I. Expanding Access to Health Insurance & Health Care
To gain access to quality health care, a person must have many things (such as local providers who will accept a new patient, transportation, time off work, etc.), but nothing is more important than having an entity to pay for that care. (This is not to dismiss the quality of care at free clinics and other charitable organizations, but for far too many the lack of insurance = the lack of care.)
The extension of health insurance to millions of Americans is the heart of the Affordable Care Act [“ACA” or “Obamacare”]. As a candidate, Joe Biden promised to “double-down” and continue to grow the law he helped create during the Obama Administration.
In the first 100 days of his Presidency, Biden has followed through with that pledge in several ways:
- He increased access to the ACA Exchanges and helped make health insurance policies on the Exchanges more affordable.
- He expanded maternity benefits available through Medicaid & CHIP (for those states that take the option) and is unwinding previously approved work requirements to receive Medicaid.
- He offers both sweeteners to “encourage” the 12 states that have not expanded Medicaid to reconsider and threats to those states that are most recalcitrant.
Let me briefly explain each:
A. Increasing Access/Decreasing Cost on the Exchanges
President Biden left the Inaugural stage to sign multiple Executive Orders before attending celebrations in the White House on his first night, including an EO to open a “special enrollment period” through August 15th on HealthCare.gov to allow Americans- many recently unemployed through Covid- extended access to plans on the Exchanges [AKA “Marketplaces”]. As of March 25th, more than 200,000 people had newly signed up for coverage.
Seven weeks later, insurance through the Exchanges became more affordable for millions with the signing of the $1.9 Trillion American Rescue Plan [ARP], “the most noteworthy expansion of health insurance benefits since the passage of [the ACA].” [quote]
Approximately 85% of people who purchase insurance on the Exchanges receive a subsidy to help pay for that coverage; the average federal assistance is 85% of the cost of the premium. (citation) Even so, since 2014 the price of Exchange policies became prohibitive for low-income people in non-Medicaid expansion states and higher earners (such as independent contractors, business owners, and early retirees) who were eligible to purchase Exchange policies, but not for a subsidy.
The American Rescue Plan “broadens subsidies for every income group [and] almost everyone is now eligible for credits that limit their health insurance premiums to no more than 8.5% of their household income.” [quote] (Up until the ARP, purchasers of insurance on the exchanges could spend close to 10% of their income on premiums.)
B. Expanding Maternal Care Benefits & Ceasing Medicaid Work Requirements
The American Rescue plan can potentially increase maternal health coverage for new mothers through the first year after delivery under a combination of Medicaid and the Children’s Health Insurance Program [“CHIP”]. The increased coverage is available for five years; it could be instrumental in addressing the maternal mortality crisis that haunts large sectors of our country and has lacked the focused national attention it has deserved for years.
However, this expansion of maternal coverage is optional to the states; some (many?) may refuse. [Medicaid falls under CMS and federal law but is administered by each state.]
Simultaneously, the Biden Administration is “unwinding” the Trump Administration’s permission to many states to add a work requirement to their Medicaid program. New Hampshire and Arkansas were notified by letters on March 17th that their work programs approved by the previous Administration were revoked in 30 days.
The impact of the Biden decision is less dramatic given a federal judge prevented the start of New Hampshire’s work requirement in July 2019, after another federal judge stopped work requirements in Arkansas and Kentucky in March. (More than 18,000 residents lost Medicaid coverage before the suspension of Arkansas’s work program.) The Supreme Court canceled its plans to review the constitutionality of Medicaid Work Requirements in March. Still, the idea is undoubtedly headed for a final determination by the nation’s highest court.
C. Incentives to Expand Medicaid in the Remaining 12 Non-Expansion States- and Threats
As initially designed, the Affordable Care Act expanded Medicaid to nearly all adults with incomes up to 138% of the Federal Poverty Level ($17,609 for an individual in 2020). [citation]
In 2012 the United States Supreme Court made Medicaid expansion optional; 24 states immediately said “No.” By January 2016, three of those “No” states were changing their minds, a trend that continued up to the most recent changes in Oklahoma and Missouri (in both states voters added Expansion to their State Constitutions in 2020). The economic outcomes in states that adopted the ACA plan are one of the reasons the trend continues.
