Cutting Medicaid is unfortunate during any national crisis, but it is even more devastating during a public health crisis. Cutting Medicaid spending during a public health crisis is like turning off the furnace during a blizzard.
While the rapid development of Covid-19 vaccines has been a welcome positive step, vaccine distribution is emerging as yet another budgetary stress for states, one that could hinder effective vaccine uptake. Medicaid is partially funded by the federal government, but it is administered and predominantly financed by the states.
Unlike the federal government, most states are unable to deficit spend by law. As a consequence, short of an infusion of additional funding, many local governments will likely be forced to pay for vaccine distribution infrastructure by cutting other public services. Health care services are often one of the first line items to be cut during economic downturns; in the aftermath of both the 2001 financial slump and the Great Recession, many states restricted Medicaid eligibility, cut benefits, and reduced payment rates for safety-net physicians.
A Vital Lifeline
As physicians, we have borne witness to the devastating scope of the pandemic’s direct and indirect effects. Medicaid serves as a vital lifeline for many of our patients hailing from lower income and minority backgrounds, who have suffered disproportionately over the past nine months. In our clinics and Emergency Departments, Medicaid coverage is vital now more than ever, not only to ensure timely and affordable access to Covid-related testing, vaccination, and treatment, but also to attend to the myriad of vital health care services that have been sidelined in the midst of this crisis. Facing a second, “hidden epidemic” of delayed health care services, ranging from deferred surgeries to undetected cancers to deteriorated chronic conditions, we fear that cuts to Medicaid now would impose an unbearable additional strain on our patients’ ability to access care.
Congress has provided some additional funding to ease the burden on states, but not enough. Last March, Congress temporarily increased the share of state Medicaid costs paid for by the federal government, known as the Federal Medical Assistance Percentage, by 6.2 percent. This increase offers approximately $40 billion in supplemental federal funding per year to states as fiscal relief for rising Medicaid costs. Importantly, in order to receive these additional federal funds, states were prohibited from cutting enrollment, restricting Medicaid eligibility requirements, or increasing the amount of documentation required to receive coverage.
Despite this additional support, states continue to struggle financially, and many are going ahead with plans to curtail Medicaid benefits and rates as well as reduce the number of staff available to process eligibility paperwork for new enrollees. This will reduce the number of safety-net providers available to provide care and lead to application backlogs, reducing the number of eligible individuals who receive Medicaid benefits.
Furthermore, while the federal government has spent $12 billion over the course of 2020 to catalyze private pharmaceutical development of Covid-19 vaccines in record time, until the late December stimulus, the CDC had offered only 3 percent of that amount to help states navigate the logistical gymnastics of delivering an approved vaccine to more than 300 million Americans. The distribution process involves funding public education campaigns, hiring and training vaccine handlers, managing refrigerated supply chains, tracking patients’ time between the two required vaccine doses, and ensuring that every vaccine administration site is safe and doesn’t contribute to the further spread of Covid-19. It comes as no surprise then that most states are falling behind in their vaccination schedules already.
Complicating the situation further is a federal mandate to cover the cost of the vaccine for all beneficiaries. As a result, state Medicaid programs will be left struggling to provide the vaccine and other health services to a large influx of recently unemployed and vulnerable individuals. Although federal officials have created a Provider Relief Fund that’s supposed to cover the vaccine for those without insurance, the fund is quickly emptying and has fallen flat in covering Covid-19 costs for the uninsured over the last eight months.
Not a Bailout
The first wave of Covid-19 cases last year disproportionately affected low-income, minority Americans, and those living in poverty were more likely to require intensive care. Many of these Americans were those working on the front lines in construction, retail, food service, and public works. We now risk hampering these same individuals — those at the highest risk of contracting and suffering from the virus—from receiving a potentially life-saving vaccine.
The timeline for our nation’s economic recovery is directly tied to how efficiently states can vaccinate the population and open up local businesses. That’s why providing additional funds now to the states is not a “bailout” — it’s a critical means of accelerating the end of the pandemic. This virus does not respect state boundaries; an outbreak anywhere risks slowing down our recovery everywhere.
Last year’s surge of Covid-19 cases forced painful trade-offs within our hospital walls: closures of preventive and primary care, delays of cancer surgeries, and, in the intensive care unit, ethical dilemmas of allocating too few lifesaving measures to the many more who needed them. As we turn a corner, with the rollout of multiple vaccines, we need to boost Medicaid to make sure that all segments of society have access to them—or we all will be forced to suffer longer than necessary.