Tag Archives: Health Policy

U.S. Prescription Drug Costs Are a Crime

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https://www.bloomberg.com/view/articles/2018-02-27/prescription-drug-costs-in-the-u-s-are-a-crime

 

And just tweaking the system won’t solve the problem.

President Donald Trump has complained that U.S. drug companies are “getting away with murder.” For once the hyperbole is forgivable: It suggests he takes the problem of drug costs seriously and might be willing to do something about it. Unfortunately, his administration’s efforts up to now suggest the opposite.

The White House has proposed tweaks to government health-care programs. Some of these measures are worth trying — they could help at the margin — but tweaks aren’t enough. The underlying problem is drug prices that are indeed murderous: Americans and their insurers often pay many times what people in other developed countries pay for the same medicines. That’s what policy needs to confront.

The administration wants insurers participating in Medicare’s prescription-drug program, for instance, to share more directly with beneficiaries the discounts they arrange with drug companies. Out-of-pocket drug costs for some people on Medicare would be capped, and reimbursement for medicines administered by doctors would be trimmed. In Medicaid, a handful of states would be allowed to decline coverage for certain drugs, increasing their leverage in negotiating discounts.

Such changes could lower drug spending for some Medicare and Medicaid beneficiaries. But they miss the main point by shifting costs within the health-care system rather pressing down on the costs themselves. Unless this changes, the U.S. will continue to be overcharged for its drugs.

The companies often say that high U.S. prices pay for research into new lifesaving products. Leaving aside why U.S. patients should be asked to shoulder that burden for the entire world, the evidence shows that the argument is false: The premium companies collect in the U.S. market is substantially greater than the amount they spend on research and development.

State legislatures have aimed closer to the mark with efforts to expose the math behind price increases. Vermont, Nevada and California have new lawsrequiring that drug companies provide cost breakdowns to justify big price hikes on popular drugs (including, in Nevada’s case, drugs for diabetes). Several other states are considering doing the same.

Even if these laws stand — they’re being challenged in court — transparency gets you only so far. Pushing prices down will take stronger efforts from the federal government to increase competition.

One good way to do that is to speed the uptake of generics. Scott Gottlieb, commissioner of the Food and Drug Administration, has been pressuring drug makers to stop trying to extend the monopolies they’ve been granted (via FDA approval and patents) for brand-name drugs. But only Congress can forbid those practices, and it has yet to act on bipartisan legislation that would do the job. Trump could show he’s serious about lowering drug prices by urging Congress to pass the law.

Another way to boost competition would be to let people and pharmacies import some drugs from other countries with sound pharmaceutical regulation, such as Canada. Almost one in 10 Americans say they already do, despite the official prohibition.

The U.S. should also do what so many other countries do: negotiate. The Centers for Medicare and Medicaid Services ought to use its enormous purchasing power on behalf of the 42 million Americans in the Medicare drug-benefit program, ensuring that prices better reflect the drugs’ actual medical value. Again, for this to happen, Congress would need to change the law. Incredible as this will seem elsewhere in the world, the U.S. government has denied itself permission to apply pharmaceutical cost-benefit analysis and negotiate prices.

Trump is right to deplore the cost of drugs in the U.S. There’s no great mystery about the causes — and no doubt that much bolder measures than the administration has in mind will be needed to bring prices down.

Why Your Pharmacist Can’t Tell You That $20 Prescription Could Cost Only $8

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As consumers face rapidly rising drug costs, states across the country are moving to block “gag clauses” that prohibit pharmacists from telling customers that they could save money by paying cash for prescription drugs rather than using their health insurance.

Many pharmacists have expressed frustration about such provisions in their contracts with the powerful companies that manage drug benefits for insurers and employers. The clauses force the pharmacists to remain silent as, for example, a consumer pays $125 under her insurance plan for an influenza drug that would have cost $100 if purchased with cash.

Much of the difference often goes to the drug benefit managers.

Federal and state officials say they share the pharmacists’ concerns, and they have started taking action. At least five states have adopted laws to make sure pharmacists can inform patients about less costly ways to obtain their medicines, and at least a dozen others are considering legislation to prohibit gag clauses, according to the National Conference of State Legislatures.

Senator Susan Collins, Republican of Maine, said that after meeting recently with a group of pharmacists in her state, she was “outraged” to learn about the gag orders.

“I can’t tell you how frustrated these pharmacists were that they were unable to give that information to their customers, who they knew were struggling to pay a high co-pay,” Ms. Collins said.

Alex M. Azar II, the new secretary of health and human services, who was a top executive at the drugmaker Eli Lilly for nearly 10 years, echoed that concern. “That shouldn’t be happening,” he said.

Pharmacy benefit managers say they hold down costs for consumers by negotiating prices with drug manufacturers and retail drugstores, but their practices have come under intense scrutiny.

The White House Council of Economic Advisers said in a report this month that large pharmacy benefit managers “exercise undue market power” and generate “outsized profits for themselves.”

Steven F. Moore, whose family owns Condo Pharmacy in Plattsburgh, N.Y., said the restrictions on pharmacists’ ability to discuss prices with patients were “incredibly frustrating.”

Mr. Moore offered this example of how the pricing works: A consumer filling a prescription for a drug to treat diabetes or high blood pressure may owe $20 if he uses insurance coverage. By contrast, a consumer paying cash might have to pay $8 to $15.

Mark Merritt, the president and chief executive of the Pharmaceutical Care Management Association, which represents benefit managers, said he agreed that consumers should pay the lower amount.

As for the use of gag clauses, he said: “It’s not condoned by the industry. We don’t defend it. It has occurred on rare occasions, but it’s an outlier practice that we oppose.”

However, Thomas E. Menighan, the chief executive of the American Pharmacists Association, said that such clauses were “not an outlier,” but instead a relatively common practice. Under many contracts, he said, “the pharmacist cannot volunteer the fact that a medicine is less expensive if you pay the cash price and we don’t run it through your health plan.”

A bipartisan measure that took effect in Connecticut this year prohibits the gag clauses. It was introduced by the top Democrat in the Connecticut Senate, Martin M. Looney, and the top Republican, Len Fasano.

“This is information that consumers should have,” Mr. Looney said in an interview, “but that they were denied under the somewhat arbitrary and capricious contracts that pharmacists were required to abide by.”

Mr. Fasano said that consumers were sometimes paying three or four times as much when they used their insurance as they would have paid without it. “That’s price gouging,” he said in an interview.

The legislation, Mr. Fasano said, encountered “a lot of resistance” from large pharmacy benefit managers and some insurance companies.

In North Carolina, a new law says that pharmacists “shall have the right” to provide insured customers with information about their insurance co-payments and less costly alternatives.

