HEALTH CARE BRIEFING: Senate Plan Could Toss Medicaid Incentive

Bloomberg Government subscribers get the stories like this first. Act now and gain unlimited access to everything you need to know. Learn more.

Democrats are mulling whether to rescind billions of dollars meant to encourage states to expand their Medicaid programs, in part to pay for a federal Medicaid-like coverage plan in those states.

The debate about whether to rescind the funds divides some Senate and House Democrats. House aides say the incentive money, which Congress provided in March, should remain available rather than be used to offset part of Democrats’ sweeping spending and tax package. They argue the new legislation’s federal fallback program for non-expansion states isn’t meant to replace state-run Medicaid programs.

Senate supporters of adding new Medicaid coverage in such Republican-led states say their state legislatures and governors have shown no amount of money will persuade them to open up eligibility for their public health insurance programs. “It’s clear to me that their reasons for not expanding are political, shamelessly and utterly political,” Sen. Raphael Warnock (D-Ga.) said.

Warnock was among the lead supporters of a provision in a $1.9 trillion Covid-19 relief measure (Public Law 117-2) to increase the federal government’s share of Medicaid costs in states that newly expand their public health insurance. Under the Affordable Care Act, states can expand eligibility to adults earning up to 138% of the poverty level, with the government paying 90% or more of the costs. None of the 12 states that have so far declined to expand Medicaid have accepted this offer of more federal funds.

The ACA was originally designed to make this Medicaid expansion mandatory, so it doesn’t include insurance subsidies for people below the poverty line, about $17,000 per year for a single adult. The median income limit for families to be eligible for Medicaid in the 12 holdout states is 41% of the poverty line—or an annual income of $8,905 for a family of three in 2020, according to a report by the Kaiser Family Foundation. That leaves many families, and individuals, stuck in a coverage gap.

To close the gap, Democrats have proposed as part of their domestic social spending package permitting the federal government to create a Medicaid-like program in non-expansion states starting in 2025 and offering no-cost Obamacare plans to those people from 2022 to 2024.

Two top Democratic aides, one from each chamber, said Democrats are exploring sunsetting or repealing the Medicaid incentive funds to pay for part of the social spending package. The White House has vowed to pay for all the spending in that package, the House aide noted, and has sought a list of options to do so. Read more from Alex Ruoff.

Also on Lawmakers’ Radars

Telehealth: The Senate Commerce, Science and Transportation Subcommittee on Communications, Media, and Broadband holds a hearing on telehealth.

ARPA-H Faces Hurdles Without Spending Plans: President Joe Biden‘s plan to set up an NIH incubator for biomedical discoveries could face setbacks as the government runs on a continuing resolution through early December. But the government is still moving forward with plans to open the Advanced Research Projects Agency for Health in the coming months, according to the White House’s point-person on the project. Biden unveiled the ARPA-H plan this spring as part of a fiscal 2022 budget request.

“We’re continuing our planning and engagement efforts that we’ve been launching. We’ll continue to do so, and we’re optimistic, obviously, about getting something in [fiscal year] ’22,” Tara Schwetz, assistant director for biomedical science at the White House Office of Science and Technology Policy, said in an interview. But the continuing resolution that averted a government shutdown and funds the government through Dec. 3 doesn’t allow agencies to launch new programs. Jeannie Baumann has more.

Tuberville Seeks Answers on Unaccompanied Children: Sen. Tommy Tuberville (R-Ala.) is seeking answers from the Health and Human Services Department on the agency’s care of unaccompanied migrant children, Ellen M. Gilmer reports. He cited a Bloomberg Law story about a federal probe into potential labor trafficking or exploitation of dozens of minors after their release from HHS care to agriculture processing sites in Alabama and elsewhere.

In a letter to Secretary Xavier Becerra, the senator asked what steps HHS and the Homeland Security Department have taken to find and arrest alleged traffickers. He also requested updates about the Biden administration’s current care and release policies, citing reports of poor conditions of some shelters, sexual assault accusations, and HHS’s record of post-release services. They together “support a broader claim of unsafe and unhealthy living conditions managed by the federal government,” he said.

Letters & Legislation:

The Coronavirus Pandemic

Biden Will Use Illinois Trip to Push Firms on Vaccine Mandates: Biden will escalate his campaign to pressure private employers into imposing Covid-19 vaccination mandates during a visit to a Chicago suburb today. The president will visit an Elk Grove Village construction site for Clayco, a construction company that plans to require vaccinations or weekly testing for its employees, a White House official said. He will also highlight the example of Chicago-based United Airlines, which has said 98.5% of its workforce has complied with an inoculation requirement.

Before the trip, the White House released a report that said 3,500 U.S. organizations already have a vaccine mandate, including 40% of hospitals and 25% of businesses, following Biden’s directive that federal workers and contractors be vaccinated and that the Occupational Safety and Health Administration draft regulations for companies with at least 100 employees. Jennifer Jacobs has more.

Biden Invests $1 Billion for Rapid Covid-19 Tests: The Biden administration announced a $1 billion purchase of rapid at-home coronavirus tests yesterday, an additional investment aimed at widening the availability of such products in the coming months. Along with the authorization of another home self-test product Monday, the $1 billion investment and previous outlays may put the U.S. on track to quadruple rapid tests by December, White House Covid-19 response czar Jeff Zients said.

