New Dem legislation aims to close Medicaid coverage gap in expansion holdout states

Congress at night
Democrats aren't waiting for Medicaid expansion holdout states to get on board, opting instead to create a new coverage program for eligible residents. (Getty Images)

A new bill aims to create a program like Medicaid to offer coverage to eligible residents in states that have not expanded Medicaid under the Affordable Care Act.

The legislation introduced late Monday by a trio of Democratic Senators is the latest bid by Democrats to extend coverage to residents in the 12 states that have not expanded Medicaid under the law.

“For too long leaders in Georgia and the other non-expansion states have put politics over people, refusing to strengthen public health by expanding Medicaid even after myself and others helped secure billions of additional dollars in the American Rescue Plan for states to do just that,” said Sen. Raphael Warnock, D-Ga., one of the lead sponsors of the Medicaid Saves Lives Act.

Sens. Jon Ossoff, D-Ga., and Tammy Baldwin, D-Wis., are the other sponsors.

The legislation calls for the Centers for Medicare & Medicaid Services to create a program that looks like Medicaid that provides the same benefits.

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It enables anyone in a non-expansion state eligible for Medicaid coverage and not enrolled on the ACA’s exchanges to sign up for the program. The legislation also adds more federal incentives for holdout states to sign up for the expansion.

The American Rescue Plan Act included a five percent boost to the federal matching rate for states that decided to expand Medicaid but so far it has not swayed any holdouts. The new legislation would give another boost to the federal matching funds.

If the legislation were enacted, it would extend health coverage to 4.4 million Americans that are in the Medicaid coverage gap.

Convincing holdout states to expand Medicaid has been a major priority for the Biden administration.

Biden’s budget request to Congress called for the creation of a similar program that offered coverage to residents in the Medicaid coverage gap and boosted financial incentives for states to expand Medicaid.

However, the Senate legislation would have a tough time garnering enough Republican votes to bypass a legislative filibuster.

The Senate is currently working on a massive infrastructure package that could pass the chamber via reconciliation, a procedural move that allows budget bills to pass via a simple majority vote. The text of what is in the package has not been released though and it remains unclear if the bill would be included.

House Speaker Nancy Pelosi has said that she expects to get more details this week from the Senate on the package.