Fighting the Institutionalization of Racism in Medicaid

In the dystopian backdrop of a pandemic that is disproportionately affecting people of color and the continued murders of unarmed Black Americans by police, states are taking advantage of the flexibilities offered by the Centers for Medicare & Medicaid Services (CMS) to exacerbate structural inequities and fundamentally chip away at Medicaid, a vital safety net program that provides access to health care to more than 65 million people. Federal law has at times been used as a tool to work against the forces of racism—a major example being the forced integration of hospitals when Medicare was created in 1965. However, as federal control over safety net programs has been ceded to states, some states have used that authority to clamp down on benefits, fueled by a subversive racism that keeps Black Americans disproportionately in economic precarity.

Historically, Medicaid and other safety net programs have been targets for reform, with would-be reformers using racist stereotypes, such as the term “welfare queen,” which was coined in the 1970s. Jamila Michener, who studies the intersection of race and public policy, has said, “Racism is deeply rooted in the past and present of the American health care system.”¹ She further notes that racial dynamics have played a role in critical state health policy decisions, chief among them being the decision to reject Medicaid expansion under the Affordable Care Act.¹ This is borne out in the demographics of those who were likely to benefit from the Medicaid expansion. The percentage of likely eligible Black residents was 10 points higher in states that chose not to expand their Medicaid programs than in states that did.² This left them disproportionately more likely than Whites to end up in the coverage gap where they do not qualify for Medicaid or Marketplace subsidies.

Earlier this year, CMS released a letter to state Medicaid directors informing them of a new initiative that allows them to convert Medicaid programs from the current state–federal partnership model to a block grant.³ Today any eligible person can enroll and the state and federal government will cover the cost of caring for them, whereas in a block grant there is a set number of dollars to cover each person or everyone in the program. Legal experts have already noted that this Healthy Adult Opportunities guidance is likely illegal, going beyond the authority that the secretary of Health and Human Services has in granting Medicaid waivers.⁴

Under a block grant system with capped federal funding, people can be locked out of Medicaid even if they are eligible, which could have dire consequences for a program that grows during poorer economic conditions by design. The Families First Coronavirus Response Act has maintenance of effort requirements that currently prevent states from dropping Medicaid enrollees in exchange for enhanced match rates; however, that will disappear as the pandemic subsides. Healthy Adult Opportunities could have devastating consequences for lower-income families, who may be unable to pay “up to 5% of their household income” to cover out-of-pocket costs or will be punished by suspension from Medicaid for failing to pay any required premiums. States will also be able to adjust benefits, cost sharing, and other requirements to stay within budget without additional CMS approval. Because of the large and persistent structural inequities faced by Black Americans and other people of color on a daily basis, this could have a particularly devastating effect on their health.^5,6

The Healthy Adult Opportunities guidance expands barriers to accessing Medicaid that were promoted in recent years by the White House and CMS, for example, the implementation of work requirements. Even though White Americans make up the majority of Medicaid enrollees in numbers, Black and Latinx Americans are overrepresented in the program because of historic structural inequities. Black Americans make up 20% of Medicaid enrollment but are only 13% of the US population and Latinx Americans make up 30% of Medicaid enrollment and are only 18% of the population. Work requirements target a Medicaid population that overwhelmingly already works or has qualifying exemptions (e.g., disabled, caretaker, student), creating a disparate impact on Black populations who already face discriminatory hiring processes and disproportionately suffer from unemployment. States have already attempted to implement these work requirements in discriminatory ways, with Michigan being a notable and perhaps infamous example: the state legislature in 2018 tried to design their work requirements in a way that suspiciously excluded predominantly White communities.

A core part of the Medicaid benefit package that rarely gets attention is retroactive eligibility, which provides coverage for eligible medical expenses incurred up to three months before application if the patient would have been eligible for Medicaid at the time. In the past few years, states have increasingly targeted this benefit as a place to cut spending through state Medicaid waivers approved by the Health and Human Services secretaries Thomas Price and Alex Azar. This is often done in combination with other policies aimed at cutting enrollment or benefits, with very little understanding or evidence of the effect that this may have on health and wealth disparities.

Three states (Arizona, Florida, and Iowa) already have restrictions on retroactive eligibility in place, and two more (Georgia and Nebraska) have waivers pending that restrict or eliminate retroactive eligibility. An additional four (Arkansas, Indiana, Kentucky, and New Hampshire) had waivers restricting or eliminating retroactive eligibility that were approved but were stayed in the courts or the states chose to halt implementation, usually related to the work requirements contained in them. This is a big issue for people who are uninsured and are transitioning into Medicaid because they would now be responsible for their full costs of care until they are enrolled. This is particularly onerous during a pandemic, when both unemployment and significant health care needs may happen at the same time. This is another area of Medicaid policy where changes could disproportionately burden Black families, who tend to be poorer and uninsured; it can leave them vulnerable to incurring high medical bills and debt in the period before successfully enrolling in Medicaid.

Since the release of the Institute of Medicine (now known as the National Academies of Medicine) landmark report Unequal Treatment (https://bit.ly/34K3nnM), we have seen overwhelming evidence of the numerous ways that bias, racialized policies, and everyday racism negatively affect the health of Black Americans. There is a clear need to fight the institutionalization of functionally racist policies in Medicaid. The White House and CMS have enabled and encouraged states to pursue policies that will hurt Americans who find themselves on the margins, particularly Black Americans who have suffered generations of structural racism. Whether you choose to believe that these policies were designed to be racist or not, the end result is the same. Functional racism is still racism. The social safety net should be a mechanism to help reverse institutional racism and health disparities, not exacerbate them.

Racism is itself a public health crisis. Our failure to name it and treat it as one has perpetuated health inequities among racial and ethnic minorities for many generations.⁷ We are now faced with a unique opportunity to look internally as a field and country, to actively recognize and dismantle hundreds of years of dogma and discriminatory policies that have adversely affected the health and well-being of Black communities, starting with emerging threats to Medicaid.