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Partial Medicaid expansions under ACA pose ‘big consequences’

Just shy of 7 months into President Donald J. Trump’s presidency, there have been repeated failures to fulfill his major campaign promise to repeal and replace the Affordable Care Act. The most recent debate ended in the rejection of the “skinny bill” and Republicans in the House and Senate seem prepared to move on to other issues.

“By comparison with the GOP’s dystopian health care vision, Obamacare has never looked better,” Jonathan Oberlander, PhD, from the University of North Carolina, Chapel Hill, wrote in a perspective published in The New England Journal of Medicine. “Republicans could not mobilize public support for their plan, which was the least popular major legislation in the past 3 decades. Instead, the Republican threats to Obamacare inspired widespread protests and a movement to protect the law. Ironically, the GOP managed to increase support for the ACA, whose favorability improved markedly during the repeal-and-replace debate.”

Nonetheless, the future of the ACA remains uncertain, he wrote.

Meanwhile, “the Trump administration retains broad executive authority to reshape the health care landscape,” Adrianna McIntyre, MPP, MPH, from Harvard University, and colleagues wrote in a separate perspective also published in NEJM. “Perhaps the most consequential choices that the administration will make pertain to Medicaid, which today covers more than one in five Americans.”

The decision to allow “partial expansions” pursuant to a state Medicaid waiver has been overlooked amidst proposals to introduce work requirements or cost sharing to the program, according to McIntyre and colleagues. Partial expansions are appealing to states because they allow them to save money for every Medicaid beneficiary that they move into their exchanges, they wrote.

A waiver request for a partial expansion has been submitted by Arkansas, which may influence other states to follow its lead, according to the authors. Granting Arkansas’s waiver request “would set a precedent with extraordinary practical, budgetary and political consequences,” McIntyre and colleagues wrote.

The financial burden would not just be shifted to the federal government under partial expansion; the size of that burden may also increase, they wrote. Enrolling beneficiaries in private plans increased Arkansas’s expansion costs by 24% and these costs may be much higher in other states, according to the authors.

“Partial expansion could also degrade the quality of states’ individual insurance markets,” McIntyre and colleagues wrote. They noted that a previous adjusted analysis showed 7% higher exchange premiums in nonexpansion states compared with expansion states. Furthermore, populations with incomes between 100% and 138% of the poverty level may not want to be moved out of Medicaid, the authors wrote.

McIntyre and colleagues noted some advantages private coverage could have over Medicaid, including that it is more likely to be accepted by providers than Medicaid, and it could promote expansion of Medicaid programs to all individuals with incomes up to 100% of the poverty level.

“Whether moving more states into the ‘yes’ column justifies the costs of partial expansion, however is an open question,” they wrote.

“The stakes are high in the coming debate over partial Medicaid expansions, with far-reaching consequences for patients, state governments and the federal budget,” they concluded. “It’s not yet clear what position the Trump administration will take, but it should be cautious. If CMS grants a waiver to one state, it will have little choice but to grant waivers to any other states that request them. The damage to Medicaid beneficiaries, the exchange population, and the federal budget could be serious.” – by Alaina Tedesco

Disclosure: Oberlander reports receiving personal fees from American Association of Diabetes Educators, Ohio State Comprehensive Cancer Center, St. Louis Area Business Health Coalition, Mid-sized Plan Retirement and Health Care Conference, Hospital Association of New York State and Cedars Sinai Medical Center. McIntyre reports receiving grants from the Agency for Healthcare Research and Quality.