In an effort to align State leaders on Medicaid expansion, a group of Republican governors have drafted a proposal, available here, to allow States to obtain additional Medicaid expansion funding, even if those States did not expand Medicaid under the current method under the Patient Protection and Affordable Care Act (ACA). The proposal – initiated by Ohio Governor John Kasich, Wisconsin Governor Scott Walker, and others – is aimed at satisfying the Republican goal of repealing the ACA’s Medicaid expansion program while simultaneously preserving Medicaid coverage for childless adults and low-income individuals just above the poverty level. Under the plan, Federal funding would be capped for the first time in Medicaid program history, based on a new baseline of funding that attempts to level the playing field for non-expansion States.
Under the ACA, 31 States elected to expand Medicaid coverage. Expansion States extended Medicaid eligibility to individuals with incomes of 138 percent of the Federal Poverty Level and included coverage for childless adults. State expansion costs were fully funded by the Federal government for the first three years, phasing down to 90 percent by 2020. The governors’ proposal provides non-expansion States the opportunity to receive Federal funding without expanding coverage to 138 percent of the poverty level that the ACA required. Additionally, the 31 States that previously expanded coverage could increase eligibility to any income level while still receiving ACA funding.
The proposal also advances a new funding model for the Medicaid program. Republicans in Congress have recently endorsed “block grants” and per-capita caps as alternative Medicaid funding mechanisms. Under a block grant, the Federal government would set aside a fixed amount of money to each State for operating the Medicaid program. Per-capita caps limit Federal funding per Medicaid enrollee. The governors’ proposal, however, provides for limitations on the funding caps. Specifically, block grants and per-capita caps would be limited to the modified ACA expansion population and not indexed to future enrollees – although States could apply the grants more broadly. However, the proposal exempts certain Medicaid populations – children, the disabled, pregnant women, and the elderly – from the funding cap. If a State does not opt for block grant or per-capita funding, Medicaid expansion with Federal funding would be frozen and the State would receive its regular match rate for new Medicaid enrollees.
In exchange for Federal funding caps, the governors outline certain Medicaid program changes including work requirements, asset tests, and enrollment limits for low-income adults. The proposal also eliminates the requirement that Medicaid cover every FDA-approved drug, and allows States to move all Medicaid populations into managed care.
Please click here for a copy of the proposal.
