States brace for ‘nearly certain’ Medicaid budget shortfalls amid COVID-19

https://www.healthcaredive.com/news/states-brace-for-nearly-certain-medicaid-budget-shortfalls-amid-covid-19/578120/

Coronavirus updates: Virus reaches all 50 states, stock futures fall

Dive Brief:

  • Most states with budget projections expect Medicaid shortfalls due to rising spending as more people lose jobs and enroll into the safety net insurance for low-income Americans due to the COVID-19 pandemic, according to a new Kaiser Family Foundation survey.
  • Almost all states with enrollment projections and more than half with spending projections expect program growth to surpass pre-pandemic estimates. Nearly all states anticipate growth will accelerate even more in the 2021 fiscal year, KFF found. As a result of that growth, 17 of 19 states with budget projections report a shortfall is “nearly certain” or “likely” for the upcoming fiscal year.
  • The survey comes as Congress once again considers raising the federal match rate for Medicaid in the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act, passed by the House of Representatives on Friday.​

Dive Insight:

Medicaid is often the top line spending item in state budgets, sending states scrambling for ways to reduce spend in the safety net health insurance program, including controversial block grants for funding.

At the start of the 2020 fiscal year, states anticipated modest Medicaid spending growth, and flat enrollment growth due to the strong economy. That forecast quickly shifted as the coronavirus spread in the U.S., which lost some 21 million jobs in April as businesses shutter their doors in compliance with stay-at-home orders, sending the unemployment rate to 15%.  

Because the U.S. generally couples coverage to employment, skyrocketing job loss could make an estimated 17 million people newly eligible for Medicaid and 6 million eligible for subsidies in the Affordable Care Act marketplaces by January 2021.

Medicaid officials from 38 states shared their budget projections with KFF for the survey. States that did not respond were still gathering data about the coronavirus or didn’t have updated enrollment or spending projections for the 2020 or 2021 fiscal years, KFF researchers Robin Rudowitz and Elizabeth Hinton said.

Thirty-two of 34 states with enrollment projections think enrollment will exceed initial projections in 2020, and 30 of 31 states anticipate that growth in 2021 will outpace the current fiscal year.

States are more mixed on spending projections. Over half of states with projections, 18 of 32, expect 2020 Medicaid spending to exceed pre-pandemic estimates. Eight states anticipate no change, and the remaining six project slightly lowered spending due to lower healthcare utilization as non-essential services have largely ground to a halt.

State Medicaid officials are more in lockstep when it comes to 2021 spending projections. Nearly all states with projections — 29 of 30 — think Medicaid spending rates in 2021 will increase over 2020.

Without greater support from the federal government, the survey hints states will face significant spending cuts for Medicaid for the upcoming fiscal year, which begins July 1 for most states. Multiple groups, including the National Governors Association and the National Association of State Medicaid Directors, have called for a higher federal match rate.

One of the first legislative packages designed to mitigate the fallout of COVID-19, the Families First Coronavirus Response Act passed March 18, authorized a 6.2 percentage point increase in the rate for Medicaid if states meet certain requirements. States can’t increase premiums or restrict eligibility standards and must cover COVID-19 testing and treatment without cost-sharing.

The HEROES Act passed by Democrats in the House on Friday would increase the match rate by 14 percentage points from July 1, 2020, through June 30, 2021, along with benchmarking an additional $100 billion for providers.

However, Senate Majority Leader Mitch McConnell, R-Ky., and President Donald Trump have said they’re in no rush to pass another round of legislation adding to the more than $3 trillion Congress has approved so far.

 

 

 

 

President Trump releases his budget and suffers a loss in court

https://mailchi.mp/0ee433170414/the-weekly-gist-february-14-2020?e=d1e747d2d8

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This week, the Trump administration unveiled its $4.8T federal budget for the upcoming fiscal year, including major cuts to spending on healthcare programs.

Rather than proposing specific spending cuts, however, the President’s budget calls for Congress to put forward plans to “advance the President’s health reform vision”—which presumably includes the administration’s recent proposal to allow states to partially convert Medicaid to a block-grant structure—with promised savings of $844B over the coming decade.

Coupled with additional proposals targeting specific changes to Medicaid reimbursement (including further implementation of work requirements for Medicaid enrollees) and reductions in subsidies for Affordable Care Act (ACA) marketplace consumers, the budget envisions a total of $1T in healthcare cuts over the next 10 years.

