Is the Biden Administration Creating aMedicaid Fiscal Cliff?
pa href=https://www.cato.org/people/doug-bandow hreflang=undDoug Bandow/a
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pAlthough President Biden a href=https://www.nationalreview.com/corner/biden-the-pandemic-is-over/ rel=noopener target=_blanktold em60 Minutes/em/a the pandemic is over, his administration has once again extended the Covid‐19 state of emergency. These repeated extensions are inflating the nation’s Medicaid rolls and steepening anbsp;potential fiscal cliff for states./p
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pA largely forgotten piece of Covid‐19 legislation, the a href=https://url.avanan.click/v2/___https:/www.congress.gov/bill/116th-congress/house-bill/6201/text___.YXAzOmNhdG9pbnN0aXR1dGU6YTpvOjExM2QxMDdmYTFmNzNkNDA1NDAyODRkMzExMmVlNTM2OjY6Zjk1MjowYjU1NGIwNzdhY2Q2NDczNzg2NTYzYTNlYzQxZjFhNzMzNmMxMDdkZmZkNjdiNDdhMTFhMjNiOGE0NTYxMDU1Omg6VA rel=noopener target=_blankFamilies First Coronavirus Response Act/a, made major changes to the Medicaid program. First, it increased the federal share of Medicaid costs by 6.2 percentage points while the pandemic state of emergency remained in force. To receive the additional federal support, states had to keep beneficiaries on the Medicaid rolls unless they either moved out of state or asked to be dropped from the program./p
pThese changes were expected to be temporary but will now remain in place through 2022 and beyond. On October 13, health and human services secretary Xavier Becerra a href=https://url.avanan.click/v2/___https:/aspr.hhs.gov/legal/PHE/Pages/covid19-13Oct2022.aspx___.YXAzOmNhdG9pbnN0aXR1dGU6YTpvOjExM2QxMDdmYTFmNzNkNDA1NDAyODRkMzExMmVlNTM2OjY6NTQ3YzpiYmUxNzM1MmUzY2FkYzZmOTZkYTM0MWZmMGRiOGM3MzRhYWEyOGVmMjAyNWQ3NDYyMTNhYjU3MTZkMDM1ZDljOmg6VA rel=noopener target=_blankissued/a the eleventh renewal of the nation’s Coronavirus Public Health Emergency. The emergency, which began on January 27, 2020, will now a href=https://url.avanan.click/v2/___https:/www.healthcarefinancenews.com/news/hhs-extends-public-health-emergency-11th-time___.YXAzOmNhdG9pbnN0aXR1dGU6YTpvOjExM2QxMDdmYTFmNzNkNDA1NDAyODRkMzExMmVlNTM2OjY6ZGM2MjpkM2U5YzI3YTdmZmQxODljMThjMDdmZjYzMGJlNTcyZTczNTI4OWFiMzJlNGE5OTI0ODk5ZTc3YjlhMjk1NTc5Omg6VA rel=noopener target=_blankcontinue/a through January 11, 2023 unless Becerra explicitly terminates it. More likely, Becerra will extend the emergency once again in January, since Covid‐19 case rates will likely rise during and after the holiday season. Case rates are already spiking in Europe, anbsp;a href=https://url.avanan.click/v2/___https:/www.npr.org/sections/health-shots/2022/10/07/1127017062/early-signs-a-new-u-s-covid-surge-could-be-on-its-way___.YXAzOmNhdG9pbnN0aXR1dGU6YTpvOjExM2QxMDdmYTFmNzNkNDA1NDAyODRkMzExMmVlNTM2OjY6Y2M0Nzo0YTQ4ZjY0YjA3ZmZhNTkxZDYxYjY5NWFiMWU1OWFiYWRmM2ZkMjdlYmI3NWJhYzE1OTY4MjBhMDM1NzkwMzY4Omg6VA rel=noopener target=_blankharbinger/a of future U.S. trends./p
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pBy continuing to needlessly extend the Covid‐19 state of emergency, the Biden administration is making Medicaid even more financially unsustainable than it already was./p
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pBecause almost no one is being dropped from Medicaid, enrollment continued to swell even after the very brief Covid‐19 recession ended. According to a href=https://url.avanan.click/v2/___https:/www.medicaid.gov/medicaid/national-medicaid-chip-program-information/medicaid-chip-enrollment-data/monthly-medicaid-chip-application-eligibility-determination-and-enrollment-reports-data/index.html___.YXAzOmNhdG9pbnN0aXR1dGU6YTpvOjExM2QxMDdmYTFmNzNkNDA1NDAyODRkMzExMmVlNTM2OjY6NGMwZDpmNTMxZjI1MmM2MjkwYTc2YzM2ZDM5MWUyZGY3ZmQ2ZWFmNzAyZjllZDI0ODQ4OTRlNDhkNjAwMDQ5YjQwYmFhOmg6VA