April 30, 2017; New York Times
As the president and the Republican-led Congress struggle to “repeal and replace” the Affordable Care Act, most of our attention has been drawn to the debate over coverage for preexisting conditions and to how many people will lose their health insurance. While legislative action has stalled, the Trump administration has shown how it intends to replace medical coverage for the millions of Americans who benefitted from expanded Medicaid eligibility—a benefit he wishes to end—in a recent agreement with the state of Florida.
Under the ACA, Medicaid coverage was expanded, states were required to participate, and the federal government took responsibility for most of the costs. By doing this, millions of previously uninsured people who would not be able to afford the subsidized health policies made available in the ACA marketplaces would be covered. In 2012, the Supreme Court ruled that while the ACA itself was constitutional, the federal government could not force states to expand their Medicaid programs, leaving millions again without access to covered medical care.
Without Medicaid to pay their bills, hospitals and their emergency rooms were forced to provide services with little hope of payment. For many hospitals, this presented a real threat to their survival. As a stopgap measure, the Obama administration allowed states to apply for special funding under a Medicaid provision called a Section 1115 waiver, designed to support experimental innovations that might improve the quality of care and the cost-effectiveness of Medicaid services.
As NPQ reported at the time, these waivers were significant. In just two states, “the health of more than 1.5 million Texans and over 800,000 Floridians [hung] in the balance, along with the fiscal health of hundreds of hospitals.” As was reported in the Texas Tribune, “In fiscal year 2013, the most recent year for which data is available, more than 300 Texas healthcare providers received a combined $3.9 billion for uncompensated care by way of the 1115 waiver.”
Sign up for our free newsletter
Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.
In 2015, the Obama administration informed those states that had received waivers and special funding that they would not be renewed permanently and that, over a number of years, the amount of funding would be decreased. States were again urged to expand their Medicaid programs. While these funds had protected hospitals in the short term, they were not intended to be an ongoing alternative healthcare system. In their notice to Florida, Obama administration officials said Medicaid coverage was “the best way to secure affordable access to health care for low-income individuals. Uncompensated care pool funding should not pay for costs that would be paid for in a Medicaid expansion.”
The Trump administration feels otherwise and, in an agreement reached with the state of Florida, has gone back to using Section 1115 waivers to reinvigorate that state’s uncompensated care fund with $1.5 billion. For Florida Governor Rick Scott, this is a states’ rights issue more than it is about health. He told the New York Times, “Florida was on the front line of fighting against federal overreach under President Obama and it is refreshing to now have a federal government that treats us fairly and does not attempt to coerce us into expanding Medicaid.”
Andrew Slavitt, who had been acting administrator for Medicare and Medicaid Services through January 2017, told the Times, “Florida is just being paid by taxpayers not to expand Medicaid. The low-income pool is essentially a slush fund and it’s a really inefficient way to pay for medical care.”
The Trump administration’s approach to healthcare calls for totally eliminating expanded Medicaid nationwide because it is too expensive.
The Congressional Budget Office estimates that the House repeal bill would reduce Medicaid spending by $839 billion in the coming decade, compared with the amount that would be spent under current law. Fourteen million fewer people would be covered by Medicaid, the office says.
How much of these funds will have to be spent anyway to save hospitals from the serious harm they will face? Emergency departments will once again be the place for care for millions with no other option. Preventable illnesses will become serious and their treatment expensive because preventative care will be less available. The higher-than-expected costs seen as formerly uninsured people took advantage of their new Medicaid benefits tell us much more about how necessary this program is than it does about any flaws in the program. But for the president, Governor Scott, and their supporters, cost savings are worth more than human health.—Martin Levine