Congressional Democrats will go around conservative state government leaders who have rejected the prospect for a decade and instead work with local leaders.
Representatives from 12 states announced outside the U.S. Capitol that the Cover Outstanding Vulnerable Expansion-eligible Residents (COVER) Now Act would give dollars directly to local governments and hospitals that want to help expand Medicaid.
Medicaid expansion was rolled out with the Affordable Care Act in 2010 and offers the government health plan to people making up to 138% of the national poverty line. Until 2017, 100% of the expansion was paid for by the federal government. Since then, states that expanded are responsible for 10% of the cost.
Texas rejected expanding Medicaid to the working poor again this legislative session. The COVER Now Act will go around those conservative leaders in the state and elsewhere.
“I think you can’t give the state ideological Republican leaders enough money to do this,” said Lloyd Doggett, (D-TX) who authored the bill. “That’s why we just have to go around them and rely on effective local and willing leaders to do the job that we need in Texas.”
Texas leads the country in uninsured people, with an estimated 5.2 million lacking basic health coverage, a number likely increased by pandemic job losses. At 18.4%, it is double the national average. According to the Kaiser Family Foundation, expanding Medicaid in Texas could reach more than one-third of those uninsured, more than 1.4 million people.
The bill allows the federal government to directly fund these local hospitals and governments in a “demonstration” program that lasts five years and can be reapplied for. Governments that elect to take the money would qualify for 100% of Medicaid funding for three years, and then it would fall to 95%.
COVER Now would only be covering people in areas where local leaders agreed to contract with the Centers for Medicare and Medicaid Services. This would probably only apply to large urban centers.
“There would be individuals who would be left out. And I do think it raises a number of complexities in terms of CMS working directly with entities that are not the state,” said Robin Rudowitz, vice president of the Henry J. Kaiser Family Foundation and co-director for the program on Medicaid and the uninsured.
More than just growing pains, she said the program is a novel approach in the Medicaid space to address the uninsured. There are many demonstration projects and waivers that fund them, but none go directly to counties or local entities. They all go through the state.
“The physical, mental and fiscal wellbeing of our community is inextricably linked to everyone’s ability to get covered,” said Ron Nirenberg, mayor of San Antonio. “Medicaid expansion is an issue that’s supported across the political spectrum, and I’m eager to see the results of the congressman’s bill.”
Texas receives around $3.87 billion a year from the federal government to offset uncompensated care hospitals provide to the uninsured. An extension of the program that provides that money, known as the 1115 waiver, was rescinded, and the state may lose it after 2022.
The move from the Biden administration was intended to pressure state lawmakers like those in Texas to finally expand Medicaid to make up for those costs. That didn’t happen though, and Texas hospitals may be hit with the bill.
The stick of rescinding the 1115 waiver followed the carrot of incentives from the American Rescue Plan. ARP gives a 5% boost to the much larger traditional Medicaid funding of states that expand now.
Holdout states haven’t taken advantage, proving again this is not about money.
The move comes as state legislators are preparing for multiple special sessions to address congressional redistricting and a controversial voter law. This could add agenda items to the sessions but it isn’t clear what the state can do if COVER Now passed.
Texas Gov. Greg Abbott has defended several times the state’s decision to not expand the health program. The governor’s office had not responded to TPR’s request for comment, and it wasn’t clear how the news would be received.
The bill includes language to penalize states that “withhold or reduce” funding or increase taxes on local governments that participate in the program. It also seeks to prohibit states from barring local governments or health providers from participating.