Mississippi Medicaid expansion could include some Arkansas-style policy, but hurdles remain

Check out map of which states have adopted Medicaid expansion, from health care policy nonprofit KFF. It's kind of wild, given how bitterly Republican politicians initially opposed the policy.

Mississippi could be next, where an expansion measure continues to advance in the state Legislature — with a plan perhaps partly inspired by the unusual variation on Medicaid expansion first enacted in Arkansas in 2014.

The Mississippi proposals currently being considered feature "work requirements," so even if the Mississippi Legislature passes a bill, it could be impossible to get federal approval if Joe Biden returns to the White House.

There's a long way to go, but the fact that Mississippi might expand Medicaid access to low-income people under the Affordable Care Act shows just how far we've come since the ACA was passed twelve years ago.

Medicaid expansion under the ACA was originally meant to be national, but a U.S. Supreme Court decision threw it to states to decide whether to implement it. Expansion covers non-disabled adults who make less than 138% of the poverty line (today, that's $20,783 for an individual or $43,056 for a family of four).

When I first began working at the Arkansas Times, in late 2012, then-editor Lindsey Millar put me on the Capitol beat. "You should get acquainted with the Medicaid expansion thing," he said. "It's gonna be the big fight."

Back then, it seemed like an impossible fight here in Arkansas, where ascendent Republicans had just won a tiny majority in the House. The majority leader at the time, Bruce Westerman (now in Congress) said that a "vote for Medicaid expansion is a vote for Obamacare." Gulp.

But somehow, some way, Democratic Gov. Mike Beebe and a bipartisan group of lawmakers managed to get the thing through. It was quite a victory, not just because Arkansas was a newly red state that was getting redder, but because an unusual quirk in the state's constitution meant that unlike other states, approval required 75% supermajorities in both chambers of the Legislature.

To get there, Arkansas went with a plan partly concocted by Republican lawmakers — what became known as the "private option" (for better or worse, a nickname coined by me). Arkansas expanded coverage by using federal funding for Medicaid expansion to purchase private health insurance plans on the state's Obamacare exchange, rather than using the Medicaid program directly. That was enough to attract GOP support, and the Obama administration OK'd Arkansas's unusual plan.

At the time, the private option got a lot of national attention and many thought that this would be a pathway for other red states. But other than some minor experiments here and there, the idea didn't really catch on.

Now the Mississippi Legislature is considering a plan to use something a bit like Arkansas's "private option" approach for the highest-income group in the expansion pool — those making more than the federal poverty line (that's $15,600 for an individual and $31,200 for a family four).

In other words: Mississippi would use private insurance plans to cover the people between 100 and 138% of the federal poverty level and use the regular Medicaid program to cover everyone else.

One key difference: While part of the novelty of the original Arkansas private option was the use of the regulated marketplaces known as "exchanges" that were newly created by the ACA, Mississippi would at least in part use managed care organizations, which frequently contract with states to cover certain Medicaid beneficiaries. (Arkansas uses a form of Medicaid managed care in the PASSE program, but it only covers certain high-needs beneficiaries, such as severely disabled people.)

The reporting (see below) is a little vague, but it sounds like Mississippi would also have the Medicaid program directly buy private health insurance plans from the exchange, "private option"-style, for at least some people in this group.

Currently, there are two plans that the Mississippi House will consider — one is the original Senate plan and one is a compromise proposal to secure House support.

Via a good report in Mississippi's Magee News, here's a summary of the two proposals:

The original Senate proposal requires the Mississippi Division of Medicaid to apply for a waiver to cover people making up to 100 percent of the federal poverty level (less than $31,200 for a family of four). The plan would not move the 140,000 people between 100-138 percent of the federal poverty level who are currently on commercial plans on the federal health insurance exchange to Medicaid plans—and the state would receive no federal match money for this population. The waiver, if approved by CMS, would allow the state to draw down 77 percent in federal match money and would primarily be paid for through an assessment on managed care organizations.

The new Senate compromise proposal requires the Mississippi Division of Medicaid to apply for a waiver to cover people making less than 100 percent of the federal poverty level to be covered by a managed care organization. Medicaid would also cover people between 100-138 percent of the federal poverty level through the federal health insurance exchange (138 percent of the federal poverty level is less than $43,056 for a family of four). The waiver, if approved by CMS, would allow the state to draw down 90 percent in federal match money, but would also require the state to pay 10 percent of the cost of coverage/the commercial plans through 138 percent of the federal poverty level. The program would be largely paid for through an assessment on managed care organizations and an increased insurance premium tax on exchange plans provided to the eligible Medicaid beneficiaries.

