ACA ruling could upend Medicaid expansion
Medicaid expansion would be wiped out and millions of Americans would lose health insurance coverage if the sweeping ruling out of Texas that found the Affordable Care Act unconstitutional stands, experts told Healthcare Dive.
While many legal scholars believe the ruling will be overturned, it creates a big cloud hanging over the program.
Without the ACA, there would be no federal match to help states fund Medicaid expansion. It would be unlikely that states could continue to cover individuals in the Medicaid expansion population on their own without federal dollars, Sabrina Corlette, an expert on healthcare policy and a research professor at Georgetown University, told Healthcare Dive. "We'd right back where we started before the ACA was passed," she said.
Managed care providers such as St. Louis-based Centene and Long Beach, California-based Molina would lose a chunk of business tied to the increase in activity from Medicaid expansion. Meanwhile, providers such as HCA and Tenet have enjoyed greater profitability due to a reduction in uninsured lives thanks to expansion and individual plan availability through the marketplaces, according to analysts with Jefferies.
The ACA's tentacles are intertwined throughout numerous sectors of the healthcare industry, and a key provision was expanding Medicaid to cover more people, mainly low-income adults without children.
Medicaid expansion helped usher in historic lows in the uninsured rate. About 15 million people have coverage thanks to greater opportunity for enrollment, according to figures from the Kaiser Family Foundation. Several states launched expansion plans immediately, taking the government up on its over to cover 100% of the cost for the first two years.
But even as states have had to shoulder more of the costs, the number of expansions has increased. Under the Trump administration, conservative states have opted for extending the program with controversial restrictions like work requirements. Now, 37 states and the District of Columbia have opened enrollment to more residents.
"It's hard to overstate the chaos this would create," Corlette said of peeling back Medicaid expansion.
Manged care companies such as Centene and Molina have been able to grow because of the program's expansion in more than three dozen states. Centene covers about 1.2 million people in the expansion population, which represents about 9% of the company's total membership, according to the latest figures from September.
Competitor Molina covers roughly 664,000 expansion lives, which represents about 16% of its total membership, according to its most recent earnings report.
"While we are disappointed in the recent Northern District of Texas court's ACA ruling, we recognize that this is a first step in what will be a lengthy appeals process," Molina said in a statement emailed to Healthcare Dive. "Regardless, the ACA will remain in effect for 2019, and we are optimistic that it will remain in effect thereafter. We support efforts by Congress and the Administration to stabilize the ACA’s programs and ensure continued protection of Americans with pre-existing conditions."
Centene said it believes the courts will uphold the ACA. Still, the next court is also likely to tilt conservative, and many think it is headed for the Supreme Court.
"In the unlikely event they do not, it is our intent to file for a new product. Current members will be able to enroll in this new product without health underwriting and irrespective of pre-existing conditions," the company added.