Tag Archives: Medicaid

A snapshot into why some providers are eliminating positions

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http://www.healthcaredive.com/news/healthcare-workforce-growth-cuts/446182/

Employment in the healthcare industry has risen since the ACA was passed, but many health systems have been trimming their workforce under financial pressure.

It’s clear there have been a fair amount of hospital and provider layoffs in 2017.

In the past few months, hospitals of all sizes, and in all parts of the country, have said they are cutting jobs or eliminating open positions. Major providers affected have included Memorial Hermann, Brigham and Women’s Hospital, NYC Health + Hospitals, Summa Health and Hallmark Health. In May, Becker’s Hospital Review listed 48 layoffs across the industry the publication had reported on in 2017.

The layoffs come in contrast with the sharp rise in hiring in the healthcare sector ever since the Affordable Care Act (ACA) was enacted. While the hiring growth is a long-term trend — though it’s yet to be determined at what rate in 2017 — these layoffs are due in part to the short-term trends of softening admissions and flattening reimbursements. Many providers cited similar problems: declining reimbursements, lower admissions and shrinking operating incomes. Layoffs aren’t the only play for struggling organizations, but hospital expenses are rising on multiple fronts, and executives have to make some hard choices.

Big drivers of the growth are the aging population and the pending retirement of many registered nurses. It’s unclear how or when the layoff and healthcare job growth trends will change, but the underlying themes are not going away. The Bureau of Labor Statistics (BLS) is scheduled to release 2016-2026 occupational projections in October, while layoffs will continue to be tracked throughout the year.

Then there’s the elephant in the room over the buzzword of 2017: Uncertainty. Whether it be in Congress or in the executive branch, uncertainty over U.S. healthcare policy is making providers nervous as the insurance open enrollment period nears with no clear ACA reform or repeal in sight.

Healthcare hiring still on the rise, but the pace may be slowing

To date, the healthcare employment bubble hasn’t burst. Healthcare jobs, including hospital jobs, still are on the rise. While job growth is a different metric than layoffs and require different considerations, both underscore the themes affecting the industry’s workforce.

Ani Turner, co-director of Altarum Institute’s Center for Sustainable Health Spending, told Healthcare Dive there have been some clear trends in hospital job growth in recent years. In 2013, there was little job growth but the expanded coverage affect — where more individuals gained health insurance for the first time under the ACA — helped spur hospital job growth in 2014.

This expanded coverage helped hospitals experience new revenue opportunities thanks to more people entering the care delivery space, especially in states that expanded Medicaid. In addition, since the implementation of the ACA, the level of uncompensated care nationwide has gone down from $46.4 billion in 2013 to $35.7 billion in 2015.

Since that time, hospitals experienced great growth from a jobs perspective. In a 2015 Forbes article, Politico’s Dan Diamond noted that healthcare job growth surged at its fastest pace since 1991 starting in July 2014 up through May of 2015. In fact, healthcare practitioners and healthcare support positions are expected to be among the fastest growing jobs from 2014 to 2024. BLS notes the aging population and expanded insurance coverage will help fuel this growth as demand for healthcare services increases.

The recent surge is “somewhat unexpected,” Turner says. “One would think hospitals would be conservative in their hiring. Everything I’m seeing is flat or slightly declining volumes, especially on inpatient side.”

“The data don’t always cooperate with the story that makes sense,” Turner added.

Brian Augustian, principal at Deloitte, believes the job growth is going to continue to slow this year in part because there will be a push for greater automation and productivity. “As organizations are able to use machine learning, artificial intelligence and better utilize technology to get tasks done, it will not only result in…needing fewer people but also different types of people,” he told Healthcare Dive.

The rate of job growth will be an issue to watch throughout the year. As shown above, just two months worth of data changes the story from a narrative of “slowing growth” to “continuing to soar.” The looming retirement of registered nurses and the aging population do point to hospitals and providers arming themselves to smooth the transition of both the workforce as well as the pending flood of baby boomers entering into the care space.

Job growth doesn’t stop financial troubles for providers

However, as seen in the job cut announcements and recent quarterly earnings for hospital operators, providers are facing challenges that are affecting their bottom lines.

One of the biggest challenges for providers is declining or flattening admissions. In 2010, all hospital admissions totaled 36.9 million admissions. By 2013, admissions had dropped by 1.5 million; 35 million patients were admitted in 2015.

In the latest rounds of quarterly earnings, most for-profit hospital operators took a lashing, all acknowledging softening markets and weaker-than-expected patient volumes. Community Health Systems (CHS) reported it underperformed in Q2 2017 and is exploring more divestitures while HCA Healthcare reported it missed Q2 estimates due in part to higher expenses and lower-than-expected patient admissions. On Monday, Tenet Health reported a 4.5% decline in total admissions for the first six months of 2017.

Indiana University Health’s operating income suffered a 46% loss while seeing less individuals coming into the facilities, Modern Healthcare reported.

As seen in HCA Healthcare’s Q2 earnings call, lower acuity visits declined in the last quarter. At CHS, emergency department volume declined on the outpatient side, which Tim Hingtgen, president and COO of CHS, attributed to “industry dynamics, including urgent care growth, freestanding ED competition in select markets.” As Turner notes, the average person seeking a care setting visit is likely going to a physician’s office. This puts pressure on operators to rethink their lower acuity setting strategies and not rest on the strength of organic patient growth seen in previous years.

Another major issue for providers are expenses. More jobs equals more expenses, for example. Facility maintenance, equipment, electricity, telephone lines, internet, etc. all add up. According to the American Hospital Association, expenses for all U.S. registered hospitals are currently $936 billion, up from $859.4 billion in 2013. In addition to these changes, turning toward value-based care exposes providers more to risk-based contracts which can affect reimbursement formulas.

Hospitals know they need to lower cost structures, and personnel changes is one means

Ben Isgur, director of PricewaterhouseCoopers’ Health Research Institute, adds that squeezing costs isn’t a new concept for hospitals. There are many options for executives to manage out costs from its overhead. Supply chain, infrastructure and third party contracts are all go-to areas for such efforts. If two systems merge, departments can be streamlined or share services. In some cases, third-party contractors may be more beneficial to a provider than hiring for internal positions.

Igor Belokrinitsky, healthcare strategist at Strategy&, a member of the PwC network of firms, told Healthcare Dive in March many administrators faced with financial challenges tell their departments during the budgeting process to budget for zero cost increases or even for a reduction. “In the longer run, we are seeing and are working with health systems to take out pretty significant amounts of cost out of their operations, both clinical and nonclinical, and setting targets like 15-20%, which is a transformative change,” he said. “When talking about a 20% cost improvement, you’re questioning, ‘Do we need this facility? Do we need to provide this service at this location? Does this service need to be provided by a physician?'”

