Closing Obamacare’s biggest hole poses a dilemma for Democrats

Closing the Medicaid gap would fulfill President Joe Biden’s pledge to expand coverage to 2.2 million low-income adults in the 12 states where Republican officials have resisted the program for nearly a decade. It would also give Democratic lawmakers in those recalcitrant states – like Georgia’s Raphael Warnock, who is leading efforts in the Senate to close the Medicaid gap – an achievement to campaign on, with control of both houses up for grabs halfway through. next year and health care remains an important issue for voters.

The costly effort faces competition from other Democratic healthcare priorities scrambling to position themselves in infrastructure legislation, including an expansion of Medicare benefits and a permanent increase in financial assistance to healthcare professionals. people who buy coverage in the ACA health insurance markets.

Debate over how best to spend limited healthcare budgets could force Democrats to choose between leveraging their control of Washington to bolster the ACA, or playing a role for swing voters by adding dental coverage , vision and hearing in Medicare. Closing the Medicaid coverage gap is high among Democratic supporters, although independents and Republicans in a recent Kaiser Family Foundation poll said expanding Medicare benefits is a problem. highest priority.

“I am very aware that the poor are the first to be squeezed out when there is a budget problem,” said Representative Lloyd Doggett (D-Texas), whose home state has the uninsured rate. the highest in the country. “I really push to say: at least do something for the people who have been left out for over a decade and who have nothing to show for the Affordable Care Act. But it’s a tough sell.

Still, momentum to close the coverage gap has grown in recent weeks, after leading Democratic leaders embraced the effort. Congressional staff are still grappling with thorny policy questions of how to extend coverage to poor adults in states stranded by the expansion of Medicaid, but no clear preferred policies have emerged amid concerns about them. potential drawbacks. Some approaches could take years to put in place, cost more than executives want to spend, or inadvertently penalize states that have already rolled out Medicaid.

Advocates and Democratic lawmakers in states resisting Medicaid expansion say this month marks the first critical deadline in the effort, as congressional budget writers seek to finalize parameters for infrastructure legislation the party can go through reconciliation without Republican votes. While this budget resolution doesn’t include the details of the health policies that make the final cut, it could provide the first sign of whether lawmakers are working with enough money to fund a solution to Medicaid shortcomings.

The House is largely leading the efforts to develop the policy, sources said. Options under consideration include:

– Enable low-income adults to obtain free private coverage through Obamacare’s insurance markets. Financial aid for markets was closed to people earning below the poverty line, around $ 13,000 for an individual, as Obamacare editors expected them to be covered by the expansion of Medicaid . However, a 2012 Supreme Court ruling made the extension optional for states, creating a coverage gap that Democrats are trying to close.

– Ask the Department of Health and Human Services to put in place a new Medicaid-type program for people who would otherwise be covered by the expansion of Medicaid in troubled states. Warnock, whose election helped secure democratic control of the Senate and faces voters again next year, plans to introduce legislation as early as next week that would support this approach and significantly increase financial incentives for recalcitrant states to expand Medicaid, according to a bill obtained. by POLITICO.

– A hybrid model that could address concerns about one or the other of the two approaches, according to a senior Democratic official. People could quickly receive free coverage in the markets until federal officials could create a new program that would likely provide better benefits.

A White House spokesman did not indicate whether Biden was pushing lawmakers to address the Medicaid expansion in the human infrastructure package, which is also expected to include investments in child care, education and the fight against climate change. The spokesperson referred POLITICO to a recent tweet Home Affairs Chief Susan Rice, who said Biden “is ready to work with Congress this year to close the coverage gap.”

Biden’s budget called for the creation of a federally administered health insurance option to cover people within the Medicaid expansion gap, but the White House has not publicly weighed in on the approaches being considered by the government. Congress. Decision makers see complications with every idea.

For example, leveraging Obamacare markets could give new registrants more limited benefits than they would receive through Medicaid. It could also force the government to provide expensive subsidies to private insurers to cover out-of-pocket health costs that Medicaid would typically cover. But the creation of a new federal program would take time to put in place.

Those who draft the legislation try to ensure that they don’t inadvertently reward states that have refused expansion or cause expanding states to drop coverage so that the federal government foots the bill.

“To the extent that you give more incentives and benefits to irresponsible states, some of the responsible states will say, ‘I want that too,’ which increases the cost,” Doggett said. “How do you justify excluding states from a federal Medicaid program?” “

Matthew Fiedler, a member of the USC-Brookings Schaeffer Initiative for Health Policy whose research focuses on the Medicaid coverage gap, and other experts said they were not worried about states dropping Medicaid expansion , since the federal government recovers 90 percent of the cost. Yet Medicaid experts believe policymakers need to provide the right balance of “carrots and sticks” to discourage states from dropping out.

Whatever approach lawmakers choose, it will have to be approved by the Senate parliamentarian, who interprets whether policies meet strict reconciliation rules. However, lawmakers and outside experts are optimistic that any policy would survive as changes in Obamacare markets and Medicaid expansion have already been driven by the fast-track budget process.

The effort recently received major impetus from the powerful Congressional Black Caucus, the Congressional Hispanic Caucus, and the Congressional Asian Pacific American Caucus – as well as the House Majority Whip Jim Clyburn. The groups argue that closing the coverage gap would be “one of the most important steps” towards reducing glaring racial inequalities in the US health care system.

It would also give the Democrats of the Red State a concrete victory to bring to their constituents.

“At that time next year, by the time you run for re-election next year, you can run for the Medicaid expansion,” Clyburn recently told state house lawmakers. Alabama. “I think that we [can] do it – i know i’m going to do hell to do it.

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