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?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

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.

 

 

 

Trump continues his war on Americans’ health care to pay for his tax cuts

https://www.americanprogress.org/issues/economy/news/2019/03/11/467108/trumps-fy-2020-budget-exposes-false-promises-misplaced-priorities/

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After repeatedly trying and failing to repeal the ACA legislatively, President Trump and congressional Republicans have resorted to attacking and weakening the law through executive action, federal waivers to the states to undermine Medicaid expansion, and budget proposals to gut funding levels.

Once again, Trump’s budget proposes massive cuts—$777 billion over 10 years—from repealing the ACA and slashing Medicaid.

Like in his previous two budgets, Trump goes beyond these two measures to attack traditional Medicaid, seeking to restrict federal funding on a per-beneficiary basis or transition to block grant funding. Both of these things would lead to a significant decrease in federal funding and could cause millions of people to lose their health care coverage.

Like in last year’s budget, he encourages states to take Medicaid away from jobless and underemployed Americans, including laid-off workers, people who are going to school, and those who are taking care of children or family members. Medicaid is a lifeline for millions of Americans—including children, veterans, people with disabilities, and individuals affected by the opioid crisis. Tearing down this vital program will make it more difficult for people to access the health care they need to find work, including by preventing people with disabilities from accessing the long-term services and supports they need to participate in the labor market.

After he repeatedly promised to protect Medicare as a candidate, Trump makes changes to Medicare that would shrink the program by $845 billion over the coming decade.

 

 

 

How Kennedy’s SCOTUS Replacement Could Open the Door to Medicaid Cuts

http://www.thefiscaltimes.com/2018/07/03/How-Kennedy-s-SCOTUS-Replacement-Could-Open-Door-Medicaid-Cuts

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Axios’ Caitlin Owens says the next Supreme Court justice could give states more power to cut Medicaid. The legal issue in question is whether private health care providers can sue over Medicaid payment rates. The Supreme Court ruled in 1990 that they could, and Anthony Kennedy dissented in that case — but took less of a hard-line stance than other conservatives. He “was willing to leave the courthouse doors open in Medicaid cases, whereas the conservative majority is willing to shut it – I mean, really slam it,” Sara Rosenbaum, a George Washington University law professor, told Axios.

Kennedy’s replacement could provide a fifth vote to prevent private providers from suing, giving states plenty of leeway to make cuts to their Medicaid programs without the threat of legal action.

Owens notes that Kansas and Louisiana have asked the Supreme Court to consider whether they can exclude Planned Parenthood from their Medicaid programs, and whether the group can challenge that exclusion.

 

 

Plan to Cut $15B in Spending Squeaks Through House

https://www.usnews.com/news/politics/articles/2018-06-07/house-takes-up-trump-sponsored-plan-to-cut-15b-in-spending

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The House on Thursday only narrowly passed a White House plan to cut almost $15 billion in unused government money, a closer-than-expected tally on legislation that’s designed to demonstrate fiscal discipline in Washington even though it wouldn’t have much of an impact on spiraling deficits.

The measure, which passed 210-206, would take a mostly symbolic whack at government spending because it would basically eliminate leftover funding that wouldn’t have been spent anyway. The bill now goes to the Senate, where it faces long odds.

The deficit is on track to exceed $800 billion this year despite a strong economy. Republicans controlling Congress are not attempting to pass a budget this year.

The package of so-called rescissions has been embraced by GOP conservatives upset by passage in March of a $1.3 trillion catchall spending bill that they say was too bloated. More pragmatic Republicans on Capitol Hill’s powerful Appropriations panels aren’t keen on the measure since it would eliminate accounting moves they routinely use to pay for spending elsewhere.

The measure includes $4 billion in cuts to a defunct loan program designed to boost fuel-efficient, advanced-technology vehicles, rescissions of various agriculture grant programs, and cuts to conservation programs at the Department of Agriculture, among others.

