September 29, 2011 — Summary of "Political Tug-of-War Over Medicaid Could Have Major Implications for Reproductive Health Care," Sonfield, Guttmacher Policy Review, Summer 2011.
As one of the largest and fastest growing components of the U.S. budget, Medicaid has become a target of congressional Republicans who seek to reduce the federal deficit without raising taxes, Adam Sonfield of the Guttmacher Institute writes. While Medicaid ultimately was spared in the debt ceiling debate this summer, Sonfield notes that cuts were given "serious consideration" by both political parties, and the program likely will remain a "clear target" in fights to come.
Meanwhile, at the state level, governors and legislators argue that new requirements for Medicaid under the federal health reform law will limit states' flexibility to balance their budgets. Starting in January 2014, states will be required to extend Medicaid eligibility to all citizens -- and legal residents who have been in the country at least five years -- with incomes up to 133% of the poverty level.
In most states, children with family incomes of up to 200% of the poverty level currently are eligible for either Medicaid or the Children's Health Insurance Program. For adults who have children, Medicaid eligibility criteria vary considerably, with some states setting their income eligibility levels at 25% of the poverty level or below. In nearly every state, adults who do not have children are ineligible for Medicaid.
Medicaid Coverage of Reproductive Health Services
"Medicaid -- even before the considerable expansion of the program that would come with the successful implementation of the [health reform law] -- is inarguably the most financially important U.S. program supporting reproductive health services," Sonfield writes. Medicaid and CHIP provide comprehensive health coverage for more than nine million women ages 15 through 44, including 40% of women with incomes below the poverty level.
According to Sonfield, Medicaid traditionally has covered a broad package of sexual and reproductive health services. While states have some latitude in how to define and cover services, federal law requires states to cover pregnancy-related care and family planning services and supplies. In 2006, Medicaid paid for 48% of all U.S. births, including 64% of births resulting from unintended pregnancy. Medicaid also paid for 71% of all federal and state spending on family planning services and supplies.
All states cover testing and treatment for sexually transmitted infections, as well as pregnancy tests, cervical cancer screenings and most other reproductive health services. Federal law prohibits the use of federal Medicaid dollars for abortion services, though 17 states use their own funds to pay for abortion services for Medicaid beneficiaries.
Medicaid Expansion Under the Health Reform Law
In addition to expanding Medicaid income eligibility nationwide to 133% of the poverty level, the federal health reform law includes federal assistance for people with incomes above 133% but below 400% of the poverty level to allow them to purchase private insurance through the health insurance exchanges beginning in 2014. States also are encouraged to develop a standardized application system for Medicaid, CHIP and the exchange subsidies.
As a result of the health reform law, 16 million people who would otherwise be uninsured will have Medicaid coverage by 2019, the Congressional Budget Office estimates. According to Sonfield, although newly eligible beneficiaries will not necessarily have the same coverage as current enrollees, "all signs point to continued strong coverage for reproductive health care (except abortion)." He notes that the so-called "benchmark" plans that will be provided to new beneficiaries are required to cover family planning services and supplies.
Despite the fact that, for the most part, those newly eligible for Medicaid will be inexpensive to cover and the cost will be mostly born by the federal government, reactions from state-level conservatives to the health reform law's Medicaid provisions have been "far from enthusiastic," Sonfield writes, adding, "Politics are at play, naturally, with Republican governors and legislators lining up with their party mates in Congress to call with near unanimity for repeal of the [health reform law]." He writes that their specific objections "reflect their own priorities" and are "less directed to the eligibility expansion per se than to other provisions in the law." State lawmakers' main objection is that they are not permitted to scale back their Medicaid programs at a time when their budgets face increasing strain. In addition, they fear the costs of people who are already eligible for Medicaid but have not yet enrolled. Currently, about 62% of eligible adults are enrolled in Medicaid, but nearly all U.S. residents will be required to obtain insurance or pay a penalty beginning in 2014.
A proposal pushed by numerous conservatives calls for shifting Medicaid to a block grant system, which would provide a set amount of money to states rather than spending being determined by the number of people eligible. Supporters say this proposal will make costs more predictable for states and the federal government. A specific proposal -- authored by Rep. Paul Ryan (R-Wis.) -- would tie the grant amounts to population growth and overall inflation, which would result in 35% less funding for states in 2022 and 49% less in 2030 than under current law, CBO estimates. According to the Center on Budget and Policy Priorities, a funding reduction of this size, combined with increased state flexibility, would substantially restrict enrollment, services and access to providers, in addition to increasing patient cost-sharing. "If that scenario were to prove true, the impact on reproductive health care could be considerable," Sonfield writes.
"[B]ecause Medicaid is the financial foundation of [sexual and reproductive health] services for low-income women and men in the United States, this ongoing tug-of-war over the future of the program is one of the most important battles that reproductive health advocates currently face," Sonfield writes. He continues, "If the [health reform law] is successfully implemented, it should mean more and better coverage under Medicaid for the reproductive health needs of millions of U.S. citizens." However, "If instead Medicaid were reshaped to restrict costs, enrollment and care, then the future of the American safety-net would be in serious jeopardy," Sonfield concludes.