Senior Policy Analyst
The new version of the Senate Republican bill to repeal the Affordable Care Act (ACA), as we explained about the previous version, would effectively end the ACA’s Medicaid expansion in the 31 states and Washington, D.C. that adopted it, causing millions to become uninsured. It would also make it nearly impossible for more states to expand in the future, denying future coverage to millions of uninsured Americans.
Under the ACA, the federal government pays 95 percent of the cost of covering expansion adults this year, phasing down to 90 percent by 2020 and each year thereafter. Starting in 2021, the Senate bill — the Better Care Reconciliation Act (BCRA) — would increasingly cut the expansion matching rate each year until it falls to the state’s regular matching rate (which averages 57 percent across all states) in 2024. This means states would have to spend 2.8 to 5 times more of their own funds by 2024 to maintain their expansions. This large cost shift to states — which we estimate would total $6.6 billion in 2021 and rise to $43 billion in 2024 — would likely cause states to end their expansions and drop coverage for millions of low-income adults who’ve gained health coverage. And while the Senate bill doesn’t explicitly eliminate the option for other states to take up the Medicaid expansion in the future, the huge cost shift to the states for doing so would make it highly unlikely that states would pursue that option, especially with many states facing persistent budget difficulties.
Consider, for example, the non-expansion state of Maine, where efforts to expand continue and Senator Susan Collins recently expressed support for expansion. Under the Senate bill, if the state took up the expansion next year, it would have to pay 36 percent of expansion costs. That’s in contrast to the 6 percent it would pay under current law. By the time the BCRA’s Medicaid expansion cuts were fully phased in, it would cost the state three and a half times as much each year as under the ACA.
Maine isn’t the only state in which efforts have been underway this year to expand Medicaid: policymakers in Kansas, North Carolina, and Virginia also have sought to expand Medicaid, though their efforts have fallen short.
Medicaid expansion has produced wide-ranging benefits for states. Expansion states have experienced the largest gains in health coverage since the ACA took effect. As more low-income people have gained coverage, demand for state-funded programs that serve the uninsured in expansion states has dropped. This, combined with the expansion matching rate, has produced budget savings in many states. And the people who have gained expansion coverage are healthier and more financially secure.
If the remaining states expanded, 4.8 million uninsured people would gain Medicaid eligibility. But the Senate bill would continue to deny them Medicaid coverage, while causing millions of others who’ve gained coverage through the expansion to lose it.