A new Georgia law says that a pharmacist may not be penalized for disclosing such information to a customer. Maine has adopted a similar law.

In North Dakota, a new law explicitly bans gag orders. It says that a pharmacy or pharmacist may provide information that “may include the cost and clinical efficacy of a more affordable alternative drug if one is available.”

The North Dakota law also says that a pharmacy benefit manager or insurer may not charge a co-payment that exceeds the actual cost of a medication.

The lobby for drug benefit companies, the Pharmaceutical Care Management Association, has filed suit in federal court to block the North Dakota law, saying it imposes “onerous new restrictions on pharmacy benefit managers.”

Specifically, it says, the North Dakota law could require the disclosure of “proprietary trade secrets,” including information about how drug prices are set. “P.B.M.–pharmacy contracts typically preclude a pharmacy from disclosing to the patient the amount of a reimbursement,” the lawsuit says.

Gov. Asa Hutchinson of Arkansas, a Republican, said this past week that he would call a special session of the State Legislature to authorize the regulation of pharmacy benefit managers by the state’s Insurance Department.

He said he feared that some independent pharmacists receiving “inadequate reimbursement” from the benefit managers might go out of business, reducing patients’ access to care, especially in rural areas.

 

 

Democrats considering a new strategy to expand health coverage as frustrations build with Obamacare

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http://www.latimes.com/politics/la-na-pol-democrats-healthcare-agenda-20180227-story.html

Democrats considering a new strategy to expand health coverage as frustrations build with Obamacare

After spending most of 2017 defending the Affordable Care Act from GOP attacks, a growing number of Democrats believe the law’s reliance on private insurance markets won’t be enough and the party should focus instead on expanding popular government programs like Medicare and Medicaid.

The emerging strategy — which is gaining traction among liberal policy experts, activists and Democratic politicians — is less sweeping than the “single-payer” government-run system that Sen. Bernie Sanders (I-Vt.) made a cornerstone of his 2016 presidential campaign.

Many Democrats still fear such a dramatic change would disrupt coverage for too many Americans, but they have also concluded that the current law’s middle-ground approach to build on the private insurance market — originally a Republican idea — isn’t providing enough Americans with adequate, affordable health coverage.

These Democrats see the expansion of existing public programs as a more pragmatic and politically viable way to help Americans struggling with rising costs and correct the shortcomings of the 2010 law, often called Obamacare.

 “What is clear is that the Democratic Party as a whole is coming to the conclusion that stand-alone private market solutions to healthcare do not achieve affordability and coverage for all,” said Chris Jennings, an influential Washington health policy advisor who worked for Presidents Clinton and Obama.

“But there is a recognition that you can’t just snap your fingers and have political consensus. … And one of the lessons learned from 2017 is that you better do your homework.”

Democrats are eager to avoid mistakes made by Republicans, who proved unprepared last year as they struggled unsuccessfully to fulfill their years-long promise to repeal the current health law.

Developing a new healthcare agenda doesn’t promise to be easy, as liberal activists and others in the progressive wing of the Democratic Party remain committed to the single-payer solution championed by Sanders and may resist more incremental steps.

At the same time, even more modest moves to build on Medicare or Medicaid will face opposition from hospitals, drugmakers and others in the industry who fear that government health plans would pressure them to accept lower prices.

And no one expects any Democratic plan to go anywhere as long as Congress remains in Republicans’ hands and Trump holds a veto pen.

But in the wake of widespread public rejection of GOP healthcare proposals last year, Democrats see an opportunity to seize the initiative and advance the party’s long-held dream of universal health coverage.

“We’re on offense on healthcare,” said Brad Woodhouse, campaign director for Protect Our Care, an advocacy group formed last year to fight the GOP effort to roll back the 2010 health law. “We need to make healthcare the No. 1 issue.”

Speaking to a recent conference organized by Families USA, a leading national patients’ rights group, Woodhouse cautioned, however, that Democrats must offer voters more than just a defense of the current law.

In recent months, Democratic lawmakers on Capitol Hill have filed a growing number of bills that would expand eligibility for Medicare or Medicaid, which currently limit coverage to qualifying elderly, disabled or poor Americans. The two mammoth government programs are much cheaper than commercial insurance, in large part because they pay hospitals and other medical providers less.

In January, a group of influential liberal health policy experts gathered in Washington to explore these proposals, which typically would allow younger, wealthier consumers to “buy into” one of the two programs.

At the same time, Democratic leaders in several states, including California, New York and New Mexico are exploring state-based initiatives to expand government health plans.

And last week, the Center for American Progress, a leading liberal think tank, released a plan to open up Medicare to all Americans, while still giving workers the option to stick with coverage offered through an employer.

“Democrats have mostly been trying to keep Republicans from repealing the current law,” said Sen. Tim Kaine (D-Va.). “Now we need to come up with the next set of ideas about how to improve coverage and affordability.”

Kaine and Sen. Michael Bennet (D-Colo.) are cosponsoring yet another proposal — which they call Medicare X — for a new government program based on Medicare, particularly for consumers in parts of the country with limited commercial options.

The renewed interest among Democrats in government health insurance has buoyed the hopes of those who support a more ambitious push to create a single public health plan for everyone.

“What has been happening in the last few years is that millions of working people and young people are getting involved in the party … and the grassroots movement is overwhelmingly clear about what it wants from healthcare,” Sanders said in an interview.

“That means that the debate over Medicare-for-all changes, and I think that is what is happening now.”

Indeed, Sanders’ Medicare-for-all bill, which would create a new government plan like Medicare for everyone, has drawn support from nearly every major Democrat in the Senate who is expected to seek the 2020 presidential nomination.

But many Democrats who aspire to something like Sanders’ proposal still worry about the cost and disruptions that would likely be necessary to create a large new government plan for everyone.

“I share the desire for universal coverage,” said Bennet. “The question is what approach is more practical to achieving that objective.”

Nearly a decade ago, Democratic leaders, concerned about the politics of expanding government health plans too aggressively, created the Obamacare insurance marketplaces, which rely on private insurers to provide coverage for Americans who don’t get health benefits through an employer or through a government program.

Democrats even rejected a proposal for a limited government plan to be sold on the marketplaces as a “public option.”

But the ceaseless GOP attacks on the marketplaces, which had been a conservative idea, and the failure of private health insurers to make more affordable plans available — even before Trump took office — has caused more Democrats to back a bigger role for government.

“That is a huge shift,” said Jacob Hacker, a Yale political scientist who helped develop the public option proposal.

Further emboldening Democrats is growing evidence that the public overwhelmingly supports existing government health plans, especially in the face of GOP threats to scale them back.

