Analysis & Insights

Healthcare in a Health Crisis
by
Alexander Ignatov
10-Jul-2020
  • The economic downturn brought by the COVID-19 pandemic has resulted in record levels of unemployment and with it a loss of employer-provided health insurance, leading to a surge in new Medicaid enrollees.
  • In the 37 states that voluntarily expanded Medicaid as part of the Affordable Care Act, residents can qualify for coverage, however in non expansion states millions of residents will remain ineligible for coverage.
  • The current public health crisis and mass unemployment should give non expansion states some reasons to reconsider the ACA’s voluntary Medicaid expansion.

In 2012, The Supreme Court ruled that the Medicaid expansion under the Affordable Care Act was voluntary for states. After the ACA’s coverage became effective in January 2014, 23 states immediately expanded Medicaid coverage, with a total of 36 states offering expanded coverage today. Many of the holdout states tended to be in the South, with Republican-controlled states refusing to expand Medicaid coverage over various economic and political reasons.

In the face of the COVID-19 public health crisis and its concomitant economic damage, leaving record millions of Americans out of work and therefore without health coverage, the role of Medicaid becomes ever more critical. For states that have refused to enact the ACA’s Medicare expansion, the COVID-19 pandemic may give them reasons to reconsider expansion. According to a recent study by the Urban Institute, a Washington D.C.-based think tank, states that expanded Medicaid coverage found the program covered 35.8% of unemployed adults ages 19 to 64 whereas in non expansion states Medicaid only reached 16.4% of unemployed adults. The federal government currently matches 90% of the state Medicare expansion, giving expansion states the resources to offer health coverage for tens of thousands of its residents when they need it most. While the states themselves must still cover 10%, having federal support for the Medicaid expansion during a public health crisis and mass unemployment puts some ease on state budgets. States that have yet to enact the Medicaid expansion are foregoing billions of dollars in federal funding critical to providing benefits for millions of unemployed and uninsured Americans, and to curb losses in revenue suffered by hospitals and care providers. Moreover, a key driver of spending in Medicaid is to cover long-term care and nursing homes, areas that have been hit the hardest by the COVID-19 pandemic.

Current scientific evidence concludes that older adults and those with underlying health complications are at a higher risk for severe illness from COVID-19. Non expansion states with traditional Medicaid will see heavy expenditures providing intensive care and rehabilitation for individuals in long-term care facilities and nursing homes, as this group is not as heavily funded by the federal government as the expansion group. As cases in the United States rise dramatically following phased reopening, Medicaid will continue to be a crucial tool in states’ public health response, providing benefits to low-income and unemployed Americans during the crisis. The unprecedented public health crisis and near record levels of unemployment should give non expansion states an opportunity to reconsider the ACA’s Medicaid expansion.

Alexander Ignatov

Alexander Ignatov

Policy Intern
Berkeley, CA

Alexander is a recent graduate of Bates College with a major in political economy and minors in history and Russian. At Bates, Alexander was an Academic All-American swimmer and varsity record holder, a member of the Bates Democrats, and a representative for the Fat Cats, a collegiate competitive eating club. His interests include the political economy of financial crises, financial regulation policy, and international trade. Alexander currently resides in Trumbull, Connecticut, where he enjoys open-water swimming, running, and is an avid blues guitarist.

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