The current political landscape isn’t helping matters either

Isgur tells Healthcare Dive that healthcare industry layoffs should be watched closely and agrees with Turner that one of the biggest reasons is uncertainty in the industry.

As an example, he points to the Congressional Budget Office’s figure that 15 million individuals could have lost health coverage in 2018 if the Senate ACA repeal bill had become law. “Providers look at that and have to be ready for an environment where they have potentially fewer paying patients,” Isgur told Healthcare Dive.

During the heady time when ACA repeal-and/or-replace was on Congress’ plate this summer, many projections showed healthcare jobs would’ve been affected. One analysis of the House ACA bill estimated 725,000 jobs across the entire industry would be lost by 2026 if it had become law. The primary cause of the job disappearances and state economic downturns would have been attributable to cuts to healthcare funding, such as more than $800 billion to Medicaid, and lower premium subsidies.

Moody’s Investor Services projected the Senate ACA repeal bill would have caused uncompensated care costs to rise at hospitals.

The fight over healthcare policy is likely now headed to the executive branch, as Congress has failed to pass a bill that repeals or replaces the ACA. President Donald Trump has cost-sharing reduction payments to insurers hanging in the balance, and hasn’t publicly stated if the White House will continue to make these payments.

If these payments are discontinued, Fitch Ratings found in a new report that premiums could increase to the point where customers won’t be able to pay for coverage, thus increasing the chance for uncompensated payments to rise.

In addition, state Medicaid waivers will have to be looked at. Some applications, such as the Maine’s, could include work requirements, mandatory premiums and asset testing. It would be one of the most conservative state programs, and some health policy experts warn that the restrictions would push out many low-income adults who would otherwise qualify.

“When you add uncertainty to what’s already been going on in the reimbursement environment around how many more uninsured there may be going forward, that’s not the cause of [layoffs] but it’s certainly going to accelerate the thinking of executive teams to make sure [their organizations] are efficient and ready for anything,” Isgur said.

Isgur does think the industry will see more layoff announcements this year, but that it is an important trend to watch, especially as more decisions come out of Washington.

 

Why ACA market upheaval still looms large despite failure to repeal the law

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http://www.healthcaredive.com/news/why-aca-market-upheaval-still-looms-large-despite-failure-to-repeal-the-law/449117/

Whether lawmakers are done with efforts to repeal the ACA or not, some important changes for healthcare could be on the horizon.

At least one part of the healthcare industry is still looking to Washington D.C. after the flurry of activity last month, if only for one action. In addition to the highly public failure to pass major healthcare legislation before leaving town for a month, Congress and President Donald Trump also left the Affordable Care Act (ACA) exchange markets in a dangerous flux by not taking action on the cost-sharing reduction (CSR) payments for insurers.

It’s not clear whether Congress will continue to take up Republican healthcare legislation to repeal the ACA when it returns. Even within the party, senators are singing different tunes, while President Donald Trump continues to pressure lawmakers to get an ACA repeal bill on his desk. A bipartisan group with members from both chambers has a few ideas, but the majority of lawmakers appear ready to move on. Regardless, they will still have to take up reauthorization of the Children’s Health Insurance Program (CHIP) in September, potential reigniting some debates around the ACA.

If GOP leaders do declare ACA repeal off the table for this year, its opponents will look to the executive branch for efforts to weaken the law and its effects. Here’s what to look out for.

Cost-sharing reduction payments

Payers have been begging for assurance that CSRs will continue to be paid, but the White House and Congress have so far refused. The result has been many payers pulling out of the exchange markets or reducing their footprints, as well as premium hikes of 30% or more. Just last week, Anthem announced it is pulling out of the Nevada and Virginia exchange markets and reducing its participation in Georgia.

Not paying the CSRs would increase federal spending, because the higher premiums will require higher premium subsidies for the 84% in the exchanges who qualify for help. That’s not to mention the 30,000 or more who would have no insurance options.

Trump hasn’t been shy about his plan to halt any efforts that stabilize the exchange markets (like CSRs) in an effort to sabotage the ACA and force unwilling Democrats to cooperate on a repeal bill. Others in the GOP, however, have been reluctant to hurt constituents with such an overtly political play.

America’s Health Insurance Plans has said it is imperative the CSRs are funded. “These benefits are essential to making coverage and care affordable for American families who receive them,” the organization said. “Clarity and commitment to this funding is needed to eliminate confusion and anxiety for consumers.”

It may soon be too late for CSR payments to matter for next year. Payers must sign their contracts with HealthCare.gov by Sept. 21. The CMS and some states have tried to give insurers more flexibility because of the uncertainty by pushing back rate filing deadlines. Connecticut said it will allow payers to refile their rates if the CSR payments are eliminated, and California allowed them to file two sets of rates, one of which assumes no CSRs.

Weakening the ACA

Trump’s threat to “let Obamacare implode” may go beyond refusing to shore up the exchange markets. His administration has already pulled advertising and promotion of the exchanges, and is being investigated by the Government Accountability Office for pushing the GOP healthcare bills in official HHS communication channels. Immediately after his inauguration, Trump signed a wide-ranging executive order instructing federal agencies to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay any provision or requirement” of the ACA that imposes a fiscal or regulatory burden.

No major changes have resulted from the order so far, but it could be used to roll back benefit requirements for preventive care, contraception and mental health services.

HHS Secretary Tom Price could also make changes that weaken the ACA’s individual mandate. Repealing the mandate would mean 15 million fewer Americans would have coverage by 2026 and result in premium increases of about 20%, according to the Congressional Budget Office. Watering down the requirement instead of ditching it completely would have less drastic results, but there would still be an impact.

Price could create more exemptions for the mandate or attempt to force the Internal Revenue Service to stop enforcing it. Either of these actions would add turmoil to the exchanges markets and undermine the efforts of the ACA.

Reauthorizing CHIP

Those watching health legislation in Congress are eyeing CHIP reauthorization as a possible vehicle for changes to the ACA. Lawmakers will be hesitant, though, as CHIP is a successful program with bipartisan support.

The program, which turned 20 years old this past weekend, covered nearly 9 million children in fiscal 2016. CHIP coverage is more affordable than employer-sponsored or marketplace coverage, while children covered under CHIP are more likely to have a usual source of care and regularly attend well-child visits, according to the Medicaid and CHIP Payment and Access Commission, which recommends Congress extend CHIP funding through 2022.

The commission estimates more than a million children would lose coverage if CHIP loses funding.

Bipartisan legislation and state waivers

A bipartisan group of about 40 members of the House is proposing some relatively small changes to the ACA that have received support from both sides of the aisle in the past. The plan is to put them in a bill that would also immediately fund the CSRs.

