wanted to expand Medicaid to cover nearly all adults under the age of 65 with incomes up to 138% of the federal poverty level.

As a result, the topic of Medicaid expansion quickly became a political hot topic, with Democrats largely in favor of it and Republicans largely against it. In 2014, when Medicaid expansion first took effect, only 26 states and Washington D.C. implemented it. But since then, more and more states have come on board, including several conservative states and those whose politicians/governors were against it. Some states included waivers that slightly changed the Medicaid program, like having a work requirement or enacting premiums. Some other states have left it to the voters to decide through ballot measures. Now, 13 years after ACA was passed and nine years after Medicaid expansion first took effect, just 10 states have not adopted it. North Carolina has adopted it but hasn’t implemented it yet.

The 10 states that have not adopted expansion are: Texas, Wyoming, Kansas, Wisconsin, Tennessee, Mississippi, Alabama, Georgia, South Carolina and Florida.

One advocate of Medicaid expansion said the topic isn’t as controversial as it once was.

“I think it’s becoming less of a wedge issue,” said Laura Harker, senior policy analyst of the nonpartisan Center on Budget and Policy Priorities, in an interview. “I think the public has really been strong in their desire and support for getting more people access to health coverage.”

But some on the other side of the aisle think Medicaid expansion is at a stand-still with states.

“I think that expansion has kind of played itself out to the point where I think the sides are pretty well defined and that’s probably where it will stay for the time being,” said Nina Owcharenko Schaefer, director of the Center for Health and Welfare Policy at The Heritage Foundation, a conservative think tank. 

What is Medicaid expansion?

Prior to the Affordable Care Act, the Medicaid program mostly only covered low-income children, their parents, pregnant women, those with disabilities and some other groups. Medicaid expansion mainly expanded coverage for two groups: low-income adults without children and those who are still low-income but previously made too much money to qualify for Medicaid.

With expansion, nonelderly adults with incomes up to 138% of the federal poverty level ($20,120 annually for individuals in 2023) are eligible for Medicaid, according to KFF. The federal government pays 90% (though it used to be 100%) of the costs for this expansion in coverage for lower-income people, and the state covers the rest.

In states that opted not to expand Medicaid, the median income limit for parents is 38% of the federal poverty line, KFF showed. This represents an annual income of $9,447 for a family of three in 2023. Unlike in states that opted to expand, those without children are still not eligible no matter how much they make annually in most non-expansion states unless they qualify based on having a disability.

“People sometimes forget and don’t really understand that even people who had zero income, unless they qualified on the basis of a disability, adults without dependent children really had no pathway for coverage prior to the ACA — and this is still the case in most non-expansion states,” said Robin Rudowitz, vice president of KFF and the director of the Program on Medicaid and the Uninsured, in an interview. She noted that this is the case in “most” non-expansion states because Wisconsin has a waiver that provides coverage to adults without dependent children. 

In the states that have not expanded Medicaid, there is what is known as the “coverage gap.” Those in the coverage gap make more money than the state allows to get coverage but are still below the federal poverty level, and are therefore ineligible for ACA Marketplace subsidies. About 1.9 million people are in the coverage gap in the states that haven’t expanded, according to KFF.

“They really just don’t have an option for comprehensive affordable coverage,” Rudowitz said.

Rudowitz added that with the unwinding of the continuous enrollment requirement (which barred states from disenrolling members from Medicaid during the Covid-19 public health emergency), more people could fall into the coverage gap.

What are the arguments for and against Medicaid expansion?

According to a KFF literature review, Medicaid expansion has led to positive effects across a range of areas, including mortality, social determinants of health and the economy. Medicaid expansion led to a 3.6% decrease in mortality, increased access and utilization of healthcare for pregnant mothers and improved access to care in rural areas, KFF reported. In addition, expansion led to increased revenue and net state savings by reducing state spend on areas like substance use disorder.

Harker of the Center on Budget and Policy Priorities backed up these positives of Medicaid expansion. She noted that with the funding states receive through the federal government, “they’re able to do more with their budget.” And there are several positives for patients as well.