Complicating the administration’s vision for Medicaid transformation, however, a federal appeals court on Friday unanimously ruled that the version of Medicaid work requirements proposed by Arkansas is unlawful, because it does not further the statutory purpose of the Medicaid program.

Although the ruling does not impact work requirements programs elsewhere, it does cast a shadow over the administration’s larger attempt to encourage states to implement such policies.

Like the broader fate of the ACA, the future of Medicaid work requirements will ultimately lie in the hands of the US Supreme Court.

The President’s budget, however, will face immediate opposition in Congress, where House Speaker Nancy Pelosi (D-CA) called it “a complete reversal of the promises [President Trump] made in the campaign and a contradiction of the statements he made in the State of the Union.”

As the general election approaches, voters will eventually have to choose between the conservative vision for healthcare underpinning the President’s budget, and progressive proposals being advanced by Democratic candidates. With healthcare being the number one issue on the mind of the electorate, that choice could not be more stark.

 

 

 

Appeals court strikes down Trump approval of Medicaid work requirements

https://thehill.com/policy/healthcare/483105-appeals-court-strikes-down-trump-approval-of-medicaid-work-requirements?utm_source=&utm_medium=email&utm_campaign=27666

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A federal appeals court on Friday struck down the Trump administration’s approval of Medicaid work requirements in Arkansas, the latest legal blow to one of President Trump‘s signature health initiatives. 

The U.S. Court of Appeals for the D.C. Circuit affirmed a lower court ruling that the approval of the work requirements was “arbitrary and capricious.

More than 18,000 people lost coverage in Arkansas due to the work requirements before they were halted by a lower court.

The court found that the Trump administration disregarded the statutory purpose of Medicaid — to provide health coverage — and did not adequately account for the coverage losses that would result from the work requirements. 

“Failure to consider whether the project will result in coverage loss is arbitrary and capricious,” Judge David Sentelle, an appointee of President Reagan, wrote in the opinion.

Requiring Medicaid recipients to work or else lose coverage is a top priority of Centers for Medicare and Medicaid Services Administrator Seema Verma. She argues that the policy helps lift people out of poverty by getting them jobs and out of Medicaid into employer-based insurance.

But Democrats and health care advocates have denounced the move, saying it imposes burdensome paperwork requirements on low-income people that cause them to lose coverage even if they are working.

The policy has also faced a string of legal losses, with courts ruling that Congress would need to act to authorize the work requirements. 

Arkansas was the only state where the requirements went into effect before being blocked by the courts. Several other states’ efforts were approved, but the initiatives have been halted as the issue works its way through the courts.

“The Court recognized the tragic harm that these work requirements have caused people in Arkansas doing their best to get ahead,” said Kevin De Liban, an attorney at Legal Aid of Arkansas, which helped challenge the requirements. “Now, more than two hundred thousand Arkansans on the program can rest easier knowing that they’ll have health care when they need it.”

Conservative changes to Medicaid have been a leading priority of the Trump administration, which also recently announced plans to let states block-grant their funding for the program. That move was also denounced by Democrats as inevitably leading to coverage losses and is also likely to be challenged in court.

Kentucky had originally also been part of the work requirement litigation, but a Democratic governor, Andy Beshear, was elected last year and ended the initiative.

 

 

 

Public Charge Rule Could Erode Enrollment in Insurance Coverage

Public Charge Rule Could Erode Enrollment in Insurance Coverage

Mother and baby at clinic with doctor. Baby is looking directly into the camera.

In a 5-4 vote reflecting the ideological split among the justices, the US Supreme Court on January 27 decided to allow the Trump administration to commence enforcement (PDF) of its “public charge” rule nationwide. Only Illinois, where a statewide injunction is currently in effect, will not begin enforcing the rule. The regulation was slated to take effect last October, but federal judges in California, Illinois, Maryland, New York, and Washington blocked its implementation after states and immigrant rights groups challenged its legality. Federal appeals courts later lifted all but New York’s nationwide injunction and Illinois’ statewide injunction. The Supreme Court has now “stayed,” or put on hold, New York’s injunction, allowing the rule to take effect while the litigation continues.Essential Coverage

The US Citizenship and Immigration Services agency said the new rule will become effective February 24.