Their suggestions include exempting smaller businesses from the employer mandate, a fund states can go to for help covering people with high care costs and more flexibility and guidance for states looking to apply for ACA waivers. Another possible measure is repeal of the medical device tax.

Their proposal is to change the employer mandate by having it apply only to businesses with 500 or more employees, instead of the current requirement for businesses with 50 or more workers. Analysis from the Urban Instituteand Rand Corporation has shown the employer mandate has little effect on the number of people who have coverage, partly because nearly all businesses with at least 50 employees offered coverage even before the mandate went into effect.

The ACA has always given states the option of applying for a waiver that allows them to eschew essential health benefits and other requirements — as long as they can prove their plans will cover the same number of people with coverage that is just as comprehensive and affordable. HHS under President Barack Obama was careful in ensuring that state proposals met those guidelines, but current HHS Secretary Tom Price has said he wants to encourage more waivers and will be less strict with approvals of those waivers and Medicaid demonstration waivers.

With this in mind, some recent proposals have included aspects that would have previously been rejected. Last week, Maine applied for a Medicaid demonstration waiver that includes work requirements and asset testing. Those measures are likely to restrict access to coverage for people with low incomes.

Many of the options available for Congress and the executive branch could roil the industry, but some bipartisan options could provide much needed clarity. Summer is usually pretty quiet in Washington D.C., but this year has not been business as usual. Healthcare leaders would be wise to be ready for new developments with the ACA and beyond.

Climbing Cost Of Decades-Old Drugs Threatens To Break Medicaid Bank

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http://khn.org/news/climbing-cost-of-decades-old-drugs-threatens-to-break-medicaid-bank/

Skyrocketing price tags for new drugs to treat rare diseases have stoked outrage nationwide. But hundreds of old, commonly used drugs cost the Medicaid program billions of extra dollars in 2016 vs. 2015, a Kaiser Health News data analysis shows. Eighty of the drugs — some generic and some still carrying brand names — proved more than two decades old.

Rising costs for 313 brand-name drugs lifted Medicaid’s spending by as much as $3.2 billion in 2016, the analysis shows. Nine of these brand-name drugs have been on the market since before 1970. In addition, the data reveal that Medicaid outlays for 67 generics and other non-branded drugs cost taxpayers an extra $258 million last year.

Even after a medicine has gone generic, the branded version often remains on the market. Medicaid recipients might choose to purchase it because they’re brand loyalists or because state laws prevent pharmacists from automatically substituting generics. Drugs driving Medicaid spending increases ranged from common asthma medicines like Ventolin to over-the-counter painkillers like the generic form of Aleve to generic antidepressants and heartburn medicines.

Among the stark examples:

  • Ventolin, originally approved in 1981, treats and prevents spasms that constrict patients’ airways and make it difficult to breathe. When a gram of it went from $2.58 to $2.90 on average, Medicaid paid out an extra $54.5 million for the drug.
  • Naproxen sodium, a painkiller originally approved in 1994 as brand-name Aleve, went from costing Medicaid an average of $0.72 to $1.70 a pill, an increase of 136 percent. Overall, the change cost the program an extra $10 million in 2016.
  • Generic metformin hydrochloride, an oral Type 2 diabetes drug that’s been around since the 1990s, went from an average 10 cents to 13 cents a pill from 2015 to 2016. Those extra three pennies per pill cost Medicaid a combined $8.3 million in 2016. And cost increases for the extended-release, authorized generic version cost the program another $6.5 million.

“People always thought, ‘They’re generics. They’re cheap,’” said Matt Salo, who runs the National Association of Medicaid Directors. But with drug prices going up “across the board,” generics are far from immune.

Historically, generics tend to drive costs lower over time, and Medicaid’s overall spending on generics dropped $1.6 billion last year because many generics did get cheaper. But the per-unit cost of dozens of generics doubled or even tripled from 2015 to 2016. Manufacturers of branded drugs tend to lower prices once several comparable generics enter a market.

Medicaid tracks drug sales by “units” and a unit can be a milliliter or a gram, or refer to a tablet, vial or kit.

Old drugs that became far more expensive included those used to treat ear infections, psychosis, cancer and other ailments:

  • Fluphenazine hydrochloride, an antipsychotic drug approved in 1988 to treat schizophrenia, cost Medicaid an extra $8.5 million in 2016. Medicaid spent an average $1.39 per unit in 2016, an increase of 347 percent vs. the year before.
  • Depo-Provera was first approved in 1960 as a cancer drug and is often used now as birth control. It cost Medicaid an extra $4.5 million after its cost more than doubled to $37 per unit in 2016.
  • Potassium phosphates — on the market since the 1980s and used for renal failure patients, preemies and patients undergoing chemotherapy — cost Medicaid an extra $1.8 million in 2016. Its average cost to Medicaid jumped 290 percent, to $6.70 per unit.

A shortage of potassium phosphates began in 2015 after manufacturer American Regent closed its facility to address quality concerns, according to Erin Fox, who directs the Drug Information Center at the University of Utah and tracks shortages for the American Society of Health-System Pharmacists.

When generics enter a market, competition can drive prices lower initially. But when prices sink, some companies inevitably stop making their drugs.

“One manufacturer is left standing … [so] guess who now has a monopoly?” Salo said. “Guess who can bring prices as far up as they want?”

According to a Food and Drug Administration analysis, drug prices decline to about half of their original price with two generic competitors on the market and to about a third of the original price with five generics available. But if there’s only one generic, a drug’s price drops just 6 percentage points.

The increases paid by Medicaid ultimately fall on taxpayers, who pay for the drugs taken by its 68.9 million beneficiaries. And those costs eat “into states’ ability to pay for other stuff that matters to [every] resident,” said economist Rena Conti, a professor at the University of Chicago who co-authored a National Bureau of Economics paper about generic price hikes in July. The manufacturers’ list prices for the drugs named here also rose in 2016, according to Truven Health Analytics, which means customers outside Medicaid also paid more.

Conti said that about 30 percent of generic drugs had price increases of 100 percent or more the past five years.

Medicaid spending per unit doesn’t include rebates, which drug manufacturers return to states after they pay for the drugs upfront. Such rebates are extremely complicated, but generally start at the federally required 23.1 percent for brand-name drugs, plus supplemental rebates that vary by state, Salo said. Final rebate amounts are considered proprietary, he noted. “All rebates are completely opaque … [it’s] “black-box stuff.”

Fox said drug prices could also jump when a pharmaceutical product changes ownership, gets new packaging or just hasn’t had a price increase in a long time.

