No Divorce Just Yet, But Clearly This Couple Has Issues: Medicaid and the Future of Federal-State Health Policy

Jordan Rude, MJLST Staffer

With the recent demise of the American Health Care Act (AHCA), the Affordable Care Act (ACA) will remain in effect, at least for now. One of the crucial issues that divided the Republican caucus was Medicaid—specifically, whether the ACA’s expansion of Medicaid should remain in place or be rolled back (or eliminated entirely). Moderate or centrist Republicans, and particularly some Republican governors, wanted to retain the expansion, while the House Freedom Caucus and other conservatives wanted to eliminate it, either immediately or in the near future.

Sara Rosenbaum, in her article Can This Marriage Be Saved? Federalism and the Future of U.S. Health Policy Under the Affordable Care Act examined the changing relationship between federal and state health policy under the ACA. Two areas in which this relationship was most affected were the ACA’s health insurance marketplaces and expansion of Medicaid: In both, the ACA significantly increased the federal government’s role at the expense of state control. The Supreme Court’s ruling in National Federation of Independent Business v. Sebelius held that the federal government could not require states to expand their Medicaid coverage, pushing back against increased federal power in this area. As of today, approximately 20 states have taken advantage of this ruling and chosen not to expand their programs. Rosenbaum argued that the tension between the ACA’s promise of universal coverage and some states’ refusal to expand Medicaid would defeat the purpose of the ACA, and she proposed a federal “Medicaid fallback” to replace lost coverage in those states.

The AHCA proposed a different, and simpler, solution to this problem—phase out the Medicaid expansion over time until it is completely gone. As noted above, this did not have much of a positive reception. Now that the AHCA’s proposal has been shelved, if only momentarily, some states that had not previously expanded Medicaid (such as Kansas) are moving forward with plans to expand it now. Such plans still face stiff opposition from conservatives, but the failure of the AHCA, along with the ACA’s growing popularity, may shift the argument in favor of expansion.

The end result of this recent healthcare debate, however, was retention of the status quo: The ACA is still in effect, and a significant number of states have still not expanded Medicaid coverage. The underlying issue that Rosenbaum discussed in her article has still not been addressed. The clash between federal and state policy continues: The marriage is not over, but it is not clear whether it can be saved.

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