The latest moves signal an increasing emphasis on testing as the virus continues to make a comeback in the U.S. and vaccination rates falter. Americans are also increasingly turning to rapid tests for everything from schools to public events—and supplies are becoming scarce. The new supplies will add to a $2 billion investment in rapid testing announced by the White House last month that included buys from Abbott and Celltrion, and invokes the Defense Production Act. Emma Court and Josh Wingrove have more.

  • Meanwhile, after complaints to U.S. regulators about false positives from a startup’s at-home Covid-19 test, the Australian company investigated and recalled hundreds of thousands of kits sold through stores and online, the U.S. Food and Drug Administration said. Ellume last week announced a voluntary recall of about 195,000 tests that remained unused. Roughly 427,000 tests contained a component that increased the risk of a false positive, a spokeswoman said, Emma Court reports.

Protection Wanes After Second Shot, More Studies Show: Immunity provided by the Covid-19 vaccine from partners Pfizer and BioNTech weakens significantly within months, with men having less protection than women, according to research that supports the use of boosters. Protective antibodies decreased continuously in the six months after the administration of the second shot of the vaccine, an Israeli study published in the New England Journal of Medicine said, Alisa Odenheimer and Robert Langreth report.

  • Meanwhile, data that could show the safety and effectiveness of mixing and matching boosters of different Covid-19 vaccines are under review by U.S. regulators, presidential adviser Anthony Fauci said. A study of adults who received booster doses of different Covid-19 vaccines than their original shots has been completed, Fauci said in an interview on Bloomberg TV, and he said that data have been given to the Food and Drug Administration. Read more from Fiona Rutherford.

Breakthrough Cases Loom Larger for Addiction Sufferers: Covid-19 breakthrough cases are posing a higher risk to Americans suffering from substance use disorder, due largely to socioeconomic factors and co-occurring health conditions, according to the National Institutes of Health. The NIH’s National Institute on Drug Abuse analyzed the electronic health records of nearly 580,000 vaccinated Americans, finding substance abuse patients were at a far higher risk of breakthrough infections. Ian Lopez has more.

Hospitals Pay $24 Billion More for Staff in Pandemic: Hospitals are paying $24 billion more for labor annually due to pandemic-driven staffing shortages and increased patient demand, draining resources when they’re already feeling the physical and mental toll of the virus. The $24 billion, according to data published yesterday from health-care improvement company Premier, amounts to an 8% increase in clinical labor costs per patient-day compared with 2019. Read more from Allie Reed.

More Headlines:

What Else to Know Today

Texas Abortion Law Put on Hold After Biden’s Legal Challenge: A federal judge temporarily blocked Texas’s new ban on most abortions, arguing the law outsourcing enforcement to bounty-hunting members of the public was “contrived” to work around a constitutional right. The ruling by U.S. District Judge Robert Pitman in Austin is a major early victory for the Biden administration, which sued to overturn the ban. With the injunction in place, the strictest such law in the nation will go on hold during the rest of the case, at least for now.

The law prohibits abortions after about six weeks of pregnancy—before many women know they’re even pregnant—and has no exceptions for rape or incest. While the verdict clears medical professionals to once again offer most abortions, they face risks if Texas ultimately prevails because the law allows suspected violators to be sued retroactively. Pitman wrote that “a person’s right under the Constitution to choose to obtain an abortion prior to fetal viability is well established.”

Texas filed a notice that it will challenge the ruling in the Fifth Circuit Court of Appeals, which leans heavily conservative. The U.S. Supreme Court may have the final say on the injunction and eventually on the law itself. The Justice Department argued the law should be put on hold due to the severe impact it is already having on women, forcing many to drive hundreds or thousands of miles to other states to seek reproductive care—if they have the time and money to do so. Read more from Erik Larson.

Biden Said Closing In on Pick for FDA Commissioner: The Biden administration is closing in on a nominee for commissioner of the Food and Drug Administration, Politico reports, citing four people. The White House believes the pick is uncontroversial, one person told Politico. Names floated for the position include Laurie Glimcher, CEO of the Dana-Farber Cancer Institute, former FDA Deputy Commissioner Joshua Sharfstein, and Biotechnology Innovation Organization head Michelle McMurry-Heath. Read more.

Vape Products May Contain Harmful Chemicals, Study Says: Vaping exposes users to around 2,000 chemicals, including some that are potentially harmful industrial compounds, according to a report of four popular brands by researchers at Johns Hopkins University. Researchers found condensed hydrocarbon-like compounds that are typically associated with cigarettes, despite vape products often being marketed as safer, according to the study in Chemical Research in Toxicology. Read more from Tiffany Kary.

More Headlines:

With assistance from Ellen M. Gilmer and Alex Ruoff

To contact the reporter on this story: Brandon Lee in Washington at

To contact the editors responsible for this story: Zachary Sherwood at; Giuseppe Macri at; Michaela Ross at

Stay informed with more news like this – from the largest team of reporters on Capitol Hill – subscribe to Bloomberg Government today. Learn more.