The public charge rule sparked controversy because it “would expand the government’s ability to refuse green cards or visas for legal immigrants determined to be a ‘public charge,’ or dependent on public assistance,” Susannah Luthi explained in Politico. “Those using or likely to use Medicaid, food stamps, and other safety-net programs would face greater scrutiny from immigration officials.”

Experts have warned of a “chilling effect” among immigrant communities, meaning that even those who are not subject to the public charge rule could disenroll or avoid public benefits out of fear. The Institute for Community Health estimated that 195,000 to 455,000 California children in need of medical attention could leave Medi-Cal if the rule takes effect. Including adults, this estimate grows to between 317,000 and 741,000 Californians disenrolling from Medi-Cal, according to researchers from UCLA and UC Berkeley (PDF).

The chilling effect has been documented on a national scale. According to the Urban Institute, in 2018, the year when the Trump administration proposed expanding the public charge rule, about 14% of adults in immigrant families reported that fear prompted them or a family member not to apply for a public benefit program or to disenroll from one. Of the adults who experienced chilling effects, 42% said they or their family members did not participate in Medicaid or the Children’s Health Insurance Program.

Soon after the rule was finalized last year, Eisner Health, a community clinic in Los Angeles, started getting phone calls from patients enrolled in Medi-Cal and CalFresh who wanted to end their families’ coverage, Claudia Boyd-Barrett reported in California Health Report. Many of those patients were not yet permanent residents or were members of mixed immigration status families who feared being penalized for using public benefits.

New Rule Doesn’t Apply to Many Immigrants

It is important to note that many immigrants are not subject to the new public charge rule. “It is urgent that all of us working with immigrant communities — via government, legal aid, health care, and more — have accurate and accessible information for families,” Sandra R. Hernández, president and CEO of CHCF, wrote on Twitter.

Mark Ghaly, California Health and Human Services Agency secretary, released a statement emphasizing that immigrant families should learn their rights. “You can find a list of nonprofit organizations providing free legal immigration services on the California Department of Social Services (CDSS) website, here,” Ghaly said.

CDSS offers a list of legal services providers across California who can assist with public charge questions. Protecting Immigrant Families (a partnership of the National Immigration Law Center and The Center for Law and Social Policy) also has resources on the public charge rule.

Following the Supreme Court’s order to stay the nationwide injunction, California Attorney General Xavier Becerra reiterated his commitment to fighting the rule. “We are a nation of immigrants, so we will lean forward in the face of heartless attacks on working families,” Becerra said in a statement. “Together, we’ll continue our fight to stand up for the right of each and every person who calls the United States their home.”

The legal challenges to the public charge rule will continue to move forward in courts around the nation — including in California — the New York Times’s Adam Liptak reported.

Medicaid Block Grants Could Reduce Access for Many

The Trump administration has announced its plan to let states volunteer to convert a portion of their Medicaid funding into block grants. The program, which has been branded a “Healthy Adult Opportunity,” represents a radical change in financing for Medicaid. Medicaid programs, which are operated by states with significant federal funding and oversight, constitute the nation’s health insurance program for Americans with low incomes. Covering over 75 million people, or one in five Americans, Medicaid programs provide services to 83% of children from low-income families, 48% of children with special health care needs, and 45% of nonelderly adults with disabilities.

On January 30, the administrator of the US Centers for Medicare & Medicaid Services, Seema Verma, sent to state Medicaid directors a letter (PDF) about the new block grant program. Verma gave states “the possibility of trading away an entitlement program that expands and contracts depending on how many poor people need the government health coverage,” Amy Goldstein wrote in the Washington Post. “In exchange, for able-bodied adults in the program, states could apply to receive a fixed federal payment and freedom from many of the program’s rules.”

Additionally, participating states would be allowed to limit the health benefits and drugs offered by their Medicaid programs, Rachel Roubein and Dan Diamond reported for Politico. According to one official, patients with behavioral health needs or HIV would be protected under the new plan.

Criticism from Medicaid advocates was swift. Twenty-seven patient and consumer groups, including the American Lung Association, American Cancer Society, and National Alliance on Mental Illness, issued a statement expressing strong opposition to the new guidance. “Block grants and per capita caps will reduce access to quality and affordable health care for patients with serious and chronic health conditions and are therefore unacceptable to our organizations,” they wrote.

