How Does The Omnibus Spending Bill Impact Medicaid?

Congress avoided a shutdown on Friday just before the Christmas weekend with a massive new spending bill. However, the piece of legislation fails to address some of those relying on Medicaid coverage, who may lose their plan in the near future.

Key takeaways:
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    New omnibus spending bill fails to help Americans losing Medicaid coverage due to expiring Public Health Emergency.
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    Medicaid directors believe the new bill will help ease the pressure on the Medicaid system.
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    Bill increases spending for CDC, NIH, the fight against HIV, and nutritious food options for Americans.

On Friday afternoon, the U.S. House of Representatives passed the $1.66 trillion for the new fiscal year ending in September. The bill featured increased military spending and nearly $45 billion for Ukraine’s efforts in the war against Russia.

President Joe Biden praised the bipartisan piece of legislation in a Friday statement following its passage in both chambers

“This bill is further proof that Republicans and Democrats can come together to deliver for the American people, and I’m looking forward to continued bipartisan progress in the year ahead,” Biden said.

The downside to the bill is that it fails to address the needs of Americans who enrolled on Medicaid during the COVID-19 pandemic.

In April 2022, the unemployment rate skied to around 15%. Americans who were on private insurance plans were seeking alternate options such as Medicaid. The Families First Coronavirus Response Act (FFCRA) prohibited states from disenrolling Medicaid recipients during the Public Health Emergency (PHE) to ensure continuous coverage throughout the COVID-19 pandemic.

Since states have not been able to remove individuals from Medicaid, the amount of Americans on the insurance has increased to nearly 90 million — over 20% of the population.

Currently, the PHE is set to expire on January 15, 2023, unless the order is renewed. Once the PHE expires, continuous coverage for those enrolled in Medicaid will end. This brings a big deal of concern for many Americans who have relied on Medicaid coverage and don’t know if they fit the new criteria.

When the PHE concludes, states have 12 months to determine if the Medicaid recipient's care is able to continue. States are likely going to be removing recipients sooner rather than later, as federal funding for Medicaid is due to slow with the PHE ending next month. Many Americans on Medicaid could be looking for new insurance plans in April of next year.

Although some Americans may lose Medicaid with the PHE’s expiration, the National Association of Medicaid (NAMD) believes the new omnibus spending bill is right for Medicaid as a whole. The NAMD is a bipartisan, and non-profit organization representing Medicaid leaders across the U.S.

Allison Taylor, NAMD Board President and Indiana Medicaid Director, praised the nearly $1.7 trillion deal in a press release on Tuesday. Although many Americans’ Medicaid coverage may be redetermined, Taylor believes this bill is a step in the right direction for the future.

“While we anticipate Medicaid coverage losses as the redetermination process unfolds, the certainty provided by Congress gives us all greater opportunities to limit unwarranted coverage loss and make sure coverage transitions to the Marketplace, Medicare, or employer-sponsored insurance are successful,” Taylor said.

For those who are disenrolled from Medicaid, that does not necessarily mean they are ineligible. Many Americans who are disenrolled and unable to obtain Medicaid will be able to seek coverage from the Affordable Care Act marketplaces.

Omnibus spending impacting health care

Sen. Patrick Leahy (D-VT) released the plans for the omnibus bill on Monday. Of the $1.7 trillion, the bill features $772.5 billion for non-defense discretionary programs and $858 billion in national defense. The bill also features billions of dollars in health care funding, access, and research.

Key domestic health funding:

  • $47.5 billion for the National Institutes of Health (NIH)
  • $9.2 billion for the Centers for Disease Control and Prevention (CDC)
  • $3.3 billion for the Assistant Secretary for Preparedness and Response (ASPR)
  • $613 million for the fourth year of the domestic HIV/AIDS elimination initiative

The bill also includes nearly $20 billion for child care by increasing funds to the Child Care and Development Block Grant and Head Start program. Also, over $2 billion will be spent on bettering Americans' mental health.

The omnibus bill is attacking the ongoing opioid crisis, spending nearly $5 billion to address the ongoing crisis in the U.S. Another priority of the bill was to help Americans continue to eat nutritious foods despite the impact of inflation. Over $175 billion was spent to help Americans increase their access to healthy foods.

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