Recently named FDA Commissioner Scott Gottlieb has made increasing generic competition a core mission. Plans include publishing lists of off-patent drugs made by one manufacturer and preventing brand-name drugmakers from using anti-competitive tactics to stave off competition.

Doctors, pharmacists and patients don’t always receive warning when a price hike is about to occur, Fox said.

“Sometimes, we will get notices. Other times, it’s like a bad surprise,” she said, adding that the amount of wiggle room for alternatives depends on the drug and the patient.

Following some price hikes, doctors can use fewer units of a drug or switch it out entirely, she said.

Ofloxacin otic, long used to treat swimmer’s ear, became so expensive when generic manufacturers exited the market that doctors started using eye drops in patients’ ears, Fox said.

When old drugs get more expensive, hospitals try to eliminate waste by making smaller infusion bags and keeping really expensive drugs in the pharmacy instead of stocked in readily available shelves and drawers. But that’s not always possible.

“These drugs do have a place in daily therapy. Sometimes they’re life-sustaining and sometimes they’re lifesaving,” said Michael O’Neal, a pharmacist at Vanderbilt University Medical Center. “In this case, you just need to take it on the chin, and you hope one day for competition.”

Section 1115 Medicaid Expansion Waivers: A Look at Key Themes and State Specific Waiver Provisions

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Seven states currently are implementing the Affordable Care Act’s (ACA) Medicaid expansion to low income adults up to 138% of the federal poverty level (FPL, $16,643 per year for an individual in 2017) in ways that extend beyond the flexibility provided by the law through Section 1115 demonstration waivers. While the future of federal legislation affecting the Medicaid expansion is unclear at this time, Section 1115 Medicaid expansion waiver activity continues as states submit amendments, extensions, and new waivers. While no decisions on expansion waivers have been issued under the new Administration to date, the Administration’s March, 2017 letter to state governors signaled some potential policy changes beyond what has been approved in the past. This issue brief focuses on approved (Arizona, Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire) and pending (Arkansas, Kentucky, and Indiana) Section 1115 waivers that implement the ACA’s Medicaid expansion. Table 1 below summarizes approved and pending provisions in Medicaid expansion waivers across these states. (See the Appendix Tables for additional detail about each state’s waiver.)

The ACA’s Medicaid expansion changes the role of Section 1115 waivers for coverage expansions, eliminating the need for a state to obtain a waiver to cover childless adults and providing significant federal funding (100% from 2014 through 2016, gradually decreasing to 95% in 2017, and 90% by 2020) for states to expand coverage. Prior to the ACA, a number of states used Section 1115 waivers to expand coverage to childless adults who then could not otherwise be covered under federal rules. Because Section 1115 waivers must be budget neutral for federal spending, according to long-standing federal policy, states could not receive additional federal funds to expand coverage to these adults and, as such, needed to redirect existing federal funds or find offsetting program savings to finance this coverage. The ACA eliminates the historic exclusion of adults without dependent children from Medicaid, enabling states to expand coverage without a waiver and with enhanced federal matching funds. As of August, 2017, 32 states including DC have adopted the expansion, with most implementing traditional expansions as set forth by the law, and seven states using Section 1115 waivers to implement in ways not otherwise permitted under federal law. In March 2017, the Trump Administration sent a  letter to state governors signaling support for waiver provisions including provisions not previously approved like those related to work requirements.Introduction

Key Waiver Policy Findings

APPROVED ACA EXPANSION WAIVERS

As of August, 2017, seven states (Arizona, Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire) have approved Section 1115 waivers to implement the ACA’s Medicaid expansion in ways that extend beyond the flexibility provided by the law. Some states sought waiver authority as a politically viable way to expand coverage and receive enhanced federal matching funds. Nearly all of these waivers are limited to provisions related to the Medicaid expansion; these waivers were the mechanisms by which these states first implemented their expansions. The exception is Arizona, which has a long-standing Section 1115 waiver that governs its entire Medicaid program, and which initially implemented a traditional expansion but subsequently obtained waiver authority to alter the terms of that expansion in ways not otherwise permitted under existing law.

While each expansion waiver is unique, they include some common provisions, such as implementing the Medicaid expansion through a premium assistance model; charging premiums beyond what is authorized in federal law; eliminating non-emergency medical transportation, an otherwise required benefit; and using healthy behavior incentives to reduce premiums and/or co-payments (Table 2). Indiana’s waiver includes provisions that had not been approved in other states, such as making coverage effective on the date of the first premium payment instead of the date of application; barring certain expansion adults from re-enrolling in coverage for six months if they are dis-enrolled for unpaid premiums (a three-month lock-out was later approved in Montana); and eliminating retroactive eligibility (later approved in New Hampshire and Arkansas). The retroactive eligibility waivers were conditional, requiring states to implement safeguards to protect beneficiaries from unpaid medical costs incurred just prior to Medicaid eligibility. For example, Indiana expanded its presumptive eligibility program and implemented a prior claims payment program to cover retroactive costs for the mandatory (non-expansion) parents and 19 and 20 year olds covered under its waiver. Arkansas and New Hampshire were required to ensure that eligibility determinations are timely and without gaps in coverage.

The previous Administration denied some specific provisions included in states’ Medicaid expansion waiver proposals, including premiums for beneficiaries with incomes under 100% FPL as a condition of eligibility; elimination of Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefits and beneficiaries’ free choice of family planning provider; and work requirements as a condition of eligibility. The previous Administration also denied Ohio’s waiver application, noting that Ohio had implemented a successful traditional ACA expansion and estimated that its proposed policy changes “would lead to over 125,000 people losing coverage each year” compared to the current expansion. CMS also issued policy guidance, consistent with its legal interpretation of the ACA, indicating that states cannot receive enhanced federal ACA expansion funding unless they cover all newly eligible adults through 138% FPL.DENIED ACA EXPANSION WAIVERS OR WAIVER PROVISIONS