“Worst Medicaid Idea Ever”

Frederick Isasi, executive director of Families USA, said in a statement, “Having spent many years working with governors and Medicaid programs, block grants are possibly the worst Medicaid idea ever presented to states by a federal administration. They would allow the federal government to off-load shared Medicaid responsibility at the expense of deep cuts to state budgets, vital programs supported by states, and the people who rely on those programs.”

Joan Alker, executive director and a cofounder of Georgetown University’s Center for Children and Families, warned in a statement that “if states accept a fixed cap on federal funding to meet their health care needs, they may be able to get by in the short term, but they put the health of their citizens and future state budgets at serious risk down the road.”

The block grant program is unlikely to affect California, which has invested heavily in expanding Medi-Cal access and is not expected to apply to participate.

Nonetheless, the block grant proposal shows that the Trump administration continues to prioritize changes that weaken the foundation of the nation’s health care safety net and could dramatically reduce health coverage for millions of Americans with low incomes.

 

 

 

Tennessee becomes first state to ask permission for Medicaid block grants

https://thehill.com/policy/healthcare/471383-tennessee-becomes-first-state-to-ask-permission-for-medicaid-block-grants

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Tennessee on Wednesday formally asked the Trump administration for permission to convert its Medicaid program into a limited, block grant–type model, a controversial plan that, if approved, could be the first in the nation.

The proposal will test the Trump administration’s ability to allow states the flexibility to make drastic changes to Medicaid.

Imposing block grants in Medicaid has long been a major conservative goal and has been encouraged by the Trump administration, but it is not clear if the administration alone has the legal authority to allow such drastic changes.

Administration officials had drafted a guidance that would make it easier for states to apply for a capped payment or block grants, but the document was quietly removed from the White House Office of Management and Budget last week.

No states have been granted permission to date, but if Tennessee’s plan is approved, it would likely embolden other Republican-led states. The proposal will also mobilize opposition from patient advocacy groups, who have already been protesting since the state passed a bill

“This proposal represents a significant opportunity for the federal government to test a potential innovative, national solution at how to incentivize states’ performance in maximizing the value of taxpayer dollars,” the state said in its application.

Republicans say policies like block grants allow for more state flexibility and are more fiscally sustainable.

Critics fear a block grant would ultimately lead to states kicking people off their rolls or pulling back services. But Tennessee’s proposal is a novel one that departs from some of the more traditional block grant ideas, even as it imposes financial caps on federal spending.

Under Tennessee’s proposal, the state would receive a nearly $7.9 billion block grant from the federal government, which is based on projected Medicaid costs. The amount would be adjusted for inflation, but unlike a traditional block grant, it could increase in the future based on enrollment.

If enrollment drops, the block grant amount would not decrease. The state said no current TennCare members would experience a loss or rollback of benefits.

Also unlike a traditional block grant, if the state spent less in a given year than it would have under the traditional Medicaid system, Tennessee would split those savings with the federal government.

 

 

CMS pitches ramped up oversight of Medicaid payments, promises block grant guidance

https://www.healthcaredive.com/news/cms-pitches-ramped-up-oversight-of-medicaid-payments-promises-block-grant/567135/

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UPDATE: Nov. 13, 2019: This brief has been updated to include comments from provider groups.

Dive Brief:

  • CMS proposed a new rule Tuesday that would establish stricter requirements for states to report information on supplemental Medicaid payments to providers in a bid to clamp down on spending and promote transparency.
  • The agency will also soon release guidance on how states can test alternative financing approaches in the safety net program like block grant and per-capita cap proposals for “certain optional adult populations,” CMS Administrator Seema Verma said Tuesday at the National Association of Medicaid Director’s annual conference in Washington, D.C.
  • Later this year, CMS will also issue guidance on how states can promote value-based payments and social determinants of health factors in Medicaid, Verma said. The Center for Medicare and Medicaid Innovation is currently developing several new payment models to push providers to take on more risk for their patient populations in those programs.

Dive Insight:

The moves are in line with sweeping changes from the Trump administration moving more power to the states and asking more from recipients. The CMS administrator teased late last month the agency would soon release new guidance for states to inject flexibility into their Medicaid programs.