Eight in 10 Americans held a positive view of Medicare in a recent nationwide poll by the nonprofit Kaiser Family Foundation.

And majorities of both parties favor allowing more people to buy into the program, the survey found.

Medicaid enjoys similarly broad support, with three-quarters of Americans expressing a favorable view.

By contrast, the GOP proposals to roll back the 2010 health law and slash funding for Medicaid were overwhelmingly unpopular, drawing support from just one in five Americans in several nationwide polls.

Even supporters of this emerging Democratic healthcare agenda acknowledge it will take years to develop and may not be fully debated until the campaign for the 2020 Democratic presidential nomination gets underway next year.

But many say it is not too early to begin planning.

“We saw support for Medicaid [during the 2017 GOP repeal push] that took even many longtime Medicaid advocates by surprise,” said Rep. Ben Ray Lujan (D-N.M.), who is sponsoring a proposal with Sen. Brian Schatz (D-Hawaii) to allow people to buy into the Medicaid program.

“There is an opportunity now to build on that momentum,” Lujan said.

 

 

A Big Divergence Is Coming in Health Care Among States

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Little by little, the Trump administration is dismantling elements of the Affordable Care Act and creating a health care system that looks more like the one that preceded it. But some states don’t want to go back and are working to build it back up.

Congress and the Trump administration have reduced Obamacare outreach, weakened benefit requirements, repealed the unpopular individual insurance mandate and broadened opportunities for insurers to offer inexpensive but skimpy plans to more customers.

Last week, the administration released its latest proposal along these lines, by changing the definition of so-called short-term plans. These plans don’t need to follow any of the Obamacare requirements, including popular rules that plans include a standard set of benefits, or cover people with pre-existing conditions. If the rule becomes final, these plans could go from short term to lasting nearly a year or longer.

Taken together, experts say, the administration’s actions will tend to increase the price of health insurance that follows all the Affordable Care Act’s rules and increase the popularity of health plans that cover fewer services. The resultcould be divided markets, where healthier people buy lightly regulated plans that don’t cover much health care, lower earners get highly subsidized Obamacare — and sicker middle-class peopleface escalating costs for insurance with comprehensive benefits.

But not everywhere. Several states are considering whether to adopt their own versions of the individual mandate, Obamacare’s rule that people who can afford insurance should pay a fine if they don’t obtain it. A few are looking to tighten rules for short-term health plans. Some states are investing heavily on Obamacare outreach and marketing, even as the federal government cuts back.

The result is likely to be big differences in health insurance options and coverage, depending on where you live. States that lean into the changes might have more health insurance offerings with small price tags, but ones that are inaccessible to people with health problems and don’t cover major health services, like prescription drugs. States pushing back may see more robust Obamacare markets of highly regulated plans, but the price of those plans is likely to remain higher.

 Legislation to replace the individual mandate has already been introduced in Maryland and New Jersey with prominent sponsors. Political leaders in other states, including California, Washington, Rhode Island, Vermont, Connecticut as well as the District of Columbia, are weighing options for replacing the mandate this year, as Stephanie Armour reported in The Wall Street Journal. The mandate was designed to give healthier people an incentive to buy insurance before they fell ill, lowering the cost of insurance for everyone who buys it.

“Clearly, I think the federal administration and Congress are moving in one direction,” said Brian Feldman, a Maryland state senator who leads the state health subcommittee and was the primary sponsor of mandate legislation there. “And I think states like Maryland would like to move in a different direction.”

Mr. Feldman and his colleagues aren’t planning simply to replicate the federal individual mandate. Instead, they are trying a new strategy. People who fail to obtain insurance would still be charged a fine, but they would be allowed to use that money as a “down payment” on a health plan if they wished. Legislators estimate that many people subject to the penalty would not owe anything more to buy health insurance, after federal tax credits are applied.

Other states are hoping to mimic the expiring federal policy more closely. The board governing the insurance marketplace for the District of Columbia voted last week to recommend the adoption of an individual mandate replacement. Connecticut’s governor, Dannel Malloy, is considering a proposal by a Yale health economist.

Those plans are more similar to the Affordable Care Act’s approach, in part for expedience. The federal mandate is set to expire next year, and insurance companies need to develop their health plans and submit 2019 prices by this summer.

“The idea that a state would be able to stand up something, and put out any guidance, and advise stakeholders, and be able to do it by 2019, is pretty infeasible,” said Jason Levitis, a former Obama administration Treasury Department official who has developed legislation to help states draft mandate replacement bills.

Imposing state-level versions of the mandate may be a political challenge even in blue states. But other strategies are in play, too. California is one of a handful of states considering a bill that would effectively ban the short-term insurance plans proposed by the Trump administration. (New York, New Jersey and Rhode Island already effectively block them.)

A number of states across the political spectrum are also considering policies that would provide so-called reinsurance funds, to help protect health insurers from rare, very expensive patients, and help them lower the prices for everyone else.

Alaska, Minnesota and Oregon have already adopted such plans. Washington, New Jersey, Maine, Colorado, Wisconsin and Maryland are working on proposals. Heather Howard, who directs the state health and values strategies program at Princeton University, said that reinsurance plans operated more like a “carrot” in stabilizing insurance markets. They may prove appealing to a broader array of states, while the mandate, a “stick,” may interest politicians only in the most liberal places.

Some Obamacare-averse states are pursuing policies meant to circumvent the health law’s rules for insurance, and broaden options for cheaper, lightly regulated health plans. Idaho has announced a plan to allow insurers to offer health plans that don’t comply with many of Obamacare’s core rules, and one insurer, Blue Cross of Idaho, has said it will begin selling such plans next month.

Alex Azar, the Health and Human Services secretary, has been cagey about whether he will step in to enforce federal law forbidding such products. Meanwhile, the Iowa legislature is considering a bill that would allow a different type of health plan to circumvent Obamacare rules, as The Des Moines Register recently reported. Medica, the only insurer currently offering Obamacare plans, said it might depart the Iowa market if the plan were approved.

The Affordable Care Act was drafted with room for state customization, but one of its primary goals was to make health insurance around the country more uniform. Thanks to state resistance to the health law, varying local conditions and a Supreme Court decision that made the Medicaid expansion optional, results have been much more uneven. Some states have seen much bigger reductions in the share of the uninsured than others. Only some states have seen insurance premiums stabilize.

“Without question I think we’re going to see a natural experiment in the states and a growing divergence in outcomes,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute.

Evidence of that divergence is already here. This year, signups for Affordable Care Act health plans were nearly flat compared with last year, despite huge cuts in federal outreach and advertisement. But states that ran their marketplaces and spent heavily on advertising saw stronger signups, while states that were more resistant to the health law experienced drops. The loss of the mandate, and the proliferation of health plans that don’t follow Obamacare’s rules, are likely to widen those gulfs.

