Why one key Democrat doesn't want the federal government picking up the tab for Medicaid expansion

WASHINGTON – One Senate Democrat could block an effort by his colleagues to extend health care to millions of poor people in a dozen states.

For West Virginia Sen. Joe Manchin, his opposition is a matter of fairness.

Taxpayers in his state – and in the 37 other states that have expanded Medicaid eligibility under the 2010 Affordable Care Act – pick up 10% of the cost to cover low-income residents who are covered by the law.

Why then, he argues, should the federal government now pay for 100% of the cost in the states that have refused the 90-10 split – as Democrats are proposing to do in the massive social spending bill pending in Congress.

“For states that held out, to be rewarded 100% is not fair,” Manchin told reporters Monday.

Georgia Sen. Raphael Warnock, who represents one of the holdout states, counters that it’s not fair that Georgians’ federal tax dollars go toward Medicaid programs in other states when low-income Georgians are barred from the program.

“People of Georgia are paying taxes for health care that they cannot access while subsidizing health care in West Virginia and in other states,” he said Tuesday.

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The dispute over Medicaid is one of the final issues Democrats need to resolve before voting on the budget legislation. Because Democrats have no votes to spare in the Senate, Manchin could single-handedly scuttle the effort to expand Medicaid in Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin and Wyoming.

That’s frustrating for policy advocates like Judy Solomon, an expert at the liberal Center on Budget and Policy Priorities, who argues extending Medicaid to all states is the single most important action Congress could take this year to advance equity in coverage and care.

“Small funding differences between states may not be ideal,” Solomon tweeted, “but the far larger inequity facing policymakers is whether to provide health coverage to millions of people with incomes below the poverty line who lack it because of the state where they live.”

How we got here on Medicaid expansion

When lawmakers wrote the Affordable Care Act, often referred to as Obamacare, they attempted to both expand eligibility and even out the coverage disparities in Medicaid, which is jointly financed by states and the federal government.

Most states would have to provide Medicaid to adults without dependent children for the first time and increase income eligibility to 138% of federal poverty – now about $17,774 for a single person.

Before the law passed, the typical state Medicaid program covered working parents who made less than 63% of the poverty line and nonworking parents with incomes below 37% of the poverty line.

In Texas, for example, a parent in a family of three must make less than $3,734 a year to qualify. Adults without kids are not eligible at any income level.

But after the law's enactment, the Supreme Court ruled in 2012 that states did not have to go along with the changes.

"Some states may indeed decline to participate, either because they are unsure they will be able to afford their share of the new funding obligations, or because they are unwilling to commit the administrative resources necessary to support the expansion," Chief Justice John Roberts wrote. "Other states, however, may voluntarily sign up, finding the idea of expanding Medicaid coverage attractive, particularly given the level of federal funding the act offers at the offset."

The federal government paid 100% of the expansion cost for the first two years. The states’ share gradually increased to 10%, a much lower portion than the 22% to 50% that states pick up for other Medicaid enrollees.

States’ costs can also be offset by savings in other areas, particularly from reduced payments to hospitals for uncompensated care.

Still, a dozen states have held firm in their opposition to expansion, offering both ideological and fiscal arguments against it.

Democrats tried to counter the latter objections by including in the March pandemic relief package billions of dollars in new incentives for the holdout states. None has bit.

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That prompted lawmakers to propose in the pending spending package a federally funded program for non-expansion states. States that have already expanded would be penalized if they try to push their enrollees onto the federal program.

Medicaid expansion and people of color

If it passes, Medicaid enrollment would increase by 4 million at a cost of $323 billion between 2022 and 2031, according to the nonpartisan Congressional Budget Office.

Most of those who would become newly eligible are in the South, are people of color and live in poverty, even though most are in a family with at least one worker, according to the Kaiser Family Foundation, a nonpartisan health research organization.

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Warnock blamed GOP leaders in Georgia for blocking expansion, saying the uninsured are “being held hostage in a political game being played by cynical politicians at the state level.”

But he needs Manchin, his fellow Democrat, if he wants to get around that opposition.

Sen. Jon Ossoff, D-Ga., said he and Warnock are in constant communication with Manchin.

“I think that we are making progress,” Ossoff told reporters Tuesday. “The negotiations are ongoing. And we’re continuing to push forward.”

For his part, Manchin likewise said the talks are constructive and everyone is “trying to work and find that pathway forward.”

But, he added Tuesday, “right now, it’s just so tenuous. Everything is so tenuous.”

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Maureen Groppe has covered Washington for nearly three decades and is now a White House correspondent for USA TODAY. Follow her on Twitter @mgroppe.

This article originally appeared on USA TODAY: Medicaid: Sen. Manchin opposes expansion in Biden's Build Back Better