“We shouldn’t ration care but instead make how we pay for care more rational,” Verma said Tuesday. “Medicaid must move toward value-based care.”

Speaking to the Medicaid directors Tuesday, Verma said the changes are aimed preserving Medicaid for future generations.

“Going forward there will be no new [State Innovation Model] grants, no more open-ended one-off district waivers,” she said. “We must move forward with a more unified, cohesive approach across payers, across CMS, across states.”

The proposed rule, called Medicaid Fiscal Accountability (MFAR), will add more scrutiny to supplemental payments, which are Medicaid payments to providers in addition to medical services rendered to Medicaid beneficiaries, such as payments supporting quality initiatives or bolstering rural or safety net providers.

Some states rely heavily on these additional payments to offset low Medicaid reimbursement or support struggling hospitals. Provider lobbies did not take kindly to the new rule.

“We share the government’s desire to protect patients and taxpayers with transparency in federal programs, but today’s proposal oversteps this goal with deeply damaging policies that would harm the healthcare safety net and erode state flexibility,” Beth Fledpush, SVP of policy and advocacy for America’s Essential Hospitals, said in a statement.

AEH, which includes more than 300 member hospital and health systems, many of which are safety net providers, asked CMS to withdraw the proposal. The American Hospital Association told Healthcare Dive it was still reviewing the rule and declined comment.

However, government oversight agencies like the Government Accountability Office and the Office of Inspector General have recommended changes to these payments, which have increased from 9.4% of Medicaid payments in 2010 to 17.5% in 2017, according to CMS.

MFAR would also propose new definitions for “base” and “supplemental” payments in order to better enforce statutory requirements around and eliminate vulnerabilities in program spending.

Verma has long teased CMS support of block grants, an idea popular with conservatives, but Tuesday’s speech solidifies the agency’s support of such proposals. A handful of red states have been mulling over capped spending to gain more clarity around budgets.

In September, Tennessee unveiled its plan to move to a block grant system that would set a floor for federal contributions adjusted on a per capita basis if enrollment grows. Any savings would be shared between the state and the government.

Tennessee must submit a formal application to CMS to later than Nov. 20. If approved, it would become the first state to use a block grant funding mechanism in Medicaid. Additionally, Utah submitted a waiver application seeking per-capita Medicaid caps in June; Oklahoma Gov. Kevin Stitt, a Republican, is reportedly considering such a program; and Alaska and Texas have both commissioned block grant studies.

 

 

 

A group of Republicans has unveiled its healthcare plan. Here is what’s new and what isn’t

https://www.fiercehealthcare.com/payer/a-group-republicans-have-a-new-healthcare-plan-here-what-new-and-what-isn-t?mkt_tok=eyJpIjoiT0RZNE4yTm1PV1psTmpNeSIsInQiOiJ5R3gxMEwrdUhPWUdZVlBTZ3NWWkdMV08xOCtObDdFaGdHaE1hN0o4Z2p5WnBaN3hjd2lDVm5ybnBhWUtUNFdlTW1LcndtaTN1WUtNVzg1NmUrQjJmWEhqTWpJR3BkUmVuZmVNS2FzdmRWdENuMEtNT0tJMXozUW93N0lVQmZ5WSJ9&mrkid=959610

Capitol building in Washington

The Republican Study Committee (RSC), a group of 145 House GOP lawmakers, rolled out a new healthcare plan to counter Democrats’ call for “Medicare for All.”

However, the plan itself closely resembles the Affordable Care Act (ACA) repeal bill called the American Health Care Act (AHCA) that the House passed in 2017 and contributed greatly to the loss of the GOP House majority in 2018.

For the plan to become law, Republicans would have to retake the House in 2020, and President Donald Trump would need to be reelected. However, if those victories happen, the plan could be a blueprint for how a GOP-controlled Congress would move forward on healthcare, as the committee counts among its members both GOP leadership and rank and file.

Here are three takeaways from the plan:

Shifting to high-risk pools

The plan would retain the ACA’s requirement that individual market plans cover pre-existing conditions. However, it takes out provisions that ensure patients with pre-existing conditions get affordable coverage such as requirements that prevent plans from charging sicker people higher premiums than healthy customers.

The plan does introduce high-risk pools that would be used by people with high healthcare costs, a commonly deployed tactic by states for the individual market before the ACA. The high-risk pools would be funded by repackaging the funding used for the ACA’s subsidies and the Medicaid expansion.