 

 

20 states sue over Obamacare mandate — again

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https://www.politico.com/story/2018/02/26/20-state-sue-over-obamacare-again-425825

A man is pictured entering health insurance exchange center. | Getty

Twenty states are suing the Trump administration over Obamacare’s individual mandate — again.

Wisconsin, Texas and several other red states said in a lawsuit filed today that since Congress repealed the individual mandate’s tax penalty for not having coverage, that means the mandate itself — and the whole health care law — is invalid.

The GOP tax law “eliminated the tax penalty of the ACA, without eliminating the mandate itself,” the states argue in a complaint filed today in U.S. District Court in the Northern District of Texas. “What remains, then, is the individual mandate, without any accompanying exercise of Congress’s taxing power, which the Supreme Court already held that Congress has no authority to enact.”

The Supreme Court in 2012 upheld Obamacare’s individual mandate in one of the highest-profile court cases in years. The justices did not agree then with the Obama administration’s main argument that the mandate penalty was valid under the Commerce Clause. But the justices did say that the mandate was a constitutional tax. The ruling riled conservatives who felt that Chief Justice John Roberts bent legal reasoning to preserve Obamacare.

Now, the states want to use that same Supreme Court ruling to take down the Affordable Care Act — which has withstood numerous legal challenges but which over the past year has been undermined by executive and regulatory actions the Trump administration has taken.

The states also argue that since the mandate is unconstitutional, the whole law should go. They note that Obamacare did not have a “severability clause” — a provision that says if one part of the law is struck by the courts, the rest would stand — so that once part of it is struck down, the rest in invalid.

 

 

Enabling Sustainable Investment in Social Interventions: A Review of Medicaid Managed Care Rate-Setting Tools

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http://www.commonwealthfund.org/publications/fund-reports/2018/jan/social-inteventions-medicaid-managed-care-rate-setting#/utm_source=social-inteventions-medicaid-managed-care-rate-setting&utm_medium=Facebook&utm_campaign=Delivery%20System%20Reform

Abstract

  • Issue: It is widely recognized that social factors, such as unstable housing and lack of healthy food, have a substantial impact on health outcomes and spending, particularly with respect to lower-income populations. For Medicaid, now dominated by managed care, this raises the question of how states can establish managed care rates to sustain investments in social supports.
  • Goal: To explore practical strategies that states can deploy to support Medicaid managed care plans and their network providers in addressing social issues.
  • Methods: Literature review, interviews with stakeholders, and analysis of federal regulations.
  • Findings and Conclusions: We identify the following options: 1) classify certain social services as covered benefits under the state’s Medicaid plan; 2) explore the additional flexibility afforded states through Section 1115 waivers; 3) use value-based payments to support provider investment in social interventions; 4) use incentives and withholds to encourage plan investment in social interventions; 5) integrate efforts to address social issues into quality improvement activities; and 6) reward plans through higher rates for effective investments in social interventions. More needs to be done, however, to assist interested states in using these options and identifying pathways to braid Medicaid dollars with other social services funding.

Introduction

Exhibit 1

State Options and Considerations

1. Classify certain social services as covered benefits under the state’s Medicaid plan

2. Explore the additional flexibility afforded states through Section 1115 waivers

3. Use value-based payment to support investment in social interventions

4. Use incentives and withholds to encourage plan investment in social interventions

5. Integrate efforts to address social issues into quality improvement activities

6. Reward plans with effective investments in social interventions with higher rates

It is now widely recognized that social factors, such as unstable housing, lack of healthy food, unsafe neighborhoods, and unemployment, have a substantial impact on health care outcomes and spending, particularly with respect to lower-income populations.1 Moreover, there is an emerging body of research on which interventions are most likely to result in better outcomes and reductions in spending.2 As the nation’s largest payer for health care services for low-income populations, many of whom have substantial social service needs, Medicaid is front and center when it comes to these issues. State Medicaid agencies are increasingly focusing on how the program can cover and reimburse for nonclinical interventions, particularly in managed care, now the dominant service delivery model in Medicaid.

This report identifies practical strategies that states can deploy to support Medicaid managed care plans and their network providers in addressing social issues. Based on a literature review and on interviews with state officials, health plan leaders, actuarial experts, and other stakeholders, we identify options for states to consider if they are interested in incorporating the cost of social interventions into Medicaid managed care rates (Exhibit 1). While the strategies do not represent a comprehensive solution to the issue of Medicaid’s role in addressing social issues, they are an essential building block.

Background

States face several questions about what role they want Medicaid to play in addressing social issues that directly affect the health of Medicaid beneficiaries and the cost of serving them. Do they want to move their Medicaid programs beyond paying for medical services to tackling affordable housing, economic insecurity, unsafe neighborhoods, and access to adequate and healthy food? In some states, the priority is finding more effective ways to deliver traditional medical care. Other states, particularly those that have implemented an expansion of coverage to low-income adults or are adopting a population health approach to their Medicaid programs, look to their managed care plans and providers to address such issues (Exhibit 2). In all cases, states must evaluate the extent to which federal Medicaid rules permit coverage and payment for discrete nonclinical services.

Exhibit 2

Medicaid Expansion: Implications for the Importance of Addressing Social Determinants of Health

In the states that expanded their Medicaid programs to all adults with incomes below 138 percent of the federal poverty level (31, plus the District of Columbia), newly eligible adults often have extensive social needs. According to research from the Medicaid and Children’s Health Insurance Program Payment and Access Commission, 70 percent are below the federal poverty level, but, even so, only about half receive benefits from the Supplemental Nutrition Assistance Program.a In our interviews with Medicaid directors in expansion states, they reported that gaining these new enrollees has reinforced the importance of Medicaid addressing social issues: first, because of the relatively high prevalence of mental illness and substance abuse among the population,b and second, because of Medicaid’s increasingly important role in the coverage and care of low-income families. Finally, interviewees noted that, as Medicaid coverage became more stable and states and managed care plans began to implement value-based payment policies, plans and providers were better positioned to address the social needs of their enrollees and patients.

Rate-Setting Tools in Context

A Medicaid managed care financing and payment strategy is an essential element, but far from the only required element, of any approach to use Medicaid as a vehicle for addressing social determinants of health. During our interviews, we consistently heard that while there is strong interest in innovative rate-setting options, states have many other challenges they need to tackle for Medicaid to play a role in addressing social issues. These other challenges include the need for more staff with different skills, such as social service experience or actuarial proficiency; a data infrastructure to identify and address social factors; and sufficient time and resources for plans and providers to prepare to address social issues (see Appendix D). While these are important issues, they are not the focus of this report, which addresses options available to states for creating a payment and managed care contracting strategy that supports investments in social interventions.

