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BLOG — Solving the Coverage Puzzle: Medicaid Stabilization Fund

by Tricia Barrentine Guay

More than 262 million Americans access medical care through a private health plan, either provided by an employer or through Exchanges, Medicaid and Medicare Advantage run by carriers. The Alliance of Community Health Plans (ACHP) has proposed several novel approaches to ensuring access to care, maintaining continuity of coverage and stabilizing the health insurance market in the face of this unprecedented public health emergency. Ensuring the states most impacted by COVID-19 are prioritized for support to care for the most vulnerable is one piece of the puzzle.

A Medicaid Stabilization Fund to Protect the Most Vulnerable

Due to the economic impact of the ongoing pandemic, Medicaid programs across the country are experiencing increased enrollment and spending. Each state’s Medicaid program will be impacted differently depending on the severity of COVID-19 and the economic toll of the pandemic. To protect our most vulnerable neighbors, the ACHP urges Congress to create a “Medicaid Stabilization Fund” to provide additional support based on the severity of the human and economic toll of COVID-19 in the state. This would be a one-time fund appropriated by Congress and distributed to states based on impact of COVID-19. Additionally, Congress could decide how the money is distributed or it could direct the Secretary of HHS to develop distribution guidelines based on parameters included in the statute.

Recent reports show that many state budgets are suffering greatly from the ongoing pandemic. The brunt of the impact will be felt in Medicaid programs, which serve the poorest children, adults and seniors and those with disabilities. Historic unemployment of 14.7 percent with a loss of over 30 million jobs in just 7 weeks has resulted in forecasted Medicaid growth of at least 11 million with some states being impacted more than others. Experts predict an additional 5 million new Medicaid enrollees for reasons other than the loss of employment. A Medicaid Stabilization Fund is an equitable solution to provide an important lifeline to states serving residents experiencing the worst effects of this public health emergency.

To maintain health coverage and access for the most vulnerable Americans including millions who recently lost a job, Congress should create a Medicaid Stabilization Fund to distribute aid to the states hardest hit by COVID-19.