The Pandemic and Economic Crisis Are Wake-Up Call for State Medicaid Expansion

A doctor examines a patient on February 21, 2013, in Miami, Florida.

Nine months into the COVID-19 pandemic, about a thousand Americans are dying of the new virus each day, and the U.S. economy is still down 10 million jobs below its prepandemic level. Millions of people have become uninsured because of layoffs and the loss of employer-sponsored health insurance. For people who lose job-based coverage, the Affordable Care Act (ACA) provides options to regain coverage, including through Medicaid or private plans with financial assistance.

In the 12 states that have yet to adopt the ACA’s Medicaid expansion, however, low-income families’ economic problems are compounded by the lack of affordable options for health insurance. Texas and Florida, the nation’s largest nonexpansion states—which, like others that have not expanded Medicaid, already had lower rates of health coverage prior to the pandemic—were COVID-19 epicenters over the summer. The fall surge in cases has hit the Upper Midwest, the Rocky Mountain West, and Appalachia especially hard, including the nonexpansion states of Kansas, Tennessee, South Dakota, Wisconsin, and Wyoming.

The novel coronavirus pandemic has disproportionately affected communities of color. Systemic racism has led to disproportionately high rates of underlying health conditions among communities of color, increasing the risk of more serious complications and death from the virus. Black Americans are more than three times as likely to have died from COVID-19 compared with their white counterparts, and they are disproportionately more likely to reside in nonexpansion states. New CAP analysis finds a mortality gap between expansion and nonexpansion states even among majority-Black counties: 153 of every 100,000 residents died from COVID-19 in nonexpansion states, compared with 125 per 100,000 residents in expansion states.

Medicaid expansion is an opportunity to improve health insurance coverage for low-income residents, narrow racial disparities in access to treatment, and help insulate low-income residents from the effects of the economic recession. States that have not yet expanded Medicaid should view the pandemic as a wake-up call to do so. The federal government should secure the future of Medicaid expansion—and the rest of the ACA—by withdrawing its support for the ACA repeal lawsuit scheduled to be argued tomorrow before the Supreme Court.

Medicaid expansion improves health care coverage and care affordability

Even before the pandemic, many Americans were concerned about affording health care. Roughly 40 percent of Americans say they felt “very worried” or “somewhat worried” about paying for health care, according to Gallup. During the pandemic, the lack of health coverage could discourage patients with COVID-19 symptoms from seeking needed care, leading to worse health outcomes and wider spread of the virus. Polls suggest that the fear of health care costs may deter some patients from seeking care: A Gallup survey in April found that 14 percent of adults, including 10 percent of white adults and 22 percent of nonwhite adults, said they would avoid seeking treatment for COVID-19-like symptoms due to cost concerns. In response to concerns about COVID-19-related health care costs, Congress passed the Families First Coronavirus Response Act in March. While the bill eliminated cost-sharing for COVID-19 testing, some patients have been charged upfront or after the fact, and other patients may owe out-of-pocket payments if they are not tested for the virus or receive care for a non-COVID-19 diagnosis.

States can help protect patients from unexpected health care costs—and give them greater peace of mind—by passing Medicaid expansion. Under the ACA, the federal government provides states with additional federal funding to expand Medicaid coverage to adults with incomes up to 138 percent of the federal poverty level. When states expand Medicaid, the federal government pays 90 percent of costs for the newly eligible beneficiaries—regardless of the cost or number of enrollees.

Medicaid expansion not only provides coverage to the uninsured at little to no cost to them but also reduces out-of-pocket costs for low-income people who are underinsured on private plans. Numerous studies have found that Medicaid expansion improves access to care and care utilization. While disparities persist, Medicaid expansion has narrowed gaps between white people and Latinx and Black people in health insurance coverage rates as well as for cancer treatment and maternal mortality.

Before the pandemic, states that had expanded Medicaid had lower rates of uninsured residents (8 percent) on average compared with nonexpansion states (11 percent). The pandemic has pushed the uninsured rate higher as people lose job-based coverage and suffer from the pandemic’s economic damage. Enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) has surged during the pandemic in nearly every state. The Centers for Medicare and Medicaid Services reports that Medicaid enrollment nationwide increased by 4.9 million—a 7.6 percent rise—between February and July 2020. Yet, between the spring and July 2020, the number of uninsured adults also increased—by 1.9 million, according to the Urban Institute.

Two overlapping health problems: Uninsurance and COVID-19

Residents of nonexpansion states are more likely to not only lack insurance but also to have become infected with or died from COVID-19. To understand the intersection between health coverage and COVID-19, CAP analyzed county- and state-level demographic and health coverage data from the 2014–2018 American Community Survey from the U.S. Census Bureau and COVID-19 data from the New York Times. The Times data set includes the 2,957 counties that reported case and mortality data to their respective state public health agencies. For this analysis, the 36 states that had adopted the ACA’s Medicaid expansion as of May 2020 are considered expansion states.

Our analysis of COVID-19 data as of October 24, 2020, indicates that states that did not expand Medicaid had 42 percent more cases per capita (3,286 cases per 100,000 residents) and about 11 percent fewer deaths per capita (53 deaths per 100,000 residents) compared with expansion states, which had 2,316 cases and 59 deaths per 100,000 residents. More recently, nonexpansion states reported an average of 246 new cases per 100,000 residents daily over the week ending October 24, compared with 172 daily new cases per 100,000 residents in expansion states over the same period.

Counties that had high rates of uninsurance have fared poorly in the pandemic. After splitting counties into quartiles based on their rate of uninsurance, the authors find that counties with high rates of uninsured residents in nonexpansion states had the highest cumulative death rates (60 per 100,000 residents) from COVID-19, compared with 39 deaths per 100,000 residents in other counties in the same states. The authors’ analysis of census data also shows that residents of counties with high uninsured rates also differed from the average across all U.S. counties in other ways as well. Prior to the pandemic, they had lower average median household incomes ($45,802 versus $51,465); had slightly higher unemployment rates (2.9 percent versus 2.6 percent); and were more likely to be Black (13.8 percent versus 9.4 percent). Systemic and historical inequalities have relegated many workers of color to lowest-paying jobs, and Black and Latinx workers are less likely to have job-based health coverage.

In majority-Black counties, cases per capita (4,611 per 100,000 residents) were more than 75 percent higher, and deaths per capita (147 per 100,000 residents) were more than triple the average among all counties, which had 2,607 cases and 53 deaths per 100,000 residents. States that expanded Medicaid had 22 percent fewer deaths per capita in their majority-Black counties than majority-Black counties of nonexpansion states. This is consistent with other analyses about how Black Americans are more likely to die from COVID-19 and with Centers for Disease Control and Prevention data showing that COVID-19 cases, hospitalizations, and deaths are more than twice as common among Black Americans than they are among white Americans.

Conclusion

The pandemic and economic recession make it more important than ever for states to expand Medicaid. This past summer, voters in Oklahoma and Missouri approved ballot measures to implement Medicaid expansion in their states. By broadening Medicaid eligibility, states can access greater federal resources to boost health care access and improve residents’ financial security. Governors and state legislators should prioritize Medicaid expansion to help their low-income residents during the pandemic and beyond.

Tarun Ramesh is a former intern for the Health Policy team at the Center for American Progress. Emily Gee is the health economist for Health Policy at the Center. Maura Calsyn is managing director for Health Policy at the Center.