While Democrats blasted the cuts, the real objection to some of them, such as $7 billion from popular Children’s Health Insurance Program funding, is that it would take that money off the table so it couldn’t be used later as it was in the earlier spending bill. The CHIP cuts wouldn’t affect enrollment in the program, which provides health care to children from low-income families that don’t qualify for Medicaid.

“Targeting CHIP for a rescission prevents Congress from reinvesting in other priorities like child and maternal health, early childhood education, biomedical research and our community health centers,” said New York Rep. Nita Lowey, the top Democrat on the Appropriations Committee.

Some GOP moderates also worry that they’re casting a difficult-to-explain vote to cut CHIP funding in the run-up to November’s midterm elections.

“I don’t think the vote’s intended for people in swing districts,” said Rep. Ryan Costello, R-Pa. Nineteen Republicans, mostly moderates, opposed the bill. No Democrats voted for it.

President Donald Trump is the first President to employ the so-called rescissions tool since the Clinton administration. The obscure process is one of the few ways around the Senate filibuster, though other parliamentary problems could await in that chamber — even if resistance from moderates and Republicans on the Appropriations Committee can be overcome.

The nonpartisan Congressional Budget Office weighed in Thursday to estimate that the measure — pushed largely by White House budget director Mick Mulvaney and No. 2 House Republican Kevin McCarthy of California — would only cut the deficit by $1.1 billion over the coming decade. That’s because most of the cuts wouldn’t affect the deficit at all since CBO doesn’t give deficit credit for cutting money that would never have been spent.

Trump proposed the measure last month, but it was slow to come to a vote because some Republicans came out against it.

The White House submitted a revised package of cuts Tuesday, removing politically troublesome proposals to cut money to fight Ebola funds and to rebuild watersheds damaged by Superstorm Sandy. Trump weighed in soon after to urge Republicans to pass the plan.

It’s still unclear whether it will pass in the Senate, where pragmatic-minded Republicans are focusing on trying to get the troubled process for handling annual appropriations back on track on a bipartisan basis.

The White House and tea party lawmakers upset by the budget-busting “omnibus” bill have rallied around the plan, aiming to show that Republicans are taking on out-of-control spending.

“If this body cannot be trusted to reclaim money that will not or cannot be used for its intended purpose, can we really be trusted to save money anywhere else?” McCarthy said.

While some Democrats opposed the spending cuts as heartless, others mostly mocked the legislation.

“After spending nearly $2 trillion on tax cuts for the super-rich and blowing up the deficit, the Majority’s bill is like putting a Band-Aid on a gaping wound,” said Rep. Jim McGovern, D-Mass. “Republicans are trying to trick the American people into thinking they care about fiscal responsibility. They’re not fooling anyone.”

 

Providers argue against Medicaid rate cuts without oversight

http://www.healthcarefinancenews.com/news/providers-argue-against-medicaid-rate-cuts-without-oversight?mkt_tok=eyJpIjoiTmpKa1pXWTVNVFkzWVRoaSIsInQiOiJNWHRUZHRjS2dlNkRPaGs2aFNZK0xBb05tS05iY2taMzBGZndmTGNWSWRubjFYVVNtOUhHb1N6VnlUVm40TGFyS3UyWitMM2ppc3VnVnM3eU03bHdFeTN4SFwvQktueldQUDd2YWN6dGJZZ0pBZ25OK0pcL2xrbDZoSWpuaitaRzhjIn0%3D

 

States with at least 85% of their Medicaid population in managed care could implement nominal payment cuts without assuring care.

Hospitals, particularly rural providers, would be hurt by a Centers for Medicare and Medicaid Services proposed rule that would force them to take lower Medicaid rates without a review of the impact of the cuts, according to comments made to CMS asking for a reconsideration of the plan.

Provider organizations, hospitals, the Medicaid and CHIP Payment and Access Commission, are among those asking the Centers for Medicare and Medicaid Services to rethink its proposed rule.

Comments were due this week.

CMS proposed the rule in March to allow states that have a comprehensive, risk-based Medicaid managed care enrollment that is above 85 percent of their total Medicaid population to get around network adequacy rules when implementing “nominal” rate changes.

