Sens. Urge Action On Medicaid Coverage Gap In Reconciliation Bill

Inside Health Policy

August 4, 2021 9:15 pm

Sens. Raphael Warnock (D-GA), Jon Ossoff (D-GA) and Tammy Baldwin (D-WI) sent a letter to congressional leadership, President Joe Biden and HHS Secretary Xavier Becerra Tuesday (Aug. 3) asking them to close the Medicaid coverage gap in the reconciliation package expected later this year, as the Senate finishes up work on the bipartisan infrastructure bill and Democrats turn to figuring out how to pay for their solo so-called social infrastructure plan.

The three senators last month introduced the Medicaid Saves Lives Act, which would create a federally administered Medicaid-like program available to adults earning up to 138% of the federal poverty level in the 12 states that have not yet expanded Medicaid under the Affordable Care Act. A companion bill has been introduced in the House.

More than 2 million Americans, mostly people of color and those living in southern states, stand to gain coverage through a federal Medicaid-like program.

The senators Tuesday said Congress should use the Medicaid Saves Lives Act to close the gap.

“Unlike other paths to close the coverage gap, a federally administered Medicaid-like program would provide more robust benefits with lower out-of-pocket cost expectations not found in other plans. Therefore we urge you to include provisions closing the coverage gap that result in the creation of a Medicaid-like program administered by the federal government,” the letter reads.

Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) have both said there is space for a Medicaid gap fix in the $3.5 trillion budget resolution that will lay the foundation for Democrats’ reconciliation package.

The extent to which Medicaid coverage gap fixes — and other health care reforms — can be included in the reconciliation bill likely depends on how much savings Democrats can glean from drug-pricing reforms. Cuts to Medicare Advantage may also be on the table to pay for health priorities in the reconciliation package.

Cost estimates for the Medicaid Saves Lives Act aren’t yet available.

The Urban Institute put out a report on June 30 estimating that it would cost between $181 billion and $335 billion over 10 years to expand premium tax credit eligibility for exchange plans to people making below 100% of the federal poverty level. Closing the gap through a public option that reimburses at Medicare rates would cost less, the Urban Institute found.

House Ways & Means health subcommittee Chair Lloyd Doggett (D-TX) said last month that his committee is looking to solve the problem by expanding premium tax subsidies to help those in the coverage gap purchase exchange plans. The House Energy & Commerce Committee is said to be examining federal Medicaid-like options.

An Energy & Commerce spokesperson said there were no updates to share as of Monday (Aug. 2) and a Ways & Means spokesperson did not respond to inquiries about how the committee’s proposal is coming along.

Doggett has also introduced a bill that would allow local governments in non-expansion states to expand Medicaid eligibility for their own residents. This plan is likely to be less expensive than expanding premium subsidies or a federal Medicaid-like program but would ultimately provide less coverage.