Medicaid Managed Care Rate-Setting: Rules, Policies, and Procedures

The question at the center of this analysis is how states can support plan investment in social services that improve health outcomes and are cost-effective. In states with Medicaid managed care, this translates into a question of how to set Medicaid managed care capitation rates in such a way that plans are incentivized or required — and, even more importantly, have the resources — to address social issues that directly affect the health outcomes of their members.

The starting point for answering this question is the federal Medicaid managed care rules that require states to ensure that capitation rates are actuarially sound. This means that rates must be sufficient to cover the costs that plans incur to provide covered benefits to their enrollees, as well as related administrative and operational expenses. Notably, capitation rates must be based only on services covered under the state plan and services necessary to achieve mental health parity requirements.3 In other words, states cannot directly build the cost of social support services not covered under the state plan into their capitation rates (Exhibit 3).4

 

UPDATE: CMS seeks expansion of short-term plans to sidestep ACA

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https://www.healthcaredive.com/news/cms-seeks-expansion-of-aca-skirting-short-term-plans/517399/

Image result for Out of Pocket expenses

Dive Brief:

  • HHS issued a proposed rule on Tuesday that expands the availability of short-term health insurance by allowing the purchase of plans providing coverage for up to 12 months, the latest in the Trump administration’s plans to weaken the Affordable Care Act. The action builds off a request for information by HHS last June on ways to increase affordability of health insurance.
  • The current maximum period for such plans is less than three months, a change made by the Obama administration in 2016. The proposed rule would mark a return to the pre-2016 era, but CMS noted that it is seeking comment on offering short-term plans for periods longer than 12 months.
  • Short-term plans are not required to comply with federal rules for individual health insurance under the ACA, so the plans could charge more for those with preexisting conditions and not provide what the ACA deemed essential health benefits like maternity care.

Dive Insight:

The proposed rule builds off of an executive order President Donald Trump signed in October, which instructed the federal government to explore more access to association health plans, expanding short-term limited duration plans and changes to health reimbursement arrangements or HRAs.

Consumers buying these short-terms plans could lose access to certain healthcare services and providers and experience an increase in out-of-pocket expenditures for some patients, according to the proposal.

The short-term plans “would be unlikely to include all the elements of ACA-compliant plans, such as the preexisting condition exclusion prohibition, coverage of essential health benefits without annual or lifetime dollar limits, preventive care, maternity and prescription drug coverage, rating restrictions and guaranteed renewability,” according to the proposed rule.

The Trump administration argues that expanding access to short-term plans is increasingly important due to rising premiums in the individual markets.

But if young and healthy people leave the individual market for short-term plans, it could contribute to an unbalanced risk pool. HHS itself states that the exodus of young and healthy exchange members could contribute to rising premiums within the ACA exchange markets.

“If individual market single risk pools change as a result, it would result in an increase in premiums for the individuals remaining in those risk pools,” the proposed rule stated.

But when asked about concerns that the idea might hurt the stability of the ACA marketplaces by siphoning healthy people away, CMS Administrator Seema Verma argued there would be little impact.

“No, we don’t think there’s any validity to that — based on our projections only a very small number of healthy people will shift from the individual market to these short-term limited duration plans. Specifically, we estimate that only 100,000 to 200,000 people will shift. And this shift will have will have virtually no impact on the individual market premiums,” Verma said on a press call.

But the insurance lobby cautioned that the action could increase insurance prices for the most vulnerable.

The American Hospital Association and Association for Community Affiliated Plans also slammed the short-term plans, saying they would increase the cost of comprehensive coverage.

“Short-term, limited-duration health plans have a role for consumers who experience gaps in coverage. They are not unlike the small spare tire in a car: they get the job done for short periods of time, but they have severe limitations and you’ll get in trouble if you drive too fast on them,” ACAP CEO Margaret Murray said in a statement.

“While we are reviewing the proposed rule to understand its impact on the people we serve, we remain concerned that expanded use of short-term policies could further fragment the individual market, which would lead to higher premiums for many consumers, particularly those with pre-existing conditions,” said Kristine Grow, SVP of communications at America’s Health Insurance Plans.

HHS anticipates most individuals switching from individual market plans to short-term coverage plans would be relatively young or healthy and not eligible to receive ACA’s premium tax credits.

CMS said the proposal is one to help the 28 million Americans without health insurance, pointing to the 6.7 million who chose to pay the individual mandate penalty in 2015 as evidence that ACA-compliant plans are too expensive.

“In a market that is experiencing double-digit rate increases, allowing short-term, limited-duration insurance to cover longer periods gives Americans options and could be the difference between someone getting coverage or going without coverage at all,” Verma said in a statement.

Senate HELP Committee Chair Lamar Alexander, R-Tenn., praised the action, but cautioned that states still have a responsibility to protect consumers.

“Millions of Americans who are between jobs and who pay for their own insurance will welcome this extended option for lower-cost, short-term policies. States will have the responsibility for making sure these policies benefit consumers,” Alexander said in a statement.

Democrats largely oppose the move, arguing it will further destabilize the market for millions of Americans in the ACA exchanges. “Widespread marketing of these bare bones, junk plans will further destabilize health insurance markets, and will lead to higher premiums for everyone,” a group of House Democrats said in a joint statement.

As Republicans are not likely to take up ACA repeal again any time soon, the Trump administration has been working to pare back the law in the past several months. It halved the enrollment period and stopped paying cost-sharing reduction payments to insurers. Also, the recent tax overhaul included a repeal of the law’s requirement that most people have coverage.

California confronts the complexities of creating a single-payer healthcare system

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http://www.latimes.com/business/hiltzik/la-fi-hiltzik-singlepayer-20180209-story.html

California confronts the complexities of creating a single-payer healthcare system

California Assembly Speaker Anthony Rendon may have expected to torpedo the idea of a statewide single-payer healthcare system for the long term last June, when he blocked a Senate bill on the issue from even receiving a hearing in his house.

He was wrong, of course. His shelving of the Senate bill created a political uproar (including the threat of a recall effort), forcing him to create a special committee to examine the possibility of achieving universal health coverage in the state. On Monday and Wednesday, the Select Committee on Health Care Delivery Systems and Universal Coverage held its final hearings.

The panel ended up where it started, with the recognition that the project is hellishly complex and politically daunting but still worthwhile — yet can’t happen overnight. “I’m anxious to see what it is that we can actually be working on this year,” committee Co-Chair Jim Wood (D-Healdsburg) said toward the end of Wednesday’s seven-hour session. “Some of the logistics and the challenges we have to deal with are multiyear challenges.”