“First and foremost, it’s most important that people are getting coverage and that they’re able to get seen for issues they weren’t able to be seen for before and that their health can improve. … I see a lot more people reporting that they have access to primary care, they have a provider now,” Harker said. “People are finding and getting care for conditions earlier rather than when they reach a critical point, which can help reduce emergency room usage as well.”

Another researcher in favor of Medicaid expansion echoed Harker’s comments, noting that many of those who would benefit from expansion are people who are working adults but without employer-sponsored insurance.

“A large majority of people who qualify for the expansion … are often working in industries like construction or hospitality,” said Adam Searing, research professor at Georgetown University’s Center for Children and Families. “When you look at the data there, then that argument says people are working but they can’t get covered.”

The public is in favor of Medicaid expansion as well: two-thirds of those in non-expansion states say they want the state to expand Medicaid.

Owcharenko Schaefer of The Heritage Foundation, however, believes that Medicaid expansion directs attention away from those who need the care the most.

“Why are we paying able-bodied, childless adults a 90% match rate when the real cost and needs are among disabled and the elderly? … I think it’s an unfair way that the Affordable Care Act set up the expansion where you are choosing one group and one population over the other by having a skewed payment rate,” she said. 

She added that there need to be improvements in the regular Medicaid program before more people are added.

“We still have waiting lists on Medicaid for other populations,” Owcharenko Schaefer said. “I think that Medicaid expansion and the Affordable Care Act were for optic reasons to say, ‘Look, we’ve provided coverage to all these people.’ But I think we really need to get back to looking beyond just providing people coverage and making sure that they’re getting the right care that they need.”

Sally Pipes, president of the Pacific Research Institute, also addressed the problem of wait times in a 2022 essay published in Forbes. She cited that specialty care wait times for Medicaid patients in Colorado are 1.4 times longer than privately insured patients.

“By expanding Medicaid, states have dramatically increased the number of patients on the program’s rolls. Meanwhile, the number of doctors willing to see those patients has largely stayed the same. That’s a recipe for long waits—and ultimately poor health outcomes,” Pipes said.

Is it still a major political issue?

While some states are holding strong in their opposition against Medicaid expansion, Searing said that he’s starting to notice a shift in Republicans’ opinions. 

Take North Carolina for example, where Searing is based and where expansion has been adopted but has yet to be implemented. Searing laid out in a May blog post several Republican leaders’ comments in regards to North Carolina’s Medicaid expansion, including:

  • “And I think, when you first talk about expansion, it is like – and this was what they said to me – oh, no, we’re expanding another government entitlement program. The neat thing about this program is, it doesn’t cost the state any money,” said State Representative Donny Lambeth (R-Winston-Salem) on PBS NewsHour.
  • “As a physician and former state legislator, I am supportive of Medicaid expansion. It will go a long way toward helping our middle class. Hospitals, especially our rural hospitals, will have stability,” said Congressman Greg Murphy (R-NC) on WNCT.

“The language of Republicans who passed expansion in North Carolina has shifted significantly … and Republicans started sounding a lot more like Democrats,” Searing said.

When asked if he believes the expansion is still a wedge issue between conservatives and liberals, Searing said it’s still a political debate though not as heated as in the past.

“I think it’s becoming less [of an issue],” he said. “But let’s not be naive, if you look at the states that haven’t expanded, the three biggest ones with the vast majority of people that would benefit are Texas, Florida and Georgia.”

Owcharenko Schaefer, meanwhile, believes that the states that haven’t expanded likely won’t expand any time soon.

“I think it’s at a stalemate,” she said. “I think the lines are drawn and I think the attempts by the Administration to further bribe the non-expansion states has not worked.”

But Harker has a bit of a different view, recalling the implementation of the original Medicaid program. 

“I feel fairly confident that all states will adopt Medicaid expansion at some point in the future,” she said. “I don’t want to speculate on the timeframe, but we know the 2 million people in the coverage gap need this to happen sooner than later.

“When Medicaid was first created in 1965, it took more than 17 years for all states to adopt it, but now every state in the country participates,” Harker continued. “It is difficult to imagine that any state would indefinitely deny access to basic lifesaving health coverage to their people, especially when it helps states so much economically.”

Photo: designer491, Getty Images


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