Tuesday, February 28, 2017

The Tragedy of the Medicaid Expansion: A Story of Race and Federalism (Part I)

Stephen Griffin

It is well known that in NFIB v. Sebelius, the Supreme Court made the Affordable Care Act’s Medicaid expansion optional for state governments.  The Court’s de facto rewriting of the law created the current patchwork of states – 32 (including DC) have accepted the expansion, at least in some form, and 19 have not.  It is also widely appreciated that in the states refusing the Medicaid expansion, there is a “coverage gap” unanticipated by Congress.  The coverage gap applies to those adults who would have been covered by the Medicaid expansion, yet earn less than the amount required to be eligible for coverage through the insurance exchanges created by the ACA.  These adults in the 19 states are out of luck as far as health care coverage, at least if their employer does not offer an insurance plan.  And there are many such people.

What is not well understood is that the Court’s decision to make the Medicaid expansion optional opened a door leading to a very unfortunate sectional and racial past.  Sectional is not a term one hears much anymore, but in fact there is a case to be made that the Court has been busy reviving a distinctively sectional racial vision in other areas of constitutional law, most notably voting rights.  With respect to the ACA, the sectionalism of Sebelius became apparent quickly as every southern state (and every former member of the Confederacy) except for Arkansas refused the Medicaid expansion.  As I will elaborate, this had drastically bad health implications for the historically very poor populations, many of whom are African American, in southern states.  Yet these states, save for Arkansas and Louisiana in 2016, have continued to reject the Medicaid expansion.

So I write these posts out of a concern that especially among constitutional law scholars (as opposed to health law scholars who are highly aware of the policy details I discuss), the distinctively sectional and racial implications of the Court’s Medicaid decision have been largely overlooked (although one exception is this article by Tomiko Brown-Nagin and I will cite other articles by health law scholars as I go).  I hope the information I present will go some distance to remedying this oversight in constitutional law casebooks and legal scholarship.  It also seems a good time to look back on this aspect of Sebelius, as Congress, President Trump, and the nation’s governors debate whether the ACA should be changed.

The tragedy of the Medicaid expansion is that it was fairly foreseeable that the burden of the Court’s decision would fall on the backs of extremely impoverished adults in southern states and that this burden would be strongly connected with America’s historic burden of race.  In changing the legal structure of the ACA, in adopting, in effect, a new law the Court was also making a policy decision, one with vast consequences.  Yet little of this was evident from the Court’s opinion.  Nor could it be gleaned from the many expert amicus briefs.  This is partly because few anticipated that the Medicaid expansion might be struck down and so no studies were run to anticipate what might happen.  But it is also because the Court did not ask the right questions.

The Court did have some evidence before it as to what might happen.  Chief Justice Roberts cited the Kaiser Family Foundation’s 2011-12 report “Performing Under Pressure,” for the proposition that there was a wide variance among states as to how much eligibility under Medicaid was accorded to unemployed and employed parents (Figure 11 cited by the Court).  In the report, to the right of Figure 11 was Figure 12, a somewhat prescient map that showed the relatively low rates of eligibility for working parents prevailing across the South.

Unfortunately, the Court’s discussion of the structure of Medicaid was far from ideal and could easily produce false impressions.  For example, the Court gave the impression that prior to the ACA, states enjoyed considerable freedom with respect to all aspects of Medicaid.  In reality, the Medicaid program as it existed just prior to the ACA provided reasonably generous and fairly uniform nationwide coverage to children and pregnant women, while allowing the variance the Court noted to parents.  The key group not covered at all before the ACA was childless adults, which the Act mandated be covered at a uniform standard of 133 percent above the federal poverty level (along with all parents as well).  Mark that uniformity well and keep it in mind.  In addition, one could also pick up the impression from the Court’s opinion that Medicaid had always covered all children and pregnant women, whereas in reality the fairly uniform coverage in current law had only been achieved through hard-won reforms over time.  As Justice Ginsburg’s dissent accurately noted, the effect of the reforms, particularly in 1988 and 1990, was to add “millions to the Medicaid-eligible population.”  This was a considerable expansion of Medicaid.

The transition to the Medicaid expansion recently played out in Louisiana.  After refusing to expand Medicaid under Republican Governor Bobby Jindal, Louisiana elected Democrat John Bel Edwards in 2015, who endorsed the Medicaid expansion during his campaign.  Louisiana adopted the expansion in 2016, resulting in 378,000 new enrollments in Medicaid by January 2017.  Of those, 288 adults were diagnosed with diabetes, 676 found out they had hypertension, 1600 were screened for colon cancer and 22 diagnosed with cancer and are now receiving treatment, all without fiscal ill effects.  Like some other southern states, Louisiana is not especially well off and badly needs this new federal revenue.  So why the initial refusal?  This impelled me to do some research on the sources of the regional variation in Medicaid eligibility.  This history, the deep background to the fairly uniform southern response to Sebelius, is the topic of my next post.

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