rel=noopener target=_blankdata/a from the Centers for Medicare and Medicaid Services, national enrollment in Medicaid and the closely related Children’s Health Insurance Program grew from 71.3 million at the beginning of 2020 to 90 million in July 2022, the last month for which CMS has published data. Nationwide, more than one‐fourth of Americans are now enrolled in Medicaid or CHIP, but enrollment rates vary widely across states. While Medicaid/CHIP enrollment rates are below 15 percent in the Dakotas, Utah, and Wyoming, over 40 percent of New Mexico and District of Columbia residents are on the programs./p
pIndividuals often enroll in Medicaid after losing anbsp;job. Once they get anbsp;new job, the temporarily unemployed would exceed the income limit and be expected to get employer coverage or purchase coverage on anbsp;state health‐care exchange. While the emergency remains in place, anyone who lost anbsp;job since early 2020 and was subsequently rehired can stay in the program./p
pAnother source of natural attrition from Medicaid is beneficiaries’ ageing out of eligibility. When anbsp;Medicaid beneficiary reaches 65, he or she is normally expected to sign up for Medicare and stop using Medicaid coverage. However, this may not be advantageous to the newly senior citizen./p
pMedicare has premiums, deductibles, and co‐payments, whereas Medicaid typically does not require beneficiaries to make any payments. So, while the emergency continues, some beneficiaries may continue to receive health services through Medicaid even after turning 65./p
pThus far, additional Medicaid expenditures arising from higher enrollment have not been anbsp;fiscal challenge for states because they are offset by the additional 6.2 percentage points of Federal Medical Assistance Percentage available during the emergency. That could change if the administration allows the emergency to expire. New Mexico, for example, would have to spend an additional $300 million of its $8.5 billion general‐fund budget on Medicaid‐provider reimbursements. In California, the general‐fund impact would exceed $4 billion./p
pStates can limit the cost spike by aggressively pruning their Medicaid rolls. But, after years of not checking eligibility, some states may have lost the ability or even the will to ensure that beneficiaries continue to meet qualification criteria./p
pRather than purge their rolls or take anbsp;budgetary hit, officials in some states might lobby for indefinite extensions to the public‐health emergency, or, at least, the policy changes it has driven./p
pAnd they may not be alone since hospitals have also benefited from some of the emergency provisions. During the emergency, CMS has a href=https://url.avanan.click/v2/___https:/www.cms.gov/files/document/covid-19-emergency-declaration-waivers.pdf___.YXAzOmNhdG9pbnN0aXR1dGU6YTpvOjExM2QxMDdmYTFmNzNkNDA1NDAyODRkMzExMmVlNTM2OjY6YzQxYzozZTdjYmQ2ZjM3OWY5MjA3NTM5MDQ4Y2ZiZWNjNzU3OTc1OWViMDczN2U5ZGNlMTcyMzg2ZTI3NTlkOTk1ZTg4Omg6VA rel=noopener target=_blankwaived/a numerous regulations it normally applies to health‐care providers. If the emergency ends, these regulations will snap back into place, reducing provider flexibility and increasing their costs./p
pIndefinite extension of the public‐health emergency and continued growth of Medicaid could even be seen as anbsp;backdoor move toward single‐payer health care. As more Americans temporarily meet the program’s eligibility guidelines and then stay on the program for the long term, fewer will require private health coverage. While some may welcome this stealthy path toward single‐payer, those who desire anbsp;robust private health‐insurance market must be on guard against it./p
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