The No. 1 experience missing from the American healthcare system is peace of mind.

Little has changed since last year, when a measure sponsored by the California Nurses Assn., SB 562, passed the Senate in June and was killed by Rendon (D-Paramount) in the Assembly. The same bill, aimed at universal coverage for all residents of the state, including undocumented immigrants, is the subject of the select committee’s hearings and the template for statewide reform.

Backers of the Healthy California program envisioned by the bill feel as if they’re in a race with federal officials intent on dismantling healthcare reforms attained with the Affordable Care Act, and even those dating from the 1960s with enactment of Medicare and Medicaid.

In just the last few weeks, the U.S. Department of Health and Human Services has approved adding a work requirement to Medicaid in Kentucky and begun considering a plan to place lifetime limits on Medicaid benefits — profound changes in a program traditionally aimed at bringing healthcare to needy families.

The Republican-controlled Congress effectively repealed the individual mandate in the Affordable Care Act. That is likely to drive up premiums for unsubsidized middle-income insurance buyers and has prompted California and other states to consider implementing such a mandate on their own. (Idaho is moving distinctly in the opposite direction from California, proposing to allow “state-based health plans” that allow insurers to discriminate against applicants with pre-existing conditions.

Healthy California would be the most far-reaching single-state project for universal health coverage in the nation. That’s to be expected, since the state’s nation-leading population (39 million) and gross domestic product ($2.6 trillion) provide the impetus to solve big social and economic issues on its own.

The program would take over responsibility for almost all medical spending in the state, including federal programs such as Medicare and Medicaid, employer-sponsored health plans, and Affordable Care Act plans. It would relieve employers, their workers and buyers in the individual market of premiums, deductibles and co-pays, paying the costs out of a state fund.

All California residents would be eligible to obtain treatment from any licensed doctor in the state. Dental and vision care and prescription drugs would be included. Insurance companies would be barred from replicating any services offered by the program.

Doctors and hospitals would be paid rates roughly analogous to Medicare reimbursements, and the program would be expected to negotiate prices with providers and pharmaceutical companies, presumably by offering them access to more than 39 million potential patients.

Wood stressed that the goal of reform is to lower healthcare prices, or at least to slow the rate of growth. Yet that may mean focusing on the wrong challenge.

The mechanics of cost reduction aren’t much of a mystery. As several witnesses at the latest hearings observed, the key is reducing unit prices — lower prices per dose of drug, lower reimbursements for physicians and hospitals, all of which are higher in the U.S. than the average among industrialized countries. It will also help to remove insurance industry profit and overhead (an estimated 15% of healthcare spending), not to mention the expenses they impose on billing departments at medical offices and hospitals, from the system.

The real challenge, however, lies in the politics of transitioning to a new healthcare system. Advocates of reform often overlook an important aspect of how Americans view the existing system. Although it’s roundly cursed in the abstract, most people are reasonably satisfied with their coverage.

 

That’s because most people seldom or never experience difficult or costly interactions with the healthcare system. Horror stories of treatments denied and astronomical bills charged are legion. But the truth is that annual healthcare spending is very heavily concentrated among a small number of people.

The top 5% of spenders account for half of all spending, the top 20% of spenders for about 80%. According to the National Institute for Health Care Management, the bottom 50% of spenders account for only about 3% of all spending.

These are annual figures, so over a lifetime any person may have more contacts with the system. But that may explain why it’s hard to persuade Americans to abandon a system many consider to be just good enough for something entirely new, replete with possibilities that it could turn out to be worse.

The nurses association is pegging its reform campaign to the uncertainties built into the existing system. “The experience of most Americans is that they’re satisfied with what they’re getting, but there’s a great deal of anxiety,” says Michael Lighty, the group’s director of public policy. “The No. 1 experience missing from the American healthcare system is peace of mind. People are not afraid that what they have will be taken away, but that what they have will not be adequate for what they need.”

In terms of funding, the idea is for the state to take over the $370 billion to $400 billion a year already spent on healthcare in California. (The higher estimate is from the state Legislative Analyst’s Office, the lower from the nurses association.) That includes $200 billion in federal funds, chiefly Medicare, Medicaid, and Obamacare subsidies; and an additional $150 billion to $200 billion in premiums for employer insurance and private plans and out-of-pocket spending by families.

University of Massachusetts economist Robert Pollin, the nurses’ program consultant, estimates that the program will be about 18% cheaper than existing health plans, thanks to administrative savings, lower fees for drugs, physicians, and hospitals, and a step up in preventive services and a step down in unnecessary treatments.

That would leave about $106 billion a year, as of 2017, needed to replace the employer and private spending that would be eliminated. Pollin suggests doing so through an increase of 2.3% in the sales tax and the addition of a 2.3% gross receipts tax on businesses (or a 3.3% payroll tax, shared by employers and workers), instead of the gross receipts tax. Each levy would include exemptions for small businesses and low-income families.

Anyone with experience in California tax politics knows this is a potential brick wall. Taxes of this magnitude will generate intense opposition, despite the nurses’ argument that relief from premiums and other charges means that families and business will come out ahead.

But that’s not the only obstacle. A workaround would have to be found for California Constitution requirements that a portion of tax revenues be devoted to education. A California universal coverage plan would require “a high degree of collaboration between the federal government and the state,” Juliette Cubanski of the Kaiser Family Foundation told the committee Monday. Waivers from Medicare and Medicaid rules would have to be secured from the Department of Health and Human Services; redirecting Medicare funds to the state might require congressional approval.

A federal law that preempts state regulations of employee health benefits might limit how much California could do to force employer plans into a state system.

Obtaining the legal waivers needed from the federal government to give the state access to federal funds would take two to three years “with a friendly administration,” Wood said. “We don’t have a friendly administration now.”

Advocates of change are understandably impatient in the face of rising healthcare costs and the federal government’s hostility to reform. Shocked gasps went up from the hearing audience Wednesday when Wood casually remarked, “It is absolutely imperative that we slow this down.” Startled by the reaction, he quickly specified that he meant “slow the costs down.”

The desire to pursue the goal of universal coverage, whether through a single-payer model or a hybrid, plainly remains strong in Sacramento, in the face of the vacuum created by the Republican Congress and Trump White House.

As Betsy Estudillo, a senior policy manager for the California Immigrant Policy Center put it at Wednesday’s hearing, “The nation needs California’s leadership, now more than ever.”