PENDING ACA EXPANSION WAIVERS

Three states (Indiana, Kentucky and Arkansas) currently have Medicaid expansion waivers pending before the Centers for Medicare and Medicaid Services (CMS). Indiana proposes to extend its current Medicaid expansion waiver from 2018 through 2021, with some changes, such as a three-month coverage lock-out for beneficiaries who do not timely renew eligibility, a 1% premium surcharge for tobacco users beginning in the second year of enrollment, and outcome-based healthy behavior incentives related to tobacco cessation, substance use disorder treatment, chronic disease management, and employment. Indiana also submitted an amendment to its extension application, which includes conditioning eligibility on work for most adults, changing to a tiered premium structure instead of a flat 2% of income, and ending the premium assistance program for people with access to employer-sponsored insurance, among other changes (see Appendix Table 3). Kentucky has a waiver pending that seeks changes to its traditional expansion including:  implementing sliding scale premiums, requiring premium payment before coverage is effective, locking those above 100% FPL out of coverage for six months for premium non-payment, requiring work as a condition of eligibility for most adults, locking beneficiaries out of coverage for six months for failure to timely renew eligibility, adding a high deductible health savings account, offering a healthy behavior incentive account, and waiving NEMT (see Appendix Table 5). Kentucky also submitted an amendment to its pending application, which includes changing the work requirement from a graduated requirement (beginning at 5 hours/week and increasing to a maximum 20 hours/week) to a flat 20 hour/week requirement; adding disenrollment and lock-out provisions for failing to timely report changes to income or employment, or for making false statements involving work verification; and removing a proposed expansion of presumptive eligibility sites included in the original waiver application (see Appendix Table 5). Additionally, Arkansas submitted a proposed waiver amendment that would reduce Medicaid eligibility for expansion adults from 138% to 100% FPL while continuing to receive enhanced federal matching funds, establish a work requirement, end its premium assistance program for those with access to employer-sponsored insurance, and remove the conditions on its waiver of retroactive eligibility (establishing a hospital presumptive eligibility program, offering coverage during a reasonable opportunity period for verification of immigration status, and completing an eligibility determination mitigation plan).

One other state is preparing a waiver submission to CMS. Arizona completed a state public comment period for a waiver amendment that proposes changes to coverage for all “able-bodied” Medicaid adults, not only those who newly gained coverage under the ACA’s expansion, including a work requirement as a condition of eligibility, a 5-year lifetime limit on benefits, monthly income and work verifications and eligibility renewals, and a one-year lock-out for those who knowingly fail to report a change in income or make a false statement about work compliance. Arizona previously sought similar changes, which were denied by the Obama Administration in September, 2016, but state law requires Arizona to request these components annually. Table 3 summarizes states’ pending waiver requests that have not been approved by CMS to date.

Certain requirements apply to all Section 1115 waivers, not just those that authorize Medicaid expansions. While not required by statute or regulation, CMS has a longstanding policy that waiver financing must be budget neutral for the federal government, meaning that federal costs under a waiver must not exceed what federal costs would have been for that state without the waiver. The ACA also established new rules about transparency and evaluations for all waivers. Recognizing that waivers can authorize changes that impact beneficiaries, providers, health plans, and other stakeholders in important ways, the waiver transparency rules require state and federal public comment periods before all new waiver applications and extensions of existing waivers are approved by CMS. Although the final regulations involving public notice do not require a state-level public comment period for amendments to existing/ongoing demonstrations, CMS has historically applied these regulations to amendments.1 However, recently, Indiana submitted an amendment to its pending extension application and Kentucky submitted an amendment to its pending waiver application without completing/holding a state-level public comment period before submission.2 3 In keeping with statutory requirement that Section 1115 waivers test new program approaches, the evaluation rules require states to have a publicly available, approved evaluation strategy and to submit an annual report to HHS that describes the changes occurring under the waiver and their impact on access, quality, and outcomes.OTHER WAIVER PARAMETERS

Looking Ahead

State interest in Medicaid waivers (for expansion and for traditional Medicaid populations as well) as a way to gain flexibility to adapt their programs continues under the Trump Administration. While no decisions on new or amended expansion waivers have been issued to date, the Administration’s March, 2017 letter to state governors signaled some potential policy changes beyond what has been approved in the past. In terms of the waiver approval process, the letter reaffirms support for HHS’s long-standing budget neutrality policy, acknowledges reasonable public input processes and transparency guidelines, offers an expedited process for waiver renewals, and suggests greater consistency in evaluating and incorporating waiver requests that already have been approved in another state. The future of federal legislation affecting the Medicaid expansion is unclear at this time, so Medicaid policy changes authorized through Section 1115 waivers could happen on a faster timeline than federal legislative changes to the program and thus will be a key area to watch.

JAMA Forum: Has Obamacare Become Trumpcare?

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https://newsatjama.jama.com/2017/08/08/jama-forum-has-obamacare-become-trumpcare/?utm_campaign=KFF-2017-The-Latest&utm_source=hs_email&utm_medium=email&utm_content=55126983&_hsenc=p2ANqtz-8vj_o8hQsSTd-X9YaMl68R-qSign5oJJXs7kws6IQmZfKrthFZsdW-cMXbvwUyTxd2LsnB1OGj2fS4da5pKiDsoJnTHQ

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With the failure of several bills in the Senate to repeal or replace the Affordable Care Act (ACA), the effort to significantly remake the 2010 health law is apparently on hold, if not dead. This is a dramatic turn of events that few anticipated when Republicans took control of the White House and Congress after 7 years of vowing to repeal the ACA.

So, now what?

For the foreseeable future, all the ACA’s benefits and requirements stand—expanded Medicaid coverage for 11 million people, low-income adults; premium tax credits for about 9 million low- or middle-income people buying their own insurance; guaranteed insurance for people with preexisting conditions, and requirement that people buy insurance or pay a penalty.

The biggest question at this point is whether the Trump administration will pivot towards trying to make the law work, after the president said he might just “let Obamacare fail” to gain negotiating leverage in the repeal and replace debate.

This is without a doubt an awkward situation for President Trump and Secretary of Health and Human Services Tom Price. They have bitterly criticized the ACA, and that was at some level understandable during the high-stakes Congressional debate. But now that the debate is over for the time being, the Trump administration is left running a government responsible for implementing the law.

What would it look like for the administration to run the ACA effectively?

Most immediately, open enrollment for the ACA’s marketplaces begins November 1, and insurers have to decide by late September whether they will participate. There are a host of actions the administration could take to make it successful.

Provide Clarity Around the Rules: There is still uncertainty as to whether the administration will enforce the individual mandate and continue to make $7 billion in cost-sharing subsidy payments to insurers—which have been in limbo because of threats from the administration to cut them off and a lawsuit brought by the House of Representatives challenging the authority to make them. This uncertainty is leading insurers to propose bigger premium increases than necessary to cover the anticipated growth in medical care expenses or, in some cases, to pull out of the market entirely. If the cost-sharing payments are stopped, the Kaiser Family Foundation (KFF) estimates that insurers would have to raise premiums by an additional 19% to offset the losses.

Maintaining Outreach and Consumer Assistance: There is enormous churn in the individual insurance market as people get or lose jobs with health benefits and see their incomes rise or fall. Millions of new people need to sign up for insurance each year just to maintain steady enrollment. Importantly, any decrease in enrollment is likely to be disproportionately among healthy people. So far, the administration has mostly taken steps to pare back outreach activities, cancelling ads at the conclusion of open enrollment for this year, and recently ending contracts for consumer assistance activities. It seems unlikely that President Trump will promote ACA enrollment on an online video show like “Between Two Ferns,” as President Obama did. However, a basic level of outreach is key to making the market function.

