Expand Medicaid to Protect the Uninsured
By Colin McAuliffe
The COVID crisis has highlighted the madness of many aspects of the US healthcare system. As millions of people are being put out of work, they are being kicked off their health insurance. Even worse, the loss of income that these workers have experienced makes it much harder to buy private insurance, which is an extraordinarily expensive product.
Medicaid is in a position to insure many of the people who are newly unemployed and uninsured. However, eligibility is severely limited by an asset test, which can make families with low incomes but modest amounts of savings ineligible. At a time when families are experiencing unprecedented losses of income, many of whom will be forced to deplete what savings they have to pay their day to day expenses, it is unconscionable to exclude someone from Medicaid for having a few thousand dollars in the bank. Simply put, voters agree that the Medicaid asset test needs to be eliminated immediately.
Dropping the asset test enjoys net positive 15% support, with support climbing to net positive 36% for voters under 45 and 34% for African American voters, two groups who have been hit especially hard by Covid related job loss and hours reductions.
While eliminating the asset test is a good start, we need to go much further to protect the uninsured. Defeating Covid requires that those who are sick get treated as speedily as possible, and financial barriers to care present a serious public health risk. Unemployment claims are surging, and this point of contact with the government presents an opportunity to automatically enroll claimants in public health insurance plan.
Even when automatic enrollment at unemployment offices is framed as a cynical ploy by Democrats to exploit an emergency, there is strong support for it , at net positive 14%. Again, we see exceptionally high support among the young and African American voters who have been hit the hardest.
The public is telling lawmakers that they support whatever it takes to defeat covid and provide financial security for everyone, but the realities of actually implementing these policies are much more complicated. First, the Supreme Court has ruled that the federal government cannot force states to expand Medicaid, which is jointly administered by the federal and state governments. Several Republican states refused to expand Medicaid under the Affordable Care Act, rejecting billions of dollars in federal aid which they could have used to give their most vulnerable residents insurance. States that refused expansion did so at the cost of their own budgets, subjecting their residents to worse overall mortality, worse infant mortality, and worse poverty outcomes. States simply can’t be trusted to protect their residents, which makes Medicaid much less than ideal for auto enrollment. However, Tricare has been suggested as an alternative public plan to Medicaid which could be used for auto enrollment which circumvents these issues. Similarly, Pramila Jayapal and Bernie Sanders have proposed an emergency insurance program under Medicare.
Ideally, funding for an emergency expansion of public insurance would come from the federal government, since states face restrictive budget constraints and are especially strapped for cash during recessions. Budget constraints may also limit how much state governments can borrow to finance new projects, which will make it difficult for states to act on their own if the federal government can’t get its act together.
The Federal Reserve may provide another path forward. The fed recently announced that they will be buying state and municipal debt, primarily as a way to stabilize markets to prevent the Covid recession from deepening. It’s not yet clear that this program could be used to fund new projects to respond to Covid, but the possibility seems open. When states need to sell large amounts of new bonds for a specific project such as construction and maintenance of roads, they often create off budget agencies to do so. It may be possible for state governments to create one of these agencies for an emergency expansion of Medicaid, and finance them through bonds sold to the Fed.
Covid has shown that countries with modern, universal healthcare systems can be overwhelmed by a pandemic. But the US system is unique in the way that exposes residents to enormous financial burdens for getting sick, which are placed on top of the financial burdens of an unprecedented recession. If we don’t take drastic action to insure as many people as possible as rapidly as possible, the financial devastation from coronavirus will last for decades.
Colin McAuliffe (@colinjmcauliffe) is a co-founder of Data for Progress.