If Congress could focus its efforts on one important goal on the domestic policy front for the rest of the year, it should focus on maintaining health care coverage for tens of millions of Americans.
Medicaid eligibility rules have been effectively suspended for existing enrollees since the passage of a 2020 COVID-19 relief bill that provided for a 6.2 percentage points the Federal Matching Grant (FMAP) increases if states allow Americans to remain on Medicaid rolls once qualified. The bump is effective until the end of the public health emergency (PHE) COVID-19, now until October 13, 2022.
With PHE potentially ending in the US later this year or early next year, Medicaid eligibility rules will start to kick in again and studies suggest that between 5.3 and 14.2 million current enrollees could lose coverage. While many may be eligible for alternative options – such as employer coverage, children’s health insurance coverage or health exchange coverage – millions of people are likely to face barriers to accessing new coverage if they opt out of Medicaid. These barriers can include lack of knowledge about alternative options, affordability issues, and bureaucratic pitfalls that could lead to lengthy delays.
Additionally, the improved market exchange premium subsidies enacted as part of the U.S. Bailout Plan (ARP) expires at the end of 2022. Listing on the exchange has reached new highs in part due to enhancements to ARP bonus subsidies. Temporary ARP improvements significantly reduced the amounts families had to pay. About 3 million people could lose coverage if the upgrades were to end at the end of this year.
We’ve made great strides on the coverage front since the Affordable Care Act (ACA) was passed, which led to the expansion of Medicaid in most states and the creation of health care coverage. market exchange. Our uninsured rate reached a record 8% this year – well above 1% in some other developed countries, but are still progressing.
The COVID-19 pandemic has had a huge emotional and economic impact on the nation. One bright spot, however, has been the expansion and consistency of health care coverage. This has saved many lives and mitigated the economic impact.
There are strong economic and moral reasons for providing affordable universal access. Over time, consistent coverage will bend the cost curve and improve the quality of care by allowing Americans to work with their providers and take stock of their health. Business health care costs could level off and decline over time, freeing up dollars to expand and make U.S. businesses more internationally competitive.
Consistent and affordable coverage also protects our most vulnerable from the scourge of pandemics and other emergencies. If the ongoing COVID-19 outbreaks are any indication, we’re not off the hook just yet.
So what should Congress do about these two soon-to-expire policies to ensure broad coverage is maintained and expanded?
- Congress is expected to extend FMAP’s 6.2 percentage point hike in Medicaid matching funding to each state for an additional 24 months after the public health emergency ends, as long as states agree to continue coverage for that states review whether enrollees still meet the qualifications and inquire about coverage alternatives. This would provide a reasonable pathway to transition Americans to hedging alternatives.
- Anyone who loses their Medicaid eligibility during this time should be allowed to enter the market with the most generous premium subsidies allowed by law for the 24-month period. This is similar to a provision adopted for those displaced from employment during the COVID-19 pandemic.
- The ARP bonus improvements should be extended for at least 2 more years, giving Congress and other policymakers time to assess how best to permanently revamp the bonus subsidies. Congress is considering a reconciliation invoice which would extend these grants for up to 3 years.
- The so-called “family problem” should be solved as President Biden has proposed in a draft rule. The current interpretation of the ACA law only considers the affordability of an employee’s individual insurance, but not the cost to the entire family. Thus, many dependents are not eligible for exchange bonuses. The proposed rule fixes that problem and would help around 5 million people get coverage.
The above proposals will surely cost money in the short term. For example, based on my analysis of federal Medicaid spending data prior to the corresponding COVID-19 FMAP surge and inflating enrollment growth since the start of the pandemic, I believe that continued increasing the FMAP can cost between $45 billion and $50 billion a year. Other analyzes of the COVID-19 matching bump costs in 2020 and 2021 Support this estimate. Extending premium subsidies would cost a little less $22 billion per year.
However, it is important to put these two temporary policies in context: together they only represent about 1.5% projected national health care spending in 2022. This is just $4,200 per year in upfront insurance costs to cover those who may be displaced from health care coverage with the end of the health emergency public and ARP bonus improvements.
The cost would surely be higher if these people flooded emergency rooms and hospitals as they joined the ranks of the uninsured. Ensuring a reasonable transition of health care coverage is essential in these still very precarious times. This would preserve progress and help us move forward on the path to affordable universal access.
Marc S. Ryan, MPA, is a veteran of health care and health care technology. He is the author of the new book, The maze of health.