Encouraging Insurers to Participate: The ACA represents a market-based approach to health coverage, and insurers need to participate to make it work. The number of insurers selling in the marketplaces has dropped somewhat, as some carriers found they couldn’t compete and others were concerned that not enough healthy people were signing up to maintain a balanced risk pool. However, a recent KFF analysis suggests that insurers are doing much better financially this year in the individual market, following substantial premium increases. Still, there are currently 17 counties at risk of having no insurers participating in the marketplace for 2018 (out of a total of 3143), and that number could grow if uncertainty about cost-sharing payments and individual mandate enforcement persists. If there are no marketplace insurers in a county, there is no way for enrollees to access premium tax credits, and many would likely end up uninsured. The Trump administration has generally characterized insurer exits as a sign that the ACA is failing, rather than encouraging carriers to expand their service areas to fill in bare counties.

There are also ways the Trump administration can tweak the ACA through its executive powers, while still making a good faith effort to implement the law effectively.

In particular, the administration can give states flexibility to experiment through Medicaid waivers and ACA waivers under section 1332 of the law. These waivers have certain restrictions. For example, section 1332 waivers must be budget neutral for the federal government and provide coverage that is at least as comprehensive and affordable. And, certain provisions cannot be changed through waivers, such as guaranteed insurance for people with preexisting conditions and community rating (offering insurance at the same price regardless of a person’s health status). However, these waivers provide an opportunity to create a more state-based approach, which was a key goal for Republicans in the recent health care debate.

Congress could be pivotal, as well. Appropriation of funding for the cost-sharing payments to insurers could remove any ambiguity that they will be paid. Also, even if uncertainty about the cost-sharing payments and individual mandate is resolved, there are still pockets of the country, particularly in rural areas, where the individual insurance market is fragile. An infusion of federal funding to help cover the medical expenses of high-cost patients could lower premiums and bring stability to those markets. Sen Lamar Alexander (R, Tennessee), chair of the Senate Health, Education, Labor, and Pensions Committee, has announced plans to hold bipartisan hearings in early September with a goal to quickly pass legislation.

There are also potential political consequences to just allowing—or, in fact, pushing—the ACA to fail at this point. According to KFF polling, 59% of the public believes that the president and Republicans in Congress are now responsible for any ACA-related problems moving forward. So in much of the public’s view, particularly now that the Congressional debate has stalled, Obamacare may have become Trumpcare.

Fitch: States will take the lead on Medicaid reform despite ACA repeal and replace failure

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Some states had already begun negotiations with the Centers for Medicare and Medicaid Services on securing Medicaid waivers, Fitch said.

Despite the Senate’s failure to pass an ACA repeal and replace bill, state governments are moving ahead with their own efforts to revamp Medicaid, especially through waivers, according to a Fitch Ratings report.

Some states had already begun negotiations with the Centers for Medicare and Medicaid Services on securing Medicaid waivers granting them more flexibility. State waiver proposals could affect both Medicaid expansion beneficiaries and the traditional enrollees, the report said.

Arkansas, Indiana and Kentucky have submitted proposals to CMS asking to add work requirements to their Medicaid expansions. Other states including Arizona, Maine, Pennsylvania and Wisconsin are considering work requirements for at least some traditional Medicaid enrollees as well, Fitch said.

Fitch ratings agency said the Trump administration has indicated they are in favor of such measures.

Overall, Fitch said states have indicated their proposed Medicaid changes could reduce costs and also “support key policy goals.”

The states proposing these measures suggested they support “key policy goals” and could yield cost savings. “However, the actual amount of cost savings could be low as some health policy experts have raised questions about the efficacy of such work requirements given characteristics of the current Medicaid population. Adding work requirements could also add to state administrative burdens for oversight of the Medicaid program,” the agency said.

Fitch also projects states will continue to focus on controlling Medicaid spending as they look at their budgets. CMS predicted long-term rises in Medicaid spending due to growth in higher-cost traditional Medicaid-eligible populations, especially the elderly and disabled, and their most recent 10-year forecast for National Health Expenditures showed state and local government Medicaid spending will rise an average of 6.1 percent annually between 2017 and 2025.

“This is far ahead of Fitch’s expectations for national economic growth and state tax revenue growth, signaling continued pressure on states to manage their budgets accordingly,” Fitch said.

Florida Medicaid managed care demonstration gets 5-year extension

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http://www.healthcaredive.com/news/florida-medicaid-managed-care-demonstration-gets-5-year-extension/448610/

Dive Brief:

  • CMS approved a five-year extension of Florida’s section 1115 demonstration of a capitated Medicaid managed care program and low-income pool to support uncompensated care.
  • The uncompensated care pool will receive about $1.5 billion annually, based on the most current data on hospitals’ charity care costs, according to an Aug. 3 letter from CMS Administrator Seema Verma to Justin Senior, secretary of the Florida Agency for Health Care Administration.
  • The Managed Medical Assistance (MMA) demonstration, which now runs until June 2022, is the first to include simplified reporting requirements. CMS said it will monitor progress toward state-selected benchmarks and partner with the state to develop a meaningful program evaluation.

Dive Insight:

The modifications are in line with President Donald Trump’s administration’s pledge to reduce what it sees as burdensome or duplicative state reporting activities and with the CMS’ commitment to partner with states to improve their Medicaid programs.

In a March 14 letter, HHS Secretary Tom Price and Verma reminded states they can apply for waivers that would allow for significant changes to their Medicaid programs. States must show their waiver promotes the objectives of the Medicaid program, but HHS has broad authority for approval and Price has indicated he intends to broaden their use.

The CMS had been winding down funding for the Florida program under President Barack Obama’s administration. Officials at the time said the state should expand Medicaid under the Affordable Care Act to help with uncompensated care costs. They gave Florida $600 million for the final year of the program, far less than the about $2 billion requested.

The amount of funding now being provided offers a pretty clear indication the CMS under Trump thinks Florida is on the right track without expansion.

More than 30 states currently have waivers. Alabama received CMS approval in February for a section 1115 demonstration waiver to shift a majority of its Medicaid beneficiaries into regional care organizations, akin to accountable care organizations. While there are other states using this strategy, Alabama is unique in that it’s being administered by provider-run nonprofit organizations rather than a major insurer.

Patient advocacy groups have voiced alarm at potential steep cuts to Medicaid. Trump’s proposed $4.1 trillion budget would slash $610 billion from Medicaid plus 20% of funding for the Children’s Health Insurance Program. Robert Greenstein, president of the Center on Budget and Policy Priorities, said Trump’s budget would increase the number of uninsured and narrow Medicaid benefits and eligibility. This would lead to higher uncompensated care costs for hospitals.

