Democrats eye new federal coverage program in states declining Medicaid expansion

We’ve known for a little while that Democrats hoped to cover people in the 12 states that have declined to expand Medicaid in the coming reconciliation bill. But how exactly are they going to do that? We got some new details.

The likely plan is to first subsidize the coverage gap population to get private insurance on the Affordable Care Act marketplaces, until sometime around 2025 or 2026, which would give time to set up the new system, aides and advocates say.

Then, a new federal coverage program would kick in to provide health insurance to the coverage gap population in the 12 states that have not expanded Medicaid already.

Industry might not be too happy: The creation of a new federal health insurance program could be controversial and has drawn pushback from some in the health care industry, given that it could be a stepping stone to a larger, government-run “public option.”

“We have significant concerns with any proposal that would establish a new Federal Medicaid look-alike program to fill the coverage gap,” the Federation of American Hospitals wrote to Congress this month. “The formation and implementation of a new federal program or a Medicaid public option would be complex and costly, burdened by bureaucracy and rulemaking that would unnecessarily delay access to care for millions.”