The original Senate proposal is weird. It covers people below the federal poverty level via the ACA's Medicaid expansion, which means the federal government would pay for 90% of the costs. This is known as the "Medicaid match rate," which is higher for those newly insured under the ACA than for other Medicaid groups. The state would then cover the remainder — those between 100-138% of the federal poverty level — using the Mississippi match rates for regular, pre-ACA Medicaid, which is just under 77% rather than 90%. So, the state would be on the hook for more of the cost. It's hard to say which way would work out better on net for the state, but at first blush it seems like a goofy policy design.

Mississippi House members seemed to agree, and they asked for a compromise that would retain the 90% federal match money for all beneficiaries. Enter the second proposal, which covers that higher-income group via some combination of private managed care companies and/or purchasing private plans directly on the exchange. This approach seems likely to be a better deal for the state since it combines the enhanced federal match with additional pathways for state revenue: assessments on the managed care companies and an increased insurance premium tax on exchange plans provided to them. These revenues are meant to cover most of the state's portion.

Even if a bill passes and gets signed by the governor, there is one major roadblock remaining before Mississippians gain coverage: Republican politicians' obsession with so-called "work requirements" is likely to be a no-go with the Biden administration if the president wins a second term.

In practice, these aren't requirements to work, but a mandate that beneficiaries keep up with busybody paperwork to report their work-related activities. The empirical evidence, including from the disastrous experiment with the program in Arkansas, is clear: Such policies achieve none of the Medicaid program's statutory goals, they do nothing to help people's health, and they don't even manage to get more beneficiaries to work. The only thing they're good at is culling the rolls and kicking people off the program, including people who are working. It's a red-tape nightmare, a bureaucratic boondoggle that feels like it was designed this way on purpose, with tens of thousands of low-income people lost in the shuffle.

Arkansas was the first state to try imposing such requirements after getting the OK from the Trump administration — a reversal of the Obama administration's refusal to grant them to red states. More than 18,000 low-income Arkansans had their health insurance snatched away in just seven months in 2018, before a federal judge halted the program.

Legal battles over work requirements aren't over. Both proposals in Mississippi have a poison pill: The entire law is negated if the feds don't approve everything, including the work requirements. The House compromise does have language instructing the attorney general to appeal to federal court if the feds deny their request. That could take a while, and it's hard to predict how this issue will shake out in the courts.

If Donald Trump gets back in office, federal approval of work requirements will surely come easy (though we might then have another round of legal challenges like the one that stalled the requirements in Arkansas).

If Biden is reelected, his administration would almost certainly say no. But it's a tough spot politically. Biden doesn't want to establish a precedent for work requirements because they are a cruel, ineffective and stupid policy. But saying no might mean that more than 100,000 Mississippians who stand to gain coverage would continue to go uninsured. The situation is especially bleak for those below the poverty line, who do not qualify for federal subsidies to buy health insurance themselves on the exchange, because of a quirk in the Affordable Care Act.

It may take a while, but what's happening at the Mississippi Legislature seems like a clear signal that Medicaid expansion is coming to the state eventually. The voters might have already approved it — Medicaid expansion always dominates when it's put to popular referendum — but right-wing shenanigans short-circuited the ballot initiative process in the state, perhaps in good part with this issue in mind.

There used to be a lot more orange on that map at the top of this post. But Medicaid expansion is gradually winning the day. States are slowly but surely taking the massive pot of federal money on offer so that can offer health insurance to their poorest citizens. Anti-Obamacare advocates blew threw millions of dollars trying to block or repeal Medicaid expansion in Arkansas, but the policy is here to stay.

The traditional Medicaid program itself, which was passed in 1965 — aiming to provide coverage to disabled people, very poor parents, the elderly and others in need — also took a while for states to come around. Mississippi didn't enact its program until four years later, in 1969; the last state to finally adopt Medicaid was Arizona in 1982, or 17 years after the federal law was passed.

Medicaid expansion first took effect in 2013, so we're 11 years out now. How much longer will the last refusenik states hold out — passing up billions of dollars in federal money, cutting off their noses to spite Obama's face? Texas and Florida are among them, collectively home to more than 50 million people. The tide continues to turn, but in the meantime, millions of poor Americans living in these last-stand states will continue to suffer thanks to the right-wing ideologues in power.

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