 

Interpreting National Health Expenditure Projections: Issues And Challenges

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https://www.healthaffairs.org/do/10.1377/hblog20180214.597384/full/

Health Affairs today published the projections for health spending over the next decade from the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary. The top line estimate is that health spending will grow at 5.5 percent per year through 2026. This rate is about halfway between the pre-recession rate of 7.3 percent and the exceptionally low rate (3.8 percent) experienced during the recession and immediate aftermath. This projected spending growth is 1 percentage point above expected gross domestic product (GDP) growth, a smaller gap than for almost any 10-year period since 1990. These non-partisan, thorough projections are a valuable benchmark for all stakeholders anticipating the fiscal footprint of the health care system on the economy, but there are several important issues to keep in mind.

Modeling What Spending Would Be Under Current Law, Not What It Will Most Likely Be

First, these projections are predicated on “current law”. The authors are not trying to predict what spending will most likely be. Such a prediction exercise would require assessments of how policy may change. For example, will the low-fee trajectories called for by the Medicare Access and CHIP Reauthorization Act (MACRA) and the Affordable Care Act (ACA) productivity adjustments be realized? What will be the future of the ACA? The authors here don’t attempt to incorporate the answers to these questions. They assume that the current law will persist. Last week’s budget legislation, which included the repeal of the Medicare Independent Payment Advisory Board and other health care changes, illustrates this point because it came too late to be included in these projections. This highlights how quickly and unpredictably law and policy can change.

An Uncertain Environment

Second, as the authors recognize, there is considerable uncertainty around these projections. During the recession, we experienced a dramatic slowdown in the rate of growth in “use and intensity” of care, a catch-all phrase capturing more physician visits, hospital stays, lab tests, etc. As the ACA was implemented, use and intensity rebounded, capturing both a return to a more common rate of growth and an increase attributable to coverage expansion. (If there is one thing we know well it is that greater coverage generates greater utilization.)

The assumption moving forward is that use and intensity will revert to historical patterns, affected a bit by benefit design changes. The impact of payment reforms, in both the public and private sector, is largely not reflected in these projections. That assumption is certainly reasonable given the modest impact of such changes to date, but payment systems continue to change and their impacts may grow, suggesting that perhaps use and intensity growth will be lower than projected.

Of course, uncertainty is not one sided. Other hypotheses, such as greater introduction of new technologies or weakening commitment to controlling utilization, would yield higher spending projections.

The Policies We Choose Matter

Third, and perhaps most importantly, the actual rate of health spending growth that we experience over the next decade, and beyond, depends on what we do. Health spending is not a natural phenomenon to be predicted like the tides. Our fate is not sealed. Our actions matter. We should not ask whether health spending growth will accelerate (or not). Instead we should ask if we will let it accelerate (or not). This requires complex choices.

It is tempting to read the projections such as those by Gigi Cuckler and her CMS colleagues with alarm. The notion that health care will consume almost 20 percent of the economy in 2026 is legitimately concerning because of the implications for future taxation or borrowing to maintain publicly financed health insurance programs. In fact, Kate Baicker and Jon Skinner predicted back in 2011 that if public health spending growth consistently exceeded national income growth by 1 percentage point and was financed by taxes (increased proportionately on all income groups), the tax rate for the upper income bracket in 2060 would need to rise to 70 percent. This is unlikely to happen, but we must act to make sure it does not.

The Dual Nature Of Health Spending: Consumption And Investment

The challenge, of course, is that health spending, on average, improves health. Therefore, actions to restrain resources devoted to health—including restricting access to health care or health insurance—run the risk of slowing or reversing improvements in health. Moreover, apart from the obvious benefit associated with access to health care services, many people rely on the health care sector for jobs. Heath care is in many ways both a tapeworm on the American economy and a Keynesian stimulus— cutting health spending will have economic consequences. Moreover, while creating jobs is not a justification for waste, lower spending growth can imply lower revenue growth for health care stakeholders, which presents a significant political problem.

These two perspectives are not as hard to balance as one may think. We do not need to cut heath care spending below current levels, just slow the rate of its growth. Moreover, resources not absorbed into the health care sector can be put to valued activities. (If there are not more valued activities for these incremental resources, then more spending on health care is justified).

Beyond How Much We Spend: Does It Bring Value And How Will We Finance It?

Finally, all of this highlights the heterogeneity in value associated with greater health spending. We currently pay higher prices in the United States than in other countries. While health care price inflation slowed between 2014 and 2016, the projections assume that price growth in health care will exceed general inflation. While we cannot conclude that prices in the United States should match those in other countries (there are many differences in our economies), much of the reason for high and growing prices in the United States is a lack of competition associated with consolidation in the health care sector (largely in the commercial sector) and other institutional features. Paying too much for care or other services not only distorts behavior, but also represents a transfer from the broad population to the health care sector. Policy actions to address this issue should be high on the agenda.

Use and intensity also varies in value. While innovation and delivery of appropriate care is the centerpiece of a high-value health care system, our system too often provides care that offers little or no health benefit. Great strides have been made to quantify low value care, through initiatives such as Choosing Wisely, but a lot remains unmeasured. Eliminating such care is hard because the value of care depends on patient traits and delivery system reform requires motivation of influential and invested stakeholders, which does not occur rapidly. Nevertheless, efforts to move in this direction are important.

Ultimately, the question we should ask when we ponder projections of higher health spending is this: Will we get enough value for the added spending? We should also ask how we should finance this spending: Any way we do so—through taxation, higher premiums or cost sharing at the point of service—has dramatic distributional and moral implications.

There are no simple answers to these questions, politically or operationally. One thing is clear: We cannot continue to publicly finance health spending if it grows 1 percentage point faster than GDP. We are not in crisis yet, but at this rate, eventually we will be. Yet, changing health care takes time. Many innovations in both payment and benefit design show promise, but success is uncertain. With luck (or more importantly dedication and hard work) we will be able to spend less than these projections suggest and maintain, or even improve, the care delivered to Americans. Unless we keep trying, however, we will fail.

 

 

Will Federal Courts Uphold Trump Administration Medicaid Waiver Approvals?

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https://www.healthaffairs.org/do/10.1377/hblog20180213.18720/full/

Court decisions are likely to have an enormous impact on the future of the Medicaid program. On January 12, the Centers for Medicare and Medicaid Services (CMS) announced approval of a Medicaid demonstration waiver in Kentucky incorporating unprecedented restrictions on Medicaid eligibility for adults. These restrictions have been summarized by Sara Rosenbaum on Health Affairs Blog in the context of a powerful review of Medicaid demonstration law and policy. Kentucky’s new waiver includes not only a highly publicized “work/community engagement” requirement, but additional elements new to Medicaid including lockouts for beneficiaries who do not complete the annual renewal process or who fail to report changes in income.