Today only 12 states continue to reject Medicaid expansion (go here for an interactive map on the status of all 50 states). Joe Biden wants to bring that number to zero.
The American Rescue Plan adds a sweetener to the dozen non-expansion states: a 5% increase to their federal match for their current (i.e., traditional) Medicaid population for two years. It is possible this increase could cover the cost of the expansion, and there is some hope from the White House that these incentives could be effective with the remaining 12 non-expansion states. Some states may be listening (is that you, North Carolina?) (Every state expanding Medicaid would insure approximately 4 million more Americans. For more, go here.)
But there are plenty of detractors and arguments against taking the ARP “sweetener.” For states not responsive to the carrot, the opposite of the treat buried in the ARP is- of course- the stick. For an example of how far the Biden administration may go to bring every state within the ACA Medicaid expansion model, look no farther than Texas, home to the largest uninsured population in America.
Texas has operated since 2011 on a work-around to Medicaid expansion on what is called the 1115 waiver, which was set to expire in September 2022. However, in the last week of the Trump Presidency, then-Administrator of CMS Seema Verma granted Texas an extra ten years of the 1115 waiver without passing the decision through the required rule-making notice process, citing Covid as the reason. [source]
On April 16th, the Biden Administration rescinded the extension of the 10-year federal funding agreement (and the $11 billion federal dollars per year at stake), stating that CMS “erred in exempting the state from the normal public notice process before granting an extension to the waiver in the waning days of the Trump administration.” [quote] Noting that the 1115 waiver remains in effect until next Fall, the Biden-led CMS notified Texas it is “ready to work with the state” if it wishes to extend it beyond next year. [source]
It appears that President Biden is quite serious about the “double-down” on protecting and growing the Affordable Care Act he promised as a candidate.
II. Other Health Care Promises Met in President Biden’s First Budget
Three important health priorities were included in the April 9th budget and deserve mentioning in this list of accomplishments in the first 100 days:
- The opioid epidemic: $10.7 billion was requested for fighting the opioid epidemic, $3.9 billion over the 2021 enacted level. The money will help support research, prevention, and recovery services.
- Public health infrastructure: $8.7 billion was requested for the Centers for Disease Control and Prevention to boost public health capacity in states and territories. OMB calls the budget increase the largest in nearly two decades for the agency at the frontlines of combating COVID-19. after adjusting for inflation.
- Research funding boosts: $6.5 billion to launch a new agency called the Advanced Research Projects Agency for Health. The new agency would provide major increases in federal research and development spending on cancer and other diseases such as diabetes and Alzheimer’s.
[This section is quoted from 3 major health items included in Biden’s budget request, FierceHealthcare [4/9/21] available here.]
III. What will be in Infrastructure?
President Biden’s speech introducing the final proposal for the American Families Plan is tomorrow night (Wednesday the 28th) which means I don’t have the details writing this Fontenotes, but you do as you read it.
All I know right now is that hopes the second part of Biden’s “Build Back Better” agenda would offer major health care reforms (including addressing drug costs and increasing funding for paid family and medical leave) are currently being tempered if not dashed.
However, getting back to the theme of the Fontenotes, I am not sure if we can give President Biden credit for any proposal he reveals on day 98– so I will leave that to another Fontenotes.
I also have not done justice to the Biden’s attention to elder care in these first days, but that, too, will have to wait for another edition. Right now, I have to bring this Fontenotes home.
The White House has been very active since January 20th, and the Biden health care team isn’t even in place yet.
Today there are 1,360 days until our next Inauguration Day. There will be many markers along this way and many more topics for Fontenotes. But we aren’t done with Biden’s 100-day anniversary yet, because there are broken promises that need attention.
I hope you will come back for Part III!
Want to Know More?
1. I quoted extensively from an excellent resource on the history, policy, and impact of the Federal subsidies for most people purchasing insurance on the ACA Exchanges, as well as the significance of the new rules under the American Rescue Plan. If you would like to know more, I highly recommend What the American Rescue Plan says about President Biden’s health care priorities – and what they mean for you, available here.
If you want to get into the details on the different impacts the ARP will have on Cobra plans, unemployment benefits, and much, much more- Health Affairs has a math-lovers summary here. To access information from CMS about how the federal subsidies work (and who is eligible), go here.
2. Are you yearning to know more about the 219 page, $1.9 Trillion American Rescue Plan?