We all lose if Republicans do not join Democrats in safeguarding our healthcare. The Big Beautiful Bill’s severe cuts to Medicaid and expiration of ACA subsidies would shake the entire healthcare system, even bleeding into private insurance. Dr. Avenel Joseph, Vice President for Policy at the Robert Wood Johnson Foundation, joins Jen to expound everything at stake for our healthcare system.
Aside from the personal, financial, and health ramifications, Dr. Joseph also details how the economy would be significantly impacted by these cuts. Tune into this insightful discussion to receive a digestible explanation of the topic at the center of the government shutdown.
Dr. Avenel Joseph is the Vice President for Policy at the Robert Wood Johnson Foundation. She served for over 10 years in the House of Representatives and the Senate shaping public policy for congressional members. Joseph has worked on Capitol Hill since 2009. She received her PhD in Cell and Molecular Biology at Emory University;
Transcript has been slightly edited for clarity.
Jen Rubin: Hi, this is Jen Rubin, Editor-in-Chief of The Contrarian. I am delighted to welcome Dr. Avenel Joseph, who is the Vice President of Policy at the Robert Wood Johnson Foundation. Welcome, Doctor!
Avenel Joseph: Thank you for having me, Jen.
Jen Rubin: Oh, it’s my pleasure. We are in an odd posture, having made a great deal of progress over the last 5 to 7 years in terms of getting Americans covered by health insurance. Talk to us a little bit, as we now look at the prospect of undoing that, the progress that was made, with Medicaid expansion and with the availability of subsidized Obamacare in covering more Americans. What are the numbers of people that were brought into medical coverage.
Avenel Joseph: So, first we’ll start with Medicaid. Medicaid is the country’s largest insurance program. It covers about 72 million Americans, and is the primary payer for births. For nursing homes and for the disabled. So it’s an incredibly important program. The Affordable Care Act, expanded on that program. It provided more, essentially, more federal resources to states to implement Medicaid to get people covered. It also, as a result of Supreme Court decisions left it optional to states as to how much a person needed to, make, what their income had to be, what their income cutoff was in order to get covered under the Medicaid program. All but 10 states expanded Medicaid, meaning that they, allowed for, and it varies from state to state, but they allowed for, there to be working families who just still don’t make enough to afford to pay on the private market. to be covered by the Medicaid program, which is, again, a state-federal partnership. The changes that have been made in the HR1 and the reconciliation bill will put a bunch of changes into place in terms of that federal-state partnership. It will reduce the amount of money that states are getting from the federal government. Which will, result in tens of millions of people losing Medicaid coverage, because instead of, the federal government giving, for example, a dollar for every $2 that the state puts into the program, the federal government might only give them 25 cents. And, the states who have to balance their budgets can’t possibly take on all of that additional financial responsibility. Without making some significant cuts to the program or to other services that are provided by the state. So, those are some changes that are happening just in the Medicaid program. And we’re expecting, again, that there will be tens of millions of people, I’m forgetting the exact estimate, I think it was around 40 million people, who will lose Medicaid as a result of those HR1 changes. Now…
Jen Rubin: Before we get to the… yeah, before we get to the second part, which is on the Obamacare subsidies, who are the types of people who are going to be losing coverage, and what are… what are the ramifications in terms of rural populations, I think it’s fair to say that rural hospitals and people who live in states that are, frankly, represented by Republicans may be especially hard hit. Is that…accurate?