States had raised concern over the administrative burden associated with the current requirements, particularly for states with high rates of Medicaid managed care enrollment.

For states proposing nominal cuts below 4 percent a year or 6 percent over two years, the rule amends the process for them to document whether Medicaid payments in fee-for-service systems are sufficient to enlist providers to assure access to covered care and services.

These states would be exempt from access monitoring requirements and they would not need to seek public input on the rate reductions.

America’s Essential Hospitals said, “Requiring states to ensure, through monitoring, that rate reductions do not diminish access to needed services is particularly important now, as access monitoring reviews are the only vehicle left for providers to challenge state payment rate decisions.”

The Federation of American Hospitals contends that the rule would allow for more than nominal rate changes. If finalized, FAH said, the rule would allow for an estimated 18 states to implement a rate reduction of up to 12 percent over a period of four years or 16 percent over five years, without going through requirements for ongoing monitoring of the impact of the rate changes.

This would disproportionately impact vulnerable Medicaid beneficiaries and subject providers with unsustainable rate reductions, FAH said.

Most states, even those with very high rates of managed care enrollment, often exclude certain categories of particularly vulnerable groups from managed care plans, the organization said. People with physical, mental or intellectual disabilities or who are elderly, largely get services through fee-for-service, FAH told CMS Administrator Seema Verma.

The Medicaid and CHIP Payment and Access Commission said it did not find the states’ argument of administrative burden compelling enough given the federal government’s obligations to oversee state performance and assurances related to access.

“Moreover, exceptions to reporting may introduce gaps in oversight,” MACPAC Chair Penny Thompson said. “In short, the need for states to maintain resources and tools to monitor access as an ongoing element of state program administration and decision making outweighs the limited savings states would achieve as a result of these changes.”

 

KHN’s ‘What The Health?’ What Do The Budget, Idaho And FDA Chief Scott Gottlieb Have In Common?

Podcast: KHN’s ‘What The Health?’ What Do The Budget, Idaho And FDA Chief Scott Gottlieb Have In Common?

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President Donald Trump released his first full budget proposal this week, with many recommended cuts and some major changes to health programs. But Congress has already agreed on most spending levels for next year, so this budget is even more likely to be ignored than a typical presidential budget plan.

Meanwhile, states are trying to cope with last year’s changes to the Affordable Care Act in very different ways. Several states, mostly led by Democrats, are considering whether to set penalties for people who don’t have insurance — a provision of the ACA that Congress repealed in December. Idaho, meanwhile, is offering to let insurers sell plans that don’t cover the ACA’s required set of benefits and discriminate against people with preexisting health conditions.

Plus, Scott Gottlieb, commissioner of the Food and Drug Administration, talks about getting generic drugs to market faster and how the agency is working with Congress on ways to help patients with terminal illnesses get easier access to experimental treatments.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Stephanie Armour of The Wall Street Journal, Paige Winfield Cunningham of The Washington Post and Margot Sanger-Katz of The New York Times.

Among the takeaways from this week’s podcast:

  • Even though few of the proposals in Trump’s budget are likely to be enacted, it does lay down some important markers for the administration. Those include backing sweeping changes to Medicaid and eliminating many of the ACA’s coverage requirements.
  •  Blue states considering stepping into the void left by Congress’ repeal of the individual insurance mandate penalties have limited time to act. Insurers start making decisions about whether to participate in the individual market in the spring.
  • The FDA’s Gottlieb tells Rovner and KHN’s Sarah Jane Tribble he expects there will be a compromise on Capitol Hill on “right-to-try” legislation that would make it easier for patients with terminal illnesses to gain access to experimental therapies.
  • Idaho is moving forward on its plan to allow insurers to offer policies that do not comply with the requirements of the Affordable Care Act. On Capitol Hill this week, Health and Human Services Secretary Alex Azar would not say whether the federal government will step up to stop them.