GOP states move to cut Medicaid

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GOP states move to cut Medicaid

GOP states move to cut Medicaid

Republican governors are working with the Trump administration to do something Congress couldn’t accomplish: fundamentally alter their state Medicaid programs.

At least six states with GOP governors— Arkansas, Kentucky, Arizona, Maine, Wisconsin and Indiana — have already drafted plans meant to introduce new rules people would have to meet to be eligible for Medicaid, which provides healthcare to low-income Americans and those with certain disabilities.

Some want to add work requirements or introduce drug testing for recipients. Others want to raise premium prices.

The Trump administration has to approve the plans. Some approvals could come in weeks.

Critics say the proposed changes will leave fewer people on Medicaid and hurt the poor and vulnerable.

“There are limits on what’s allowable, and tying eligibility to work or drug testing or some of these other things is not consistent with what should be allowed,” said Judith Solomon, vice president for health policy at the liberal-leaning Centers on Budget and Policy Priorities.

“That said, we know we now have an administration that likely thinks differently, and we could see some changes in that regard,” she said.

Proponents argue the changes, which would waive federal requirements under Medicaid, are an important tool in trimming the fast-rising costs of the program.

They say Medicaid recipients should have some “skin in the game” — an incentive to transition from government support to full-time employment.

“Medicaid is Pac-Manning state budgets right now. It’s taking money away from education, transportation, in expansion and non-expansion states alike. It is eating their budgets,” said Josh Archambault, a senior fellow at the conservative Foundation for Government Accountability.

In the past, waivers have been granted to test new ways of delivering care and expanding Medicaid coverage. The only real requirements are that the waivers be budget neutral and promote the objectives of the Medicaid program.

Health and Human Services Secretary Tom Price, a former Republican congressman from Georgia and a vocal ObamaCare critic, has enormous flexibility in deciding what that means.

In March, Price and Seema Verma, who helms the Centers for Medicare and Medicaid Services, sent a letter to governors saying the administration would allow work requirements, larger premiums and other waiver provisions.

It was a dramatic departure from the Obama administration and “an open invitation” for states, said Robin Rudowitz, associate director for the Kaiser Family Foundation’s Program on Medicaid and the Uninsured.

“By and large, Obama let states use waivers to expand the number of people in the Medicaid program,” Archambault said.

The Trump administration seems poised to do the opposite.

Critics say the proposed requirements go beyond the authority of the executive branch, but Archambault said the statute on what’s allowed is extremely broad, meaning the administration has the authority to approve most, if not all of the proposals.

Republicans in Congress have been deeply divided over Medicaid, with conservatives seeking to cut spending on the program but centrists from states where it was expanded under ObamaCare pushing back.

The House and Senate’s ObamaCare repeal bills sought to drastically cut back Medicaid spending by capping federal financing and ending ObamaCare’s enhanced federal funding for coverage expansion. The bills also would have given states the option of imposing work requirements.

Medicaid waivers can’t change the program’s financing the way a federal law could, but several state waivers filed months ago include a work requirement as a way to trim spending.

Work requirements “will have the result of cutting state Medicaid costs because fewer people will be on Medicaid,” said Deborah Bachrach, a partner at Manatt Health and former Medicaid director of New York.

To date, no state has received an approval for a waiver requiring people to work to be eligible for Medicaid. If the Trump administration approves of one, most experts think other states will get similar requirements approved quickly.

“If and when Kentucky and Arizona get approval … you’ll see a bunch of other Republican states copycat,” Archambault said.

Other changes, if approved, include lowering the eligibility levels for coverage and a time limit for being on Medicaid.

Arkansas recently filed a waiver request to lower the Medicaid eligibility level while still receiving extra federal money as a Medicaid expansion state. It’s the first state to make such a request of the Trump administration; some states tried similar requests during the Obama administration and were denied.

Wisconsin would like to screen all and test some applicants for drugs. Those who test positive for drugs would be required to receive treatment; those who refuse to be screened or take a test would be ineligible for Medicaid benefits.

The state also wants to impose a 48-month limit on Medicaid eligibility, unless the person is working.

“My biggest concern is that the state is going to create a lot of new red tape and expense that is going to suppress Medicaid participation and increase total healthcare costs by putting greater reliance on hospital and emergency departments,” Jon Peacock, research director for Wisconsin-based Kids Forward, said.

Experts warn certain controversial provisions, if implemented, could be targets for lawsuits.

“Some of these waivers are pushing the boundaries of what has been approved before, and that could lead to potential litigation,” Rudowitz said.

What’s the Near-Term Outlook for the Affordable Care Act?

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http://www.kff.org/health-reform/issue-brief/whats-the-near-term-outlook-for-the-affordable-care-act/?utm_campaign=KFF-2017-August-Health-Reform-Outlook-ACA&utm_medium=email&_hsenc=p2ANqtz–oP5wlywrzGCg7hZVAatEjF0shnUXWvPMPB7MBQfAJJXiDqeMCZIkw7rhXhhVQ7bv4RTl4IFWk3zbvJFTnYv730hVqBQ&_hsmi=54950542&utm_content=54950542&utm_source=hs_email&hsCtaTracking=b35f36e5-60c0-4e14-ba27-3e14c4025b79%7Cf0a0cb87-2715-4168-b499-2000076067bf

If Congress abandons efforts to repeal and replace the Affordable Care Act (ACA), President Trump has said he would “let Obamacare fail.” This Q&A examines what could happen if the Affordable Care Act, also called “Obamacare,” remains the law and what it might mean to let Obamacare fail.

Is Obamacare failing?

The Affordable Care Act was a major piece of legislation that affects virtually all payers in the U.S. health system, including Medicaid, Medicare, employer-sponsored insurance, and coverage people buy on their own. One of the biggest changes under the health reform law was the expansion of the Medicaid program, which now covers nearly 75 million people, about 14 million of whom are signed up under the expansion. Most Americans, including most Republicans, believe the Medicaid program is working well.

When people talk about the idea of the ACA failing, they are usually referring to the exchange markets, also called Marketplaces. These markets, which first opened in 2014, are part of the broader individual insurance market where just 5-7% of the U.S. population gets their insurance. People who get insurance from other sources like their work or Medicaid are not directly affected by what happens in the individual insurance market.

The exchange markets have not been without problems: There have been some notable exits by insurance companies and premium increases going into 2017, and in the early years of the exchanges, insurers were losing money. The structure of the ACA’s premium subsidies – which rise along with premiums and cap what consumers have to pay for a benchmark plans a percentage of their income – prevents the market from deteriorating into a “death spiral.” However, premiums could become unaffordable in some parts of the country for people with incomes in excess of 400% of the poverty level, who are ineligible for premium assistance.