Avenel Joseph: That’s very accurate. So, Medicaid ends up serving somewhere between… somewhere around 1 in every 8 people, in… in the United States. And like I had mentioned. It, largely covers people who are below, various poverty standards. So these are ready people who are struggling to make, to meet their needs, their basic needs, like housing and food and utilities. The Medicaid program helps to ensure that they’re able to get preventative care and health care when they need it. Even if you are not a person who is directly a beneficiary of Medicaid. Medicaid is what allows hospitals to keep their doors open, because instead of a person presenting in the emergency room when their condition has already accelerated to become very costly to take care of and potentially cause a very lengthy stay, patients who have Medicaid are able to seek preventative care. They’re able to, they’re able to get a treatment when they need it. Additionally, instead of hospitals covering uncompensated costs, meaning covering people who have no health insurance at all, because hospitals have to treat anybody who walks into their doors. They’re able to get reimbursed by Medicaid. So when you don’t have Medicaid coverage as robust as it is right now, it impacts hospitals that rely on Medicaid. So these include hospitals that have large, large maternity wards. These include rural hospitals, it includes a lot of urban hospitals that see Medicaid patients.When those, when those dollars from Medicaid go away, it constrains, services that those hospitals will be able to provide. In many cases, it’s going to mean that those hospitals are going to close. There have been various studies to see which hospitals are most dependent on Medicaid dollars. Lots of them do end up being in very rural areas and in areas that are primarily considered red on the political map. I think practically what that means is when those hospitals close, instead of, you know, going 10 miles when you’re living in a rural area to your closest hospital. You now might need to travel 50 miles to get to, to a hospital when you need it, to get to a hospital if you’re in, in the midst of giving birth. This can… this is just sort of untenable for people, and will impact their ability to access healthcare, will certainly cause, unintended, deaths and other morbidity. So in addition to the sort of the very, like, the hospital-specific, implications of loss of Medicaid. You also have providers who will end up closing their doors, again, because they’re not being able to get reimbursed for their services. And then, because the whole system is as broken as it is in the United States, those costs end up getting deferred to people who can afford to pay anything for health insurance. So the cost of seeing a doctor will go up, the cost of premiums will go up, the cost of deductibles and co-pays will go up, all to try to insulate the payment system from the loss of coverage from these individuals as a result of Medicaid cuts.
Jen Rubin: So that means if you have coverage through Obamacare, if you have coverage through your employer, all of those people are affected, because you’re zapping out a trillion dollars of money from the healthcare system that supports us all. Absolutely. So, let’s now talk about the Obamacare subsidies, that were increased during COVID by President, Biden. Who are those helping, and what happens if those expire at the end of the year?
Avenel Joseph: Okay. So, so you already are having, as we just discussed, all of these impacts that are going to happen even to those who can afford to pay in the private market for insurance as a result of the Medicaid cuts. On top of that. There was… the Inflation Reduction Act, as you mentioned, enhanced what’s called, the premium tax credits on the… on the ACA marketplaces. So what this is, is that…people… there are, laws, regulations in place that say if you make under a certain amount of money, it varies from state to state, but typically it’s somewhere around the median income, which is around $80,000, median across the country. You, can’t pay but so much of a percentage of your income towards health insurance. Because we don’t want you to go broke.
Jen Rubin: It’s just paying for health insurance.
Avenel Joseph: So the subsidies basically say, if health insurance is gonna cost you more than that percentage of your income, we’re gonna give you the difference in a federal tax credit. So, it lowers the financial responsibility and liability for people who are purchasing private insurance on the market. The Inflation Reduction Act in 2021 enhanced those tax credits. And as a result of those, enhanced tax credits. The marketplace enrollment, so people who were purchasing their health insurance through the federal marketplace, doubled. Between 2021, when they were enhanced, and today. At the end of 2025, so at the end of this year, in just a couple of months, those enhanced tax credits are set to expire. And what was hoped is when H.R. 1 was being negotiated, those enhanced tax credits would have been extended at that time, because they were dealing with all of various tax implications and tax credits. They chose not to do it at that time. And so now, what we’re seeing is that the federal government is, shut down, and we basically have it all hinging on these enhanced tax credits being expanded being extended. Because if they do not get extended, what happens is by the end of this year, people will be, hit basically by a double whammy, because they’re gonna be losing their entire tax credit that they would have gotten as a result of being on the marketplace, and as a result of the law that was passed in 2021 and they’re going to be hit by the increased cost of health insurance as a result of the Medicaid changes that were happening in H.R. 1. So, it’s expected, there’s various ranges of what this is going to mean to a person, but it could mean that they’re paying up to twice as much, that they would normally pay for health insurance for them and their families. And this could mean thousands of dollars extra. A year that most people just don’t have just to pay for health insurance.
Jen Rubin: And those are those notices that people are now beginning to get that says your care for next year will cost X dollars, and those are those astronomical bills that they are now getting. So, someone gets a bill like that, they say, I can’t possibly afford it, and assuming that you’re in somewhat good health, you say, well, I’m just going to take the risk, and I’m not going to be covered. So, you have fewer people in the system, and theoretically, at least, the people who remain are sicker, and bigger users of the system. What happens then to the system when you don’t have the healthy people, who are, in essence, subsidizing the system?