However, the plan doesn’t identify the full amount that should be devoted to high-risk pools, which segregate high-cost customers on the individual market.

The plan cites a 2017 report from consulting firm Milliman that estimated a federally supported high-risk pool could require $3.3 billion to $16.7 billion a year. The AHCA also called for high-risk pools but only gave $2.5 billion a year to help states fund them.

While the “$17 billion annual price tag may not seem ideal, it sets up a sustainable path for the individual market,” the RSC report said.

The desire for more funding for high-risk pools is likely a nod to Democratic attacks during the 2018 midterms that the AHCA threatened pre-existing condition protections. The nonpartisan Congressional Budget Office said the AHCA, which let states waive pre-existing condition protections, would lead to people in those states not getting affordable coverage for their pre-existing conditions.

While the AHCA had funding for high-risk pools, experts across the healthcare spectrum said that it wasn’t enough. It would remain to be seen how much more funding would be needed.

Doubling down again on health savings accounts

Bolstering health savings accounts has been a very popular reform idea among Republicans, and that enthusiasm is clear in the RSC plan.

The plan proposes to increase how much an employee can contribute to a health savings account. Currently, an individual can contribute $3,500 and a family can contribute $7,000.

A 2018 bill that passed out of the House but didn’t make it through Congress increased the contribution cap to $6,650 for an individual and $13,300 for a family.

Now, the RSC plan wants to increase the figures again, this time to $9,000 per individual and $18,000 for families, in line with a proposal from libertarian think tank Cato Institute.

“The RSC plan would also expand health savings accounts so that they could be used for a number of health services and products that currently must be paid for with after-tax dollars,” the plan said.

Replace Medicaid expansion with a block grant

This is another common reform in ACA repeal plans. The bill would phase out the enhanced federal matching rate for the Medicaid expansion to pre-expansion levels.

In addition, the bill would replace the existing open-ended federal match with a fixed amount in a block grant.

But the plan has a new twist in a new “flex-grant” that would give more funding to states that adopt a work requirement. However, half of the funding for any flex-grant must go toward supporting the purchase of private plans for low-income individuals.

So far, 12 states have gotten approval from the Trump administration to install work requirements for their Medicaid expansion population. But of those 12 states, three have had their work requirement programs struck down by legal challenges.

Some states are also considering installing their own block grants. Tennessee has released a draft proposal for a block grant but has yet to get federal approval.

 

 

 

Republicans ready to revive ACA repeal talks

https://www.beckershospitalreview.com/hospital-management-administration/republicans-ready-to-revive-aca-repeal-talks.html

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Sen. Lindsey Graham, R-S.C., promised to revive ACA repeal in Congress if Republicans can win back a majority in the House and reelect President Donald Trump in 2020, according to an interview on South Carolina radio show “The Morning Answer with Joey Hudson,” featured by The Hill

“This is what 2020 is about: If we can get the House back, and keep our majority in the Senate, and President Trump wins reelection, I can promise you, not only are we going to repeal Obamacare, we are going to do it in a smart way where South Carolina would be the biggest winner,” Mr. Graham said.

Mr. Graham, who failed to pass an ACA repeal plan in 2017, called “Medicare for All” and other Democratic presidential candidates’ healthcare plans “crazy.”  

“Medicare for All is $30 trillion, and it’s going to take private sector healthcare away from 180 million Americans,” he said. Instead, he proposed giving states the power to determine healthcare policy through block grants and other smaller reforms. This would allow states to test conservative healthcare policies against liberal ones, he said. 

“This election has got a common thing: Federalism versus socialism,” Mr. Graham said. “What I want to do is make sure the states get the chance to administer this money using conservative principles if you are in South Carolina, and if you want Medicare for All in California, knock yourself out.”

No partial Medicaid expansions

https://www.axios.com/newsletters/axios-vitals-a4051909-429f-4b4c-a88b-22051b431ef7.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

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The Trump administration made a very big decision over the weekend: It won’t approve full federal funding for a partial Medicaid expansion.

Why it matters: The partial expansion had looked like a key weapon in red states’ continued resistance to the ACA. Without it, Medicaid enrollment likely will keep growing.

