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Health care in America has entered a new phase

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The Supreme Court's recent ruling on the Affordable Care Act (ACA) further solidified the landmark health care legislation known as Obamacare while the nation attempts to emerge from the coronavirus pandemic with a uniquely expensive health care system.

The 7-2 ruling enables "those who want to build on the ACA to look forward and assume the law will largely remain intact," Rachel Garfield, vice president at the Kaiser Family Foundation, told Yahoo Finance. "Health policy is always evolving, and it’s not 100% certain that there will never be another challenge to the ACA. But with tens of millions covered through ACA pathways, it will be much harder to undo the law over time."

The Supreme Court ruling comes amid a boom in Medicaid — a federal- and state-funded public health insurance program for low-income, pregnant, disabled, and other Americans and qualifying citizens — and an influx of funding for health care in the coronavirus stimulus bill passed in March.

Taken together, the focus is now on how health care in America will further evolve under President Biden.

NEW YORK, NEW YORK - APRIL 28: A medical worker stands outside NYU Langone Health hospital as people applaud to show their gratitude to medical staff and essential workers on the front lines of the coronavirus pandemic on April 28, 2020 in New York City. COVID-19 has spread to most countries around the world, claiming over 217,000 lives with over 3.1 million infections reported. (Photo by Noam Galai/Getty Images)
A medical worker stands outside NYU Langone Health hospital as people applaud to show their gratitude to medical staff and essential workers on the front lines of the coronavirus pandemic on April 28, 2020 in New York City. (Photo by Noam Galai/Getty Images)

'Medicaid functioning as the safety net it was designed to be'

Medicaid has been around since 1965 and was dramatically expanded under the ACA to increase eligibility for low-income Americans.

The program became a lifeline for millions of Americans after the coronavirus pandemic led to massive job losses in the U.S., which led to widespread loss of employer-sponsored health coverage.

"[The boom] is Medicaid functioning as the safety net it was designed to be," Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities, told Yahoo Finance. "For people experiencing a sudden job loss or decrease in income during the recession and others who were previously unenrolled feeling an increased need for health coverage during the pandemic, Medicaid was there for them."

Some Americans were able to obtain health insurance through an ACA special enrollment period, which involves the marketplaces opening up to people who experience a “qualifying event” such as the loss of a job. (President Biden also opened a special enrollment period earlier this year through executive order.)  

For those who were unable to afford even ACA premiums, that leaves them with Medicaid. To qualify for Medicaid, a person must make up to 138% of the federal poverty level — which is currently $17,774 for a single individual.

And according to a new report from the Centers for Medicare & Medicaid Services (CMS), nearly 9.9 million people signed up for Medicaid between February 2020 and January 2021, a 13.9% increase.

Medicaid enrollment increased substantially through 2020. (Chart: CMS)
Medicaid enrollment increased substantially through 2020. (Chart: CMS)

As of January 2021, more than 80.5 million people were enrolled in Medicaid and the related Child’s Health Insurance Program (CHIP).

“The latest Medicaid enrollment report illustrates what crucial lifelines Medicaid and CHIP are to the millions of Americans who rely on these programs," CMS Administrator Chiquita Brooks-LaSure told Yahoo Finance in a statement. "Together with CHIP, Medicaid is the largest source of health care in this country. Combined, these programs are providing health coverage to over 80 million Americans, including children, pregnant women, parents, seniors, and individuals with disabilities."

'Medicaid expansion is really still very ideological'

The Medicaid expansion has not reached all states. 

In 2012, the Supreme Court ruled that the ACA's expansion of Medicaid across the U.S., was “unduly coercive” and left it up to the states to decide if they wanted to adopt Medicaid.

A study from the Journal of the American Medical Association (JAMA) found that Medicaid enrollment increased substantially in expansion states between January 2019 and September 2020.

"We sure hope to see the remaining 12 states recognize the lifesaving benefits of Medicaid expansion as well as the significant budget savings," Wagner said. "However, in light of ongoing resistance in many states, we are eager to see the administration pursue other options to address the coverage gap to reduce racial disparities and ensure that low-income families in need of health insurance are able to access Medicaid."

Medicaid enrollment was higher in expansion states. (Chart: JAMA)
Medicaid enrollment was higher in expansion states. (Chart: JAMA)

CMS Administrator Brooks-LaSure credited the American Rescue Plan stimulus legislation passed in March 2021 with bolstering Medicaid.

"Thanks to the American Rescue Plan, there is unprecedented financial assistance available to states to ensure those who need coverage have it," she stated. "CMS looks forward to collaborating with all states on solutions that strengthen the Medicaid program.

However, the recent surge in funding may only help in the short term.

“It could help them in the short term to maybe convince some of them to move forward a little more quickly," Bipartisan Policy Center Health Policy Director Katherine Hayes told Yahoo Finance. "But I think there are some states for which Medicaid expansion is really still very ideological and political and very much off the table would be the best way to put this."

Many Republican politicians are fully opposed to Medicaid or have called for restricting eligibility and imposing work requirements on recipients (despite the fact that most applicants are children, disabled adults, or elderly.)

“It’s going to be harder to make the argument that this is a real boon to the states and that states should move forward when they’re debating at the state level," Hayes said.

WILMINGTON, DE - OCTOBER 28: Democratic presidential nominee Joe Biden delivers remarks about the Affordable Care Act and COVID-19 after attending a virtual coronavirus briefing with medical experts at The Queen theater on October 28, 2020 in Wilmington, Delaware. Participants in the briefing include former U.S. Surgeon General Dr. Vivek Murthy, Director for Science in the Public Interest Dr. David Kessler, New York University professor Dr. Celine Grounder, and Yale University professor of medicine Dr. Marcella Nunez-Smith. (Photo by Drew Angerer/Getty Images)
Then-Democratic presidential nominee Joe Biden delivers remarks about the Affordable Care Act and COVID-19 after attending a virtual coronavirus briefing with medical experts at The Queen theater on October 28, 2020 in Wilmington, Delaware. (Photo by Drew Angerer/Getty Images)

The lack of Medicaid availability in some states created a "coverage gap" that affects roughly 2.2 million people who are not eligible for premium tax credits under the ACA or Medicaid

"I think a more realistic approach would be to look at some sort of federal fallback program that would allow expansion populations to enroll in exchange coverage, perhaps with some form of enhanced benefit package," Garfield said. "It would have to be done through reconciliation, however, and there are a lot of competing priorities, so the cost of the expansion could be a barrier."

Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at adriana@yahoofinance.com.

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