Hospital Impact—Medicaid on the chopping block in 2018

https://www.fiercehealthcare.com/hospitals/hospital-impact-medicaid-chopping-block-2018?mkt_tok=eyJpIjoiTnpReE1EaGhZamt5TVRsbSIsInQiOiJ0UHBtVE1DclpRckhmUjVyMUF2ZWF1ZStSRE93QmtRYWM0ckdYXC9lalRYbERcL1E0R2o5S3g4blhTN2VZU1NsVkNndjRWZ1RRMnhJVXJHdmp6Z1liRWNXS2JyWHlrTyt6Y3hEeVVHZ0xxRWFUYmdjU2RsZWVhYzZmWWZxTCtBUjlcLyJ9&mrkid=959610

Filling out job application

Medicare and Medicaid have always been a “work in progress,” as they’ve evolved from entitlement programs for the elderly and the poor in the 1960s to the largest health insurers—public or private—in the nation.

Medicaid is the more controversial program of the two, as its original intent was to provide temporary, safety-net health coverage for the poor and not as a permanent entitlement. This issue has been politicized by both parties as of late with little attention paid to the impact that nonclinical determinants—such as genetics, socioeconomics, environment and lifestyle choices—have on healthcare outcomes and life expectancy.

Democrats support expanding Medicaid under the Affordable Care Act to every state for everyone within 138% of the federal poverty level. Republicans favor increasing beneficiary responsibilities to take greater control and responsibility over their own healthcare and are encouraging states to pursue waivers to experiment with different Medicaid models designed to optimize quality, drive down costs and enable beneficiaries to move toward greater economic self-sufficiency.

President Donald Trump’s proposed budget last May recommended $800 billion in Medicaid cuts as well as cuts in nutritional assistance ($192 billion) and welfare programs ($272 billion). With the passage of the Tax Cuts and Jobs Act adding $1 trillion to the federal deficit, Republicans are making cuts to Medicaid a priority for 2018.

The rise of work requirements

Last month, the Trump administration announced that it would grant states the right to impose work requirements for able-bodied Medicaid recipients. Pregnant women, full-time students, primary caretakers of children under 19, disabled adult dependents and frail elderly individuals would be exempt from these requirements.

There are many complex issues that arise from this proposal, including:

  • The likelihood that it will be challenged in federal court (as is already the case in Kentucky)
  • The impact that denial of coverage would have on healthcare costs with elimination of preventive healthcare services, treatment for opioid addiction and job restrictions for those with chronic addictions
  • The requirement that states would bear the burden of job training, child care, transportation to work sites and other administrative costs with limited resources.

Democrats responded that this proposal violates the Medicaid statute as well as the original intent of the state waiver program. They also pointed out that the majority of Medicaid beneficiaries who can work do work, and often carry more than one low-paying service job that does not permit them to afford commercial health insurance coverage.

Many Republican governors support the proposal, as they would like to see a greater number of Medicaid beneficiaries receive health insurance through an employer rather than through the state. Earlier this month, Kentucky became the first state to receive approval to impose job requirements as a part of its Medicaid program, followed in short order by Indiana.

Cost-sharing considerations

Another approach to reducing Medicaid costs is cost-sharing, which is already permitted under federal law. Like the job-requirement proposal, children, pregnant women and others are partially waived from this requirement with lower premiums and cost-sharing limits.

In addition, states may impose higher premiums and cost-sharing limits for the option to purchase brand as opposed to generic prescription drugs and the nonemergency use of emergency departments as determined by a medical screening exam under the Emergency Medical Treatment and Labor Act.

All about the execution

There is no question that the United States cannot sustain the current unfunded liabilities that include Medicaid, Medicare and Social Security. In addition, cuts to the Medicaid program are supported by a significant number of Americans. However, doing this successfully will be complicated by the fact that those receiving this coverage deeply appreciate its benefits and that many studies support the positive economic value of Medicaid expansion.

Imposing work requirements and cost-sharing on Medicaid beneficiaries will only work if the jobs available to them are not minimum-wage service jobs and provide employer-based insurance. Thus, the main question is: Can states invest in the infrastructure necessary to help get their most vulnerable populations on their feet in an economically meaningful way? Or is the intent to merely withhold healthcare services to compensate for federal and state budgets that have spiraled out of control?