Avenel Joseph: Yeah, Jen, you’re getting to the heart of the problem, and this is why the Affordable Care Act came to be in the first place is because the risk pools were unsustainable, and what we were seeing is rising costs for consumers across the healthcare spectrum. Now, healthcare has continued to increase over the Obamacare years, over the years that we’ve had the ACA in place. But it’s increased at a much smaller rate than it was before. And so what we’re gonna see now, as you mentioned, there’s gonna be less people who are covered the people who are covered by health insurance are going to be the sicker people and the bigger utilizers of health insurance, is that the cost of everything is going to go up. The cost, again, of your premiums, of your deductibles, of your drug costs, everything in the system for a person who is utilizing any part of it is going to increase. It’s going to mean that hospitals and providers who can’t possibly continue to pay the differential between what it costs to treat a person and the uncompensated care, or the care that they’re giving to people who are uninsured completely because of these changes. It will mean that hospitals will close down. It will mean providers will stop seeing patients. Particularly patients that are, covered by any insurance program. They would rather see patients who can pay out of pocket and so what you’re gonna see is a further segmented healthcare system, where if you’re rich and you’re wealthy, you’ll be able to get good access to healthcare. If you are poor and you are uninsured, you will get little to no healthcare at all. And as we know, what that causes is people to have increased sicknesses. Decreased economic productivity, meaning they can’t go to work, so they can’t support for their families. Increased deaths, unnecessary deaths, increased chronic illnesses that go untreated. So all of that is going to just make what is already a pretty dysfunctional healthcare system in America that much more dysfunctional and deadly.
Jen Rubin: And when you’re talking about the economic ramifications, you’re talking about personal bankruptcies, you’re talking about people missing work, so they miss income and their employers miss their productivity. The economic second and third level, ramifications of this could be very great in terms of the economy as a whole.
Avenel Joseph: Absolutely. And really, I mean… hard-working people are hard-working Americans who are playing by the rules, who are doing everything right, who, you know, have a job. You shouldn’t be punished by the system. And that’s the reality of a system that’s just not working for them. If they have to pay… if you have a child who has asthma, you have no choice. You have to give that child their inhaler. And if you’re paying for that prescription, that means that you’re gonna have less money for rent, you’re gonna have less money for food, you’re gonna have less money for utilities. Not to mention being able to enjoy life at all, beyond just your basic needs. So this is gonna have deeply, rooted ramifications, not just for individuals and for families, but for whole communities and for the entire, American economy. I also just… I mean, we spoke in the beginning a little bit about, you know, rural areas. When it comes to… people who need these healthcare subsidies the most, whether it is Medicaid that we’re talking about, which is that federal subsidy that’s given to states, or if you’re talking about the enhanced tax credit, the people who need it the most are your farmers, your small business owners, your ranchers, your people with disabilities, the elderly, individuals who are self-employed. And in every corner of America, people are gonna feel the pain of these soaring costs.
Jen Rubin: So, I think it’s fair to say that all of this harm, the human suffering, the illness, the economic harm is simply a function of certain choices that the White House and the Republican Congress are making. This is not some natural disaster. This is not some outside force. This is about decisions that were made in order to quite frankly, give… huge tax cuts to wealthy Americans, that we are sucking money out of a system that, as poorly as it may have worked, did in fact expand coverage for millions and millions of Americans. Is that what we’re talking about?
Avenel Joseph: That’s exactly what we’re talking about. I mean, we are essentially talking about taking more than a trillion dollars of federal dollars out of a system that was serving your average American, and giving that $1 trillion to the people who make enough that they could afford all of this on their own. Giving that trillion dollars, essentially, to the top 1% to 3% of earners in this country.
Jen Rubin: Well, we certainly hope that Americans realize what is afoot, and it’s very easy to forget what’s going on, as the parties seem to be arguing about a shutdown. But this is really about fundamental issues of economic and physical survival for Americans. So, we cannot thank you enough, Dr. Joseph. It’s been a pleasure talking to you, and we’ll have you back soon as we, hopefully, work our way out of this. So, thanks so much for joining us.
Avenel Joseph: Yeah, thank you for bringing light to this, and I really do hope that people don’t lose sight of what’s happening when behind closed doors in many ways, and when there’s a government shutdown, that really what’s on the line right now are… is people’s health, their well-being, and their lives.
Jen Rubin: Absolutely. Thanks so much.
Avenel Joseph: Take care.