Twelve days after the CMS approval announcement, the Kentucky Equal Justice Center, the Southern Poverty Law Center, and the National Health Law Program filed suit to stop the waiver in U.S. District Court for the District of Columbia, representing 15 Medicaid beneficiaries in Kentucky. Similar lawsuits are virtually certain as Medicaid waivers imposing new coverage and benefits restrictions on adults are approved in Indiana and likely other states.

Why The Current Round Of 1115 Waivers Are Different

As noted by Sara Rosenbaum, Nicholas Bagley, and others, there is a limited history of federal lawsuits challenging Medicaid section 1115 demonstrations. But it is important to note the reason there have been few of these legal challenges: until 2018, over its 50-plus year history, Medicaid waiver authority was almost exclusively used to expand Medicaid eligibility and benefits rather than to restrict them, or to try a different approach to delivering existing benefits. When I oversaw Medicaid 1115 waiver review from 2013 to early 2017, the Obama administration agreed to try a variety of conservative ideas under Medicaid waiver authority for the Affordable Care Act (ACA) adult expansion population. But each of these ideas was tied into a good faith hypothesis about potential improved access or benefits within the Medicaid program. Premiums were to be tested as an alternative to cost-sharing in some states or in combined premium/cost-sharing approaches that sought to encourage and incentivize healthy behaviors; private marketplace plan networks were to be tested and evaluated as an alternative to traditional Medicaid providers; the impact of the Non-Emergency Medical Transportation benefit on unmet need would be measured closely to see if eliminating the benefit helped or hurt self-reported access to care.

The approvals in Kentucky and Indiana, and possible pending approvals in other states, base their legal claim to be promoting the objectives of the Medicaid program on a far more brazen and cynical premise. The waiver approvals assert that taking away Medicaid from statutorily eligible individuals can act as an incentive that ultimately improves health: either by forcing the beneficiary to get a job to stay insured in the case of work requirements, or by “educating beneficiaries on enrollment requirements” in the case of lockouts from eligibility for beneficiaries who fail to complete an annual renewal or inform the state of income changes.

Because the hypothesized Medicaid objectives are so dubious, a lot more than these specific waiver requests rests on the plaintiffs’ case in these states. At risk are not only specific Medicaid eligibility principles, but the entire statutory enterprise of congressional legislation of mandatory Medicaid eligibility or benefits of any kind. Consider what it would mean for Medicaid law were the justifications upheld: if waivers can overturn congressional Medicaid eligibility guarantees and claim to promote Medicaid objectives because Medicaid itself is a barrier to health, or because cutting off eligibility is a way to teach people about private insurance or enforce compliance with new extra-statutory eligibility requirements, then there is no meaningful legal limit on state waivers of federal Medicaid eligibility law. Congress’s ability—in place since 1965 and upheld in hundreds of federal court decisions—to mandate that state Medicaid agencies cover specific categories of individuals for specific periods of time and with specific benefits will be subject to an extra-statutory waiver process in toto.

Will courts allow it anyway? After all, section 1115(a) defining the scope of the demonstration authority specifically references “the judgment of the Secretary”, suggesting executive branch latitude.

Will Courts Overturn Work Requirements?

But there are a number of important legal and contextual factors that point to court action to overturn these waiver approvals. First, the work requirement component of these waivers is a particularly blatant attempt to achieve under waiver authority what could not be achieved via statutory change. Both the House and primary Senate version of “repeal and replace” 2017 included state options to impose work requirements in Medicaid. These efforts—in a rather high-profile manner—failed to pass Congress. Courts will be considering the tactic of the executive branch trying to change the Medicaid program via demonstration waivers when it failed to change the law.

Second, the primary federal court precedent for judicial review of Medicaid section 1115 demonstrations sets a high bar for legal scrutiny. Although (as summarized by Nicholas Bagley) the courts historically authorized some restrictive state section 1115 waivers with regard to Aid to Families with Dependent Children (AFDC) cash welfare in the name of supporting transitions to independence, these decisions were tied to a statutory framework for the AFDC program that itself supported transitions to work as an explicit goal beginning in the 1960s. This is not true when it comes to Medicaid: Medicaid’s statutory framework is as an ongoing health insurance program, and it now covers 70 million people, many times the enrollment level in AFDC/Temporary Assistance for Needy Families (TANF) over its history. And the limited court challenges to Medicaid section 1115 waivers have had a high success rate, with courts insisting that not only meet the “promote Medicaid objectives” standard but that they meet an additional level of scrutiny regarding research or experimental value relative to the health policy literature. Strikingly, the court in Newton-Nations v. Betlach—the primary precedent for Medicaid waiver judicial review—approvingly cited expert testimony on the health policy literature as evidence for why further research on cost-sharing was not needed. If judges are citing literature reviews to question whether waiver hypotheses involve groundbreaking experiments, that does not indicate a high degree of judicial deference.

Third, we have had strong indications in the last year that federal courts are not working with an assumption of good faith in stated agency rationales, particularly when significant published information from Trump administration leaders contradicts those ostensible public rationales. Judicial skepticism has extended from presidential tweets cited as evidence of discriminatory intent in immigration cases, to asserting “invidious partisan intent” in drawing of voting districts. And the Trump administration has made abundantly clear that its reasons for supporting restrictions on adult Medicaid enrollment have nothing to do with health: CMS Administrator Seema Verma has repeatedly stated her broad opposition to Medicaid coverage of low-income non-disabled adults as such, and the Trump administration worked vigorously to undo the Medicaid expansion during the ACA repeal effort in Congress.

Fourth, the fact that states are pairing work requirement waivers with other extra-statutory restrictions on Medicaid eligibility undermines whatever health claims they are making regarding the work requirement. With the exception of Mississippi—a state with Medicaid income eligibility levels for adults that are so low virtually no employed adults qualify—every state that has proposed a work requirement has also proposed to waive Medicaid law in other ways to take away coverage. Kentucky’s and Indiana’s new “lockout” provisions that will bar people from Medicaid for six months if they fail to report a change in income or if they fail to submit an annual redetermination of eligibility will likely lead to dramatic reductions in Medicaid coverage, given the high rates of enrollment churn associated with Medicaid’s unique annual redetermination requirements. States that are trying to cut Medicaid coverage for adults in multiple ways and a federal Administration that opposes Medicaid coverage of non-disabled adults would appear to be attacking Medicaid coverage of adults any way they can. They will not make for persuasive exponents of the health benefits of work requirements.

The pending litigation will be the first time the courts have thoroughly defined the scope of executive branch section 1115 waiver authority in Medicaid. As a matter of law and policy, one way or another this important part of the Medicaid program and the American health system will likely be changed by the time the federal courts have completed their adjudication. Many thousands of lives will be at stake. But with multiple judicial imperatives at stake as well, there is good reason to expect that the courts will step in.