Current Health Policy Issues Covid 19 Stimulus Bill

Week 6 Assignment

Write an essay about a current event elated to health policy. It could be local, state, national, or international

On 11th March 2021, a $1.9 trillion Covid-19 Stimulus Bill was signed into law by President Joe Biden. In essence, the said bill seeks to deliver direct and immediate relief to workers and families impacted by the Covid19 pandemic. Among the core provisions of the Bill, which was passed by Democrats in Congress without a Republican vote, is an incentive to encourage the various states that have not undertaken to expand Medicaid coverage under the Affordable Care Act of 2010 to consider making such a move. The provision is based on the Federal Medial Assistance Percentage (FMAP), which as Rudowitz, Corallo & Garfield (2021) observe happens to be the total amount advanced to states by the federal government to ensure their Medicaid programs are funded. The FMAP is 90 percent for beneficiaries eligible through Medicaid expansion, which implies that almost the entire expansion cost is covered by the federal government (Rudowitz et al., 2021). The Bill, however, incentivizes Medicaid expansion by the 12 states that are yet to do so by ensuring that in the traditional Medicaid program, there is an additional five percent paid by the federal government in terms of Medicaid costs for a 2-year period (Rudowitz et al., 2021). In essence, the 5% increase happens to be a significant injection of federal funds into states – with sources projecting that traditional Medicaid program spending is responsible for close to 80% of total program spending even in those jurisdictions having in place expanded coverage (Gee & Waldrop, 2021).

Another provision in the Bill seeks to ensure that persons who no longer have access to private or employer-sponsored coverage as a consequence of the prevailing COVID19 pandemic have their health insurance costs picked up by the federal government. As Ollove (2021) points out, there is likely to be a significant increase in the number of persons who enroll for health insurance as a result of generous subsidies to non-expanding states as well as tweaks to certain insurance standards. The targeted states also stand to reap huge benefits from the incentive – for instance, Florida and Georgia, the two largest holdout states, could net $3.5 billion and $5.9 billion respectively if they took the deal (Rudowitz et al., 2021). This begs the question - to expand or not to expand Medicaid coverage?

As per the initial design of the ACA, individuals whose households raked in less than 138% of the federal poverty level were eligible for Medicaid (Sohn & Timmemans, 2017). It should be noted that in National Federation of Independent Business vs. Sebelius (2012), the Supreme Court made a ruling that essentially curtailed the federal government’s ability to ensure compliance in states (Sohn & Timmemans, 2017). This opened up avenues for states to expand Medicaid eligibility within their jurisdictions in line with economic conditions, political factors, and the number of uninsured citizens (Sohn & Timmemans, 2017). Twenty-four states, as well as the District of Columbia had embraced an expansion in coverage by January 2014, and only 12 states are yet to expand coverage thus far (Sohn & Timmemans, 2017).

However, the decision on whether or not to expand coverage ought to be based on the long-term benefits and costs of such expansion, and not the two-year subsidies proposed in the Covid19 Stimulus Bill. Medicaid expansion has been shown to reduce the number of uninsured persons in a state (Sohn & Timmemans, 2017). For instance, as Sohn & Timmemans (2017) point out, close to 60% of coverage gains (health insurance) were traced back to Medicaid expansions in 2014. Improved coverage comes with better access to care and self-reported health, thus reduced mortality (Sohn & Timmemans, 2017). Beyond the health benefits, Medicaid expansion has been associated with improved financial stability for those gaining health insurance (Sohn & Timmemans, 2017). Findings from the Oregon Medicaid Experiment showed that coverage reduced financial strain for low-income families as measured by the incidence of catastrophic expenditures, skipping meals or borrowing money to cover medical bills, and out-of-pocket medical payments (Sohn & Timmemans, 2017). As the authors further point out, a Medicare eligibility decrease of 10% was essentially linked to a household bankruptcy decrease of 8%.

Those opposed to Medicaid expansion argue that it would cause a ballooning of budgetary deficits and affect the quality of care in hospitals (Sohn & Timmemans, 2017). However, as Mazurencko et al. (2018) point out, no study has reported a decrease in quality of care or health following expansion. As such, the benefits of Medicaid expansion outweigh the costs and it may be beneficial for the 12 states targeted by the Covid19 Stimulus Bill to consider expansion for the benefit of their low-income citizens.