Between the lines: Although the reasoning is different, the Trump administration is now adopting the same policy as the Obama administration — a decision many experts believe the law compels.

Details: Utah voters approved the full ACA expansion last year, but the state legislature overruled them to pass a more limited version.

  • Utah believed that the federal Centers for Medicare & Medicaid Services would approve full federal funding even for the partial expansion, which prompted other red states to explore the same idea.

The intrigue: While the Obama administration rejected these requests on the grounds that federal law dictates the terms of a Medicaid expansion, the Trump administration went a different route, per the Washington Post.

  • “White House advisers argued that it did not make sense to approve generous federal funding under the ACA while the administration is arguing that the entire law should be overturned,” the Post reports.

The bottom line: Utah has a backup plan in place — the full Medicaid expansion that Utah residents voted for in the first place.

  • Partial expansion was mainly attractive to red states facing pressure to expand but had leaders who didn’t want to. With that option off the table, don’t be surprised if more states end up just going along with the expansion.

 

 

 

 

Red states’ Medicaid gamble: Paying more to cover fewer people

https://www.axios.com/republicans-medicaid-affordable-care-act-expensive-d7057a8e-0a55-4f0d-906e-e42aa3f00ba9.html

Illustration of a price tag hanging from an IV stand

Red states are getting creative as they look for new ways to limit the growth of Medicaid. But in the process those states are taking legal, political and practical risks that could ultimately leave them paying far more, to cover far fewer people.

Why it matters: Medicaid and the Children’s Health Insurance Program cover more than 72 million Americans, thanks in part to the Affordable Care Act’s Medicaid expansion. Rolling back the program is a high priority for the Trump administration, and it needs states’ help to get there.

The big picture: The Centers for Medicare & Medicaid Services, under the leadership of Administrator Seema Verma, has made clear that it wants to say “yes” to new limits on Medicaid eligibility, and has invited states to ask for those limits.

  • But CMS hasn’t actually said “yes” yet to some of the most significant limits states have asked for.
  • In the meantime, states are left either with vague ambitions they’re not sure how to implement, or with risky plans that put their own budgets on the line.

What we’re watching: State-level Republicans are waiting for CMS to resolve two related issues: how much federal funding their versions of Medicaid can receive, and the extent to which they’re able to cap enrollment in the program.

  • “These issues are going to continue to be intertwined,” said Joan Alker, the executive director of Georgetown University’s Center for Children and Families.

Verma has reportedly told state officials that she wants to use her regulatory power to convert Medicaid funding into a system of block grants — which would be an enormous rightward shift and probably a big cut in total funding.

  • CMS probably cannot do that on its own, experts said, but it could achieve something similar by approving caps on either enrollment or spending.

Where it stands: GOP lawmakers in a handful of states are looking to Utah, which has bet big on Verma’s authority, for signals about what’s possible.

  • Utah voters approved the full ACA expansion last year, but the state legislature overruled them to pass a more limited version.
  • By foregoing the full expansion, Utah passed up enhanced federal funding. It’s still asking for that extra money — a request CMS has never previously approved.
  • Utah will also ask CMS to impose a per-person cap on Medicaid spending — a steep cut that was part of congressional Republicans’ failed repeal-and-replace bill, and which may strain CMS’ legal authority.
  • If Utah doesn’t get those two requests, its backup plan is simply to adopt the full expansion.

What’s next: Utah is not the only red state leaning into Verma’s agenda, but it’s further out on a limb than any other.

  • Idaho, like Utah, overruled its voters to pass a narrower Medicaid bill. But it preserved an option for people to buy into the ACA’s expansion.
  • Alaska Gov. Mike Dunleavy has said he wants to take Verma up on her offer of block grants; so have legislators in Tennessee and Georgia. But in the absence of any detail about what that means, or what CMS will approve, that’s all pretty vague right now.

If CMS does move forward on any of this, it could face the same threat of lawsuits that have stymied its first big Medicaid overhaul — work requirements.

  • Those rules are on ice in two states because a judge said they contravene Medicaid’s statutory structure and goals. The same argument could await a partial expansion or tough spending caps.

“There’s a clear agenda here to get a handful of states to take up these waivers, which fundamentally undermine the central tenets of the Medicaid program — which [are] that it is a guarantee of coverage, and a guarantee of federal funding,” Alker said.