Tip Sheets

Coronavirus is shaking up states’ coverage expansion plans

By Dan Goldberg

Before the novel coronavirus pandemic, several states were looking at ways of expanding coverage – no matter what the outcome of the November election. But with the upheaval, uncertainty, and immense costs of coronavirus, much of it is on hold for now.

Here, I’ll highlight a few of the most notable states, including the status of Medicaid block grant requests.

Medicaid

California: Democratic Gov. Gavin Newsom’s plan to expand Medicaid to seniors, regardless of their immigration status, is on hold after coronavirus blew a $54 billion hole in the state’s budget. Undocumented immigrants up to age 26 were added to Medi-Cal rolls this year, but the prospect of adding another 27,000 seniors to the insurance program proved too costly.

Illinois: Democratic Gov. JB Pritzker, signed a budget in early June that makes Illinois the first state in the country to expand publicly funded health care coverage to undocumented seniors and seniors who have held green cards for less than five years.

Kansas: Democratic Gov. Laura Kelly had brokered a deal during the 2020 legislative session with Republican Senate Majority Leader Jim Denning to expand Medicaid, but it fell apart when the proposed expansion became entangled with a push to add an anti-abortion amendment to the state constitution. Denning has said he still thought that his expansion bill could have passed the Senate if it came to a vote, but with a legislative session truncated by the pandemic, he never got to try.

Oklahoma: Gov. Kevin Stitt, a Republican, walked away from his own expansion plan, blaming coronavirus for unanticipated costs that the state could not afford. Stitt had told the Trump administration that he wanted to expand the insurance program to tens of thousands of low-income adults this summer as part of a broader ongoing effort to block-grant the program. But the state withdrew its application last month. A more traditional Medicaid expansion offered under the Affordable Care Act is on the ballot on June 30. The ballot measure would amend the state constitution, effectively barring conservative changes to the program, such as work requirements. Stitt is still seeking those spending caps, but it is no longer attached to his expansion.

Missouri: Legislators are scheduled to vote on Medicaid expansion in August.

Tennessee: Republican Gov. Bill Lee also has asked the Trump administration for permission to turn Medicaid into a block grant program, though CMS chief Seema Verma said back in January that the state’s application is broader than the scope of the administration’s new guidance. That application is pending. Tennessee also is trying to get federal permission to use Medicaid dollars to establish a $104 million safety net fund to help uninsured coronavirus patients pay health bills.

Public Option

Colorado: Democratic Gov. Jared Polis endorsed a public option bill that would have lowered insurance rates on the individual market by capping what hospitals and doctors could charge, and tying their payments to a percentage of Medicare rates. Hospitals hated the idea and it would have been a tough slog to get the bill through the state senate where Democrats hold a two-seat majority. When the pandemic hit, the effort was shelved. Sen. Kerry Donovan, the bill’s sponsor, said current environment made it impossible to negotiate with hospital executives.

Connecticut: In early March, Democrats held a hearing on a long-shot proposal to create a public option and allow small businesses, nonprofits and labor unions to join the same public health benefits plan that is open to municipalities. The bill lacked the backing of Democratic Gov. Ned Lamont and did not receive a floor vote before the pandemic upended the session.

Washington: Democratic Gov. Jay Inslee acknowledged that his state’s version of the public option, which he signed into law in 2019, will take longer than some hoped to become a statewide reality. Like Colorado, Washington tried to lower premiums by capping payments. But Washington’s legislation did nothing to compel hospitals to accept lower payment rates. With coronavirus care cutting into hospital revenues, few are likely to jump on a deal they never liked in the first place. Inslee recently said the state is launching a public option this fall as planned, but said it could take years to ramp up the program.

Dan Goldberg (@DanCGoldberg) is a health care reporter who tracks state policy around the country for Politico.