Saving Medicaid: Why The LGBT Community Should Care

In the banquet of spending cuts laid out as part of the debt negotiations, everyone seems to want a piece of Medicaid. Congress and the Administration are hungry for $4 trillion in savings, and while a powerful voting bloc of seniors helps protect Medicare, Medicaid serves people whose voices at the ballot box aren’t typically feared by those in Washington: the majority of Medicaid beneficiaries are women, children, and people with disabilities, many of them people of color, and all of them familiar with how poverty can cut off access to lifesaving medical care.

Medicaid works

Medicaid provides coverage for more than 50 million Americans. In a recent poll, more than 50 percent of respondents shared that they have a personal connection to Medicaid, either because they themselves have received assistance from the program at some point in their lives or because a friend or family member had. Other recent research demonstrates that Medicaid makes a huge difference in people’s lives. Compared to people without insurance, Medicaid beneficiaries are happier, healthier, and have more access to the routine health care that prevents public health tragedies like high infant mortality, soaring costs for uncompensated emergency room visits, and unnecessary deaths from controllable conditions like diabetes and heart disease.

The Affordable Care Act recognizes Medicaid’s importance as a central part of the safety net and slates the program for a big expansion. The health reform law includes a requirement that states maintain current eligibility levels for their Medicaid programs, and beginning in 2014, an estimated 16 million currently uninsured people will receive coverage under Medicaid.

The future of Medicaid includes the LGBT community

Many lesbian, gay, bisexual, and transgender people and their families will be among these new beneficiaries. Currently, most states do not consider childless adults, regardless of their income, eligible for Medicaid benefits. As a result, Medicaid probably covers few LGBT people at the present time, though a lack of data collection on sexual orientation and gender identity on most nationwide health and insurance surveys makes the number of current LGBT Medicaid beneficiaries difficult to estimate. Because many LGBT people have incomes that fall within the new nationwide eligibility standards (under 133% of the federal poverty line), however, there will likely be a significant proportion of LGBT adults added to the Medicaid rolls in 2014.


Despite popular stereotypes, poverty and un- and underemployment as a result of discrimination are persistent problems for LGBT people and their families. Recent studies indicate that poverty rates among LGBT Americans are higher than those among the heterosexual and non-transgender population. Lesbian and bisexual women experience poverty at a rate of 24%, compared to 19% among heterosexuals, while a recent survey indicates that transgender individuals make $10,000 a year or less at twice the national average, simply because of who they are. Employment discrimination on the basis of sexual orientation and gender identity results in higher rates of un- and under-employment rates for LGBT people as compared their non-LGBT peers. Even among those who are employed, a significant wage gap between lesbian and gay employees and their heterosexual coworkers persists, and uninsurance remains high in the LGBT community in no small part because few employers extend insurance coverage to their employees’ same-sex partners.

Another recent development has made Medicaid even more important for the LGBT community, which continues to bear a disproportionate burden of the HIV/AIDS epidemic: in June 2011, the Centers for Medicare and Medicaid Services released guidance to states on using Section 1115 Medicaid waivers to extend coverage to people living with HIV or AIDS before they become sick enough to qualify as disabled. This guidance provides a lifesaving bridge to 2014 for adults with HIV or AIDS who do not meet their state’s current Medicaid eligibility requirements.

Cutting Medicaid is the wrong medicine

The proposals under consideration for reforming Medicaid by converting the program to a block grant, imposing spending caps, or reducing the federal share of payments to health care providers who accept Medicaid all threaten to undermine the program’s current and future role in providing lifesaving care for those who need it most. Block grants and spending caps will shift unsustainable funding burdens to the states by giving them vastly fewer funds than they need to provide even minimum services to the smallest number of eligible people. Previous attempts to convert Medicaid to a block grant, in 1981, 1995, and 2003, have all failed on this basis. Proposals to reduce the federal share of Medicaid reimbursements will also ultimately shift greater costs to weakened state budgets. As federal savings turn into state liabilities, states will have little recourse but to eliminate benefits, cut provider payments, or slash recipients from their Medicaid rolls.

Evading the Medicaid eligibility expansion under the Affordable Care Act will also be disastrous for state budgets. States that fail to fulfill their obligations to their Medicaid-eligible population under the Affordable Care Act will forgo large sums of federal money that would have helped these states cover their uninsured populations. These states will also be forced to continue to stretch the straining safety net of uncompensated care for those without insurance — and they will do so with $14 billion less in federal disproportionate share hospital payments (DSH) than they currently receive.


As part of the fabric of American society and as members of every racial, ethnic, and socioeconomic group, LGBT people need Medicaid. Medicaid already provides critical services to many of America’s poorest people, and its role as a pillar of America’s health system will only grow under the Affordable Care Act. Proposals that restrict, divert, or eliminate Medicaid funding will have a devastating effect on the ability of providers across the country to provide vital care for their communities.