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Senate bill would incentivize Medicaid expansion nationwide

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U.S. Sens. Mark Warner and Tim Kaine (D-Va.) and Rev. Raphael Warnock (D-Ga.) are introducing legislation to incentivize Medicaid expansion nationwide.

The States Achieve Medicaid Expansion (SAME) Act of 2021 would allow states that expanded Medicaid after 2014, or who expand Medicaid in the years ahead, to receive the same full federal matching funds as states that expanded Medicaid earlier under the terms of the Affordable Care Act.

“The COVID-19 crisis has destroyed jobs all across America, costing millions of people their employer-provided health benefits at a time when health insurance could make or break a family financially,” said Sen. Warner, a former Virginia governor. “Not only will this legislation encourage Medicaid expansion, which has been shown to improve health outcomes, it will also bring crucial federal dollars back to Virginia. With state and local governments drowning in red ink as they work to combat this virus, I can’t think of a better time to ensure that states like Virginia, which expanded Medicaid after 2014, get their fair share of federal funding.”

“Health care is a human right, and for too long, too many Georgians have been denied access to affordable health care through Medicaid,” Sen. Reverend Warnock said. “I’ve long believed that expanding Medicaid in Georgia is an important step toward making affordable health care for all a reality; in 2017 I was even arrested at the U.S. Capitol for advocating for Medicaid expansion. Now, as a voice for Georgia in the U.S. Senate, I’m proud to join Sen. Warner in introducing the SAME Act to encourage states like Georgia to expand critical Medicaid coverage to those who need it most, and help ensure during this pandemic and beyond that families are able to get the health care they need to not just survive, but thrive.”

The SAME Act would ensure that the 14 states that chose to expand Medicaid after January 1, 2014 are eligible for the same level of federal matching funds as those that expanded earlier under the terms of the Affordable Care Act.

These states include Alaska, Idaho, Indiana, Louisiana, Maine, Michigan, Missouri, Montana, Nebraska, New Hampshire, Oklahoma, Pennsylvania, Utah and Virginia.

Medicaid expansion went into effect in the Commonwealth on Jan. 1, 2019, allowing more than 400,000 Virginians to access low-cost or no-cost healthcare coverage under Medicaid.

The Affordable Care Act provides financial support from the federal government to states that have expanded their existing Medicaid programs to provide health care coverage to all individuals up to 138 percent of the federal poverty level.

The federal government covers the full cost of expansion for three years, phasing down to a 90 percent match rate for the sixth year of the expansion and in subsequent years. In passing the Affordable Care Act, Congress intended for all states to expand Medicaid in 2014.

The Supreme Court’s holding in National Federation of Independent Business (NFIB) v. Sebelius made expansion optional for states. As a result, states choosing to expand coverage after 2014 do not receive the same federal matching rates as those that expanded immediately.

The SAME Act would address this discrepancy by ensuring that any states that expand Medicaid receive an equal level of federal funding for the expansion, regardless of when they chose to expand. Under the bill, a state would receive three years of full federal funding, phasing down to a 95 percent Federal Medical Assistance Percentages (FMAP) in Year 4; a 94 percent federal contribution in Year 5; 93 percent in Year 6; and, 90 percent for each year thereafter.

The SAME Act would save Virginia’s hospitals an estimated $300 million per year in the first three years of implementation, according to the Virginia Hospital & Healthcare Association. That increased federal funding under the SAME Act will be especially meaningful in medically underserved areas, where patients are more likely to be uninsured and hospitals have struggled to stay afloat financially and keep their doors open, a problem that has only been exacerbated by the COVID-19 crisis.

In Virginia, three rural hospitals – in Norton, Patrick County and Lee County – have closed since 2013.

Currently, 39 states and the District of Columbia have adopted Medicaid expansion, including Oklahoma and Missouri which passed ballot initiatives to expand Medicaid in 2021. In the 12 states that have not yet expanded their programs as envisioned under the Affordable Care Act, more than 2 million low-income adults fall into a “coverage gap,” due to incomes that are too high to be eligible for Medicaid, but are too low to meet the limit that would allow them to receive tax credits to purchase affordable coverage in the health care marketplace.

Without Medicaid expansion, most of these individuals are likely to remain uninsured, as they have limited access to employer coverage and frequently find the cost of unsubsidized marketplace coverage to be prohibitively expensive.

Numerous studies have shown that expanding Medicaid benefits states directly and indirectly, in the form of jobs and earnings growth, additional federal revenue, increased Gross State Product, increased state and local revenues and reduced uncompensated care and hospital costs.

“During this continued COVID-19 pandemic ensuring Virginian’s health needs are covered is more important than ever. Senator Warner’s legislation strengthens Virginia’s expanded Medicaid program, which has extended quality health care coverage to over 500,000 individuals. We strongly support this legislation and the Senator’s efforts to expand quality health care coverage to more Virginians,” said Jill Hanken, health attorney for the Virginia Poverty Law Center.

“Good health is essential to thriving communities, and the expansion of Virginia’s Medicaid program in 2018 has led to over 500,000 people gaining access to quality health coverage — many for the first time. Senator Warner’s legislation will strengthen the Commonwealth’s Medicaid program by ensuring Virginia receives its fair share of federal matching payments. It will also improve access to health coverage nationally by encouraging additional states to expand their Medicaid programs. We thank Senator Warner for introducing this important legislation,” said Freddy Mejia, health policy analyst for the Commonwealth Institute for Fiscal Analysis.

Text of this legislation is available here. A summary is available here.


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