Reconciliation talks so far quiet on Medicaid expansion
Democrats grapple with competing issues as they plan for scaled-back reconciliation bill
Advocates are pushing to squeeze Medicaid expansion and home health funding into a potential budget reconciliation bill after Majority Leader Charles E. Schumer, D-N.Y., renewed negotiations with moderate West Virginia Democrat Joe Manchin III.
With Democrats poised to lose control of the House in the midterm elections, the bill could be the party’s last chance for a while to reach millions of low-income and disabled Americans. But the two items have slipped on Democrats’ lengthy list of priorities, which currently includes lowering drug prices, addressing climate change and overhauling taxes.
Schumer has already submitted a drug pricing agreement to the Senate parliamentarian, the chamber’s referee who decides whether the legislative text meets the requirements of budget reconciliation — which allows a bill to pass with a simple majority vote. That portion of the bill is expected to reduce deficits by $287.6 billion over 10 years.
Democrats are now scrambling to attach more health care pieces included in the original $2.2 trillion bill that stalled after passing the House in November, including a provision to extend health insurance subsidies.
But party leaders are working with a much lower topline, making it difficult to fit in all of their health care priorities while also including President Biden’s climate initiatives.
And political calculations are uniting behind a smaller number of larger items in order to gin up Democratic turnout while still fighting concerns about inflation, said Robert Blendon, a health policy and political analysis professor at Harvard University.
“I think they're looking for a few things that can be passed that could really get Democrats enthusiastic,” he said.
Blendon’s recent polling shows voters’ priorities have narrowed in recent months. While home health funding was previously one of the most popular provisions in the original bill, it no longer registers with voters in the current environment.
“You just don’t fully recognize what inflation does to people's behavior,” Blendon said.
Fixing the coverage gap for the 2.2 million people in states that have not expanded Medicaid to low-income adults has so far not been a significant part of reconciliation talks, sources say.
Democrats instead have focused their efforts and messaging on extending expiring health insurance provisions that were in the COVID-19 relief law that passed last year, including subsidies for people making more than 400 percent of the federal poverty line, which is about $54,000 per year for one person, and capping premiums at 8.5 percent of household income.
The law also temporarily provided for zero-premium plans for people making between 100 and 150 percent of the federal poverty line, which is between $13,000 and $20,000 for an individual.
Permanently extending those provisions would cost $220 billion over 10 years, according to the Congressional Budget Office.
The possibility that Democrats could leave out a fix to the coverage gap — which disproportionately impacts people of color living in the South — has infuriated advocates.
“Extending the premium tax credits to people who are frankly middle income but failing to close the coverage gap for the poorest people in the United States would be an abject moral failure and frankly a huge policy blunder for the Biden administration and Congress,” said Jane Adams, campaign director for Alabama Arise, a nonprofit that pushes for Medicaid expansion in Alabama.
Notices of premium increases go out shortly before the midterm elections, complicating Democrats’ races in competitive districts.
While Democrats broadly support closing the coverage gap, it is less of an urgent issue for them because most senators representing non-expansion states are Republicans who don’t support Medicaid expansion. Only three Democratic senators are from non-expansion states, including Sen. Raphael Warnock D-Ga., who has been leading the issue and is in a tough reelection race. He said Wednesday he still thinks it is being considered for the reconciliation bill.
“I’d like to see a solution for the 640,000 Georgians in the coverage gap,” he said.
People in the coverage gap typically don’t have any other coverage options because they make too much to qualify for their state’s traditional Medicaid programs but too little to qualify for subsidies.
Leslie Dach, chair of Protect Our Care, an organization that advocates for the 2010 health care law, said he thinks Medicaid expansion is still in play.
“The reality is until the climate and tax parts are done, the other ways to spend money are not being directly addressed by the negotiators,” Dach said.
The original reconciliation bill also included $150 billion to increase access for home- and community-based services, which are largely offered through Medicaid and vary widely from state to state.
In 2020, roughly 820,000 people were on wait lists for home care. The average wait time was more than three years, according to the Kaiser Family Foundation.
Sen. Bob Casey, D-Pa., who has led the effort on home health funding, said he’s waiting to hear back on the status of negotiations this week. The funding will depend on how likely a deal is between Schumer and Manchin, he said, in addition to how much savings are left to offset the spending.
Manchin has been supportive of the idea, Casey said, adding that he spoke to him in recent days.
“The policy is one thing, and so the question is can you support putting it into this?” Casey said.
Manchin’s Communications Director, Sam Runyon, declined to confirm whether Manchin supports the policy, but reiterated Manchin’s concerns about inflation and his commitment to “lower healthcare costs for seniors and working families.”
Advocates were initially hoping for $400 billion, so anything less than $150 billion would be a blow. But anything is better than nothing, said David Grabowski, a health policy professor at Harvard Medical School who specializes in aging research.
The simple fact that more home health funding is still under discussion is encouraging, he said, considering the issue lacks the political punch of, for example, efforts to allow Medicare to negotiate drug prices directly with manufacturers.
Ageism and ableism are partly to blame, he added, but it’s also due to a misunderstanding that home health funding only affects a small number of the old and disabled. That thinking excludes the impact on the “sandwich generation” — who split their time taking care of both their children and their elderly parents — as well as underpaid workers in long-term care.
“What I would argue, however, is eventually all of our families will need it and this is the system you’ll be facing,” Grabowski said. “Without this investment, you’re not going to have this resource in place.”