WASHINGTON — The expansion of Medicaid, a central pillar of the Affordable Care Act, faces immense uncertainty next year, with President-elect Donald Trump and top Republicans in Congress embracing proposals that could leave millions of poorer Americans without health insurance and jeopardize a major element of President Barack Obama’s legacy.
But influential figures in surprising quarters of the new administration might balk at a broad rollback of Medicaid’s reach, favoring new conditions for access to the government insurance program for the poor but not wholesale cutbacks.
Mike Pence, the vice president-elect, is proud of the Medicaid expansion he engineered as governor of Indiana, one of 31 states that expanded eligibility under the Affordable Care Act. The Indiana program has conservative features that emphasize “personal responsibility” and require Medicaid beneficiaries to make monthly contributions to savings accounts earmarked for health care.
Another Trump adviser, Gov. Chris Christie of New Jersey, hails the expansion of Medicaid in his state, saying more than half a million people are receiving “more and better health care.” The federal government pays the full cost for newly eligible beneficiaries from 2014 through 2016 and at least 90 percent of the costs in later years under the health law.
It is hard to overstate the importance of Medicaid, which insures 77 million people, pays for more than half of all births in some states, covers about two-thirds of nursing home residents and provides treatment for many people addicted to opioids. Spending on Medicaid, by the federal government and states combined, exceeds $500 billion a year.
Of the 20 million people who have gained coverage under the Affordable Care Act, officials estimate, 12 million are insured by Medicaid — with few of the problems that have plagued the new insurance exchanges, or marketplaces.
But change is coming. In his campaign manifesto, Trump said Congress must repeal the Affordable Care Act and give each state a lump sum of federal money — a block grant — for Medicaid. Congress passed legislation in January to repeal the health law and roll back its Medicaid expansion. Obama vetoed the measure, but House Speaker Paul D. Ryan of Wisconsin has vowed to put similar legislation on a Republican president’s desk.
Without even waiting for legislation, the Trump administration is almost certain to give states more leeway to run their Medicaid programs as they wish, federal and state officials say.
A number of states have already proposed co-payments and work requirements for people on Medicaid. In an effort to protect beneficiaries, the Obama administration has limited the use of co-payments and has not allowed work requirements. But state officials say that such changes are likely to be allowed in some form in a Trump administration.
Cindy Mann, the top federal Medicaid official from 2009 to January 2015, said it was entirely possible that a Trump administration would “make different judgments” about Medicaid waivers, the vehicle for a wide range of state innovations and experiments. The federal government has broad discretion to approve state demonstration projects if the secretary of health and human services finds they are “likely to assist in promoting the objectives” of the Medicaid program.
On Nov. 1, the Obama administration rejected a waiver request from New Hampshire, which wanted to impose a work requirement and more stringent standards for Medicaid beneficiaries to show they were U.S. citizens and residents of the state. The requirements “could undermine access, efficiency and quality of care,” the administration said.
New Hampshire will have a Republican governor for the first time in 12 years and could submit similar proposals to the Trump administration.
In September, the Obama administration approved a waiver allowing Arizona to charge premiums to people with incomes above the poverty level ($20,160 a year for a family of three). But federal officials refused to allow work requirements or a time limit on coverage, and they said the state could not charge premiums to people below the poverty level.
The Obama administration also rejected Ohio’s request for a waiver to charge premiums and suspend coverage for people who failed to pay them, a policy it said would jeopardize coverage for more than 125,000 people.
In Kentucky, where more than 400,000 people have gained coverage because of the expansion of Medicaid, Gov. Matt Bevin, an outspoken Republican critic of the health law, is seeking federal approval for a waiver allowing work requirements, premiums and co-payments.
Negotiations over a proposed Medicaid block grant would need to answer difficult questions: How is the amount of the initial federal allotment determined? Will this amount be adjusted to reflect population growth, the effect of an economic downturn, or increases in the cost of medical care or in consumer prices generally? Will it be adjusted to reflect the advent of costly but effective drugs like those to treat hepatitis C? Will states have to continue spending their own money on Medicaid? Will Medicaid beneficiaries still have a legally enforceable right — an entitlement — to coverage and care if they meet eligibility criteria set by the federal government and states?
Medicaid block grants have been a favorite of Republicans in Washington, proposed in various forms by President Ronald Reagan in 1981, congressional Republicans in 1995 and President George W. Bush in 2003.
The House Republicans’ “Better Way” agenda, unveiled in June, would give states a choice of a fixed allotment for each Medicaid beneficiary or a block grant for Medicaid. Either way, states would get less money than they expect to receive under current law.
Under the proposal for a per-capita allotment, states that had not expanded eligibility as of January 2016 would not be able to do so. The enhanced federal payments that states now receive for newly eligible Medicaid beneficiaries would be reduced, and many states would have difficulty making up the difference.
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Under the Affordable Care Act, the federal government is scheduled to pay 93 percent of Medicaid costs for newly eligible beneficiaries in 2019. Under the House Republican plan, the federal share would be pared back to its regular levels — now, for example, 70 percent in Arkansas, 62 percent in Ohio and 50 percent in New Jersey.
The budget bill pushed through Congress by Republicans but vetoed by Obama in January would have repealed the expansion of eligibility.
Appearing Sunday on the CNN program “State of the Union,” Ryan said House Republicans wanted to replace the expansion of Medicaid with “refundable tax credits for people to buy affordable health care insurance.”