Insurer participation in this market has received a great deal of attention, as about 1 in 3 counties – primarily rural areas – have only one insurer on exchange. Rural counties have historically had limited competition even before the ACA, but data now available because of the Affordable Care Act brings the urban/rural divide into sharper focus. On average at the state level, competition in the individual market has been relatively stable – neither improving nor worsening.

Premiums in the reformed individual market started out relatively low and remained low in the first few years – about 12% lower than the Congressional Budget Office had projected as of 2016 –before increasing more rapidly in 2017. Most (83%) of the 12 million people buying their own coverage on the exchange receive subsidies and therefore are not as affected by the premium increases, but many of the approximately 9 million people buying off-exchange may have difficulty affording coverage, despite having higher incomes. As might be expected, after taking into account financial assistance and protections for people with pre-existing conditions, some people ended up paying more and others paying less than they did before the ACA. Our early polling in this market found that people in this market were nearly evenly split between paying more and paying less. About 3 millionpeople who remain uninsured are not eligible for assistance or employer coverage and many of them may be going without coverage due to costs.

Our recent analysis of first quarter 2017 insurer financial results finds that the market is not showing signs of collapse. Rather, insurers are on track to be profitable and the market appears to be stabilizing in the country overall. In other words, those premium increases going into 2017 may have been enough to make the market stable without discouraging too many healthy people from signing up. However, there are still markets – particularly rural ones – that are fragile.

Even Without Congress, Trump Can Still Cut Medicaid Enrollment

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After the Senate fell short in its effort to repeal the Affordable Care Act, the Trump administration is poised to use its regulatory powers to accomplish what lawmakers could not: shrink Medicaid.

President Donald Trump’s top health officials could engineer lower enrollment in the state-federal health insurance program by approving applications from several GOP-controlled states eager to control fast-rising Medicaid budgets.

Indiana, Arkansas, Kentucky, Arizona and Wisconsin are seeking the administration’s permission to require adult enrollees to work, submit to drug testing and demand that some of their poorest recipients pay monthly premiums or get barred from the program.

Maine plans to apply Tuesday. Other states would likely follow if the first ones get the go-ahead.

Josh Archambault, senior fellow for the conservative Foundation for Government Accountability, said absent congressional action on the health bill “the administration may be even more proactive in engaging with states on waivers outside of those that are already planning to do so.”

The hope, he added, is that fewer individuals will be on the program as states figure out ways “to transition able-bodied enrollees into new jobs, or higher-paying jobs.” States need to shore up the program to be able to keep meeting demands for the “truly needy,” such as children and the disabled, he added.

To Medicaid’s staunchest supporters and most vocal critics alike, the waiver requests are a way to rein in the $500 billion program that has undergone unprecedented growth the past four years and now covers 75 million people.

Waivers have often been granted in the past to broaden coverage and test new ways to deliver Medicaid care, such as through private managed-care organizations.

But critics of the new requests, which could be approved within weeks, said they could hurt those who are most in need.

The National Health Law Program “is assessing the legality of work requirements and drug testing and all avenues for challenging them, including litigation,” said Jane Perkins, the group’s legal director.

The administration has already said it favors work requirements and in March invited states to suggest new ideas.

Before taking the top job at the Centers for Medicare & Medicaid Services, Seema Verma was the architect of a Kentucky waiver request submitted last year.

Not all states are expected to seek waivers, because Medicaid enjoys wide political support in many states, particularly in the Northeast and West.

Medicaid, the nation’s largest health insurance program, has seen enrollment soar by 17 million since 2014, when Obamacare gave states more federal funding to expand coverage for adults. It’s typically states’ second-largest expense after education.

This year, Senate and House bills tried to cap federal funding to states for the first time. Since the program began in 1965, federal Medicaid funding to states has been open-ended.

Health experts say allowing the waiver requests goes beyond the executive branch’s authority to change the program without approval from Congress.

“The point of these waivers is not for states to remake the program whole-cloth on a large-scale basis,” said Sara Rosenbaum, a health policy expert at George Washington University who chairs a Medicaid group that advises Congress.

Rosenbaum noted that states received waivers for different purposes under the Obama administration.

In Iowa, state officials won the authority to limit non-emergency transportation. Indiana received approval to charge premiums and lock out enrollees with incomes above the federal poverty level if they fell behind on paying premiums.

“Now there is concern these more extreme measures would hurt enrollees’ access to care,” Rosenbaum said.

Three states seeking waivers today are home to three key GOP players in the Senate health debate: Majority Leader Mitch McConnell (Kentucky), Sen. John McCain (Arizona) and Vice President Mike Pence (Indiana).

If states add premiums, as well as work and drug testing requirements, the result would be fewer people enrolling and staying in Medicaid, said David Machledt, senior policy analyst for the National Health Law Program.

“How does that serve the purpose of the Medicaid program and what are the limits of CMS waiver authority?” he asked.

Wisconsin, where Republican Gov. Scott Walker wants his state to become the first to require some Medicaid enrollees to undergo drug testing, is a prime waiver candidate.

State officials stress the effort is not to deter drug users from the program but to help provide treatment for drug users.

Wisconsin is also one of five states seeking a waiver to add a work requirement. People could meet the mandate through volunteering, job training or caring for an elderly relative.

In addition, Wisconsin wants to limit enrollees’ Medicaid benefits to 48 consecutive months, unless the beneficiary is working.

Enrollees with incomes from 50 percent to 100 percent of the federal poverty level, or between $6,030 and$12,060, would have to pay an $8 monthly premium.

All of these rules would apply to about 12 percent of people currently enrolled in Medicaid — adults who are not disabled and don’t have dependent children.

Wisconsin Medicaid Director Michael Heifetz said the main goal of the proposed changes is not to shrink the size of Medicaid but to get people into the workforce.

“The proposal is not designed to have folks leave the program except for positive reasons,” he said.

If the waiver is approved, the state anticipates annual savings of nearly $50 million and a drop in enrollment of 5,102 over five years.

Wisconsin now spends $7 billion on Medicaid and has 1.2 million recipients.

Asked why childless adults — not parents — are the focus of the waivers, Heifetz said Wisconsin wanted to test the provisions on a smaller population first and focus on adults who should be able to find work.

But the Wisconsin effort has sparked broad outrage from hospitals, doctors and advocates for people with disabilities.

The Wisconsin Council of Churches said the state would be punishing the poor with its waivers — and undermining the vitality of communities.

“We are concerned the proposed changes to the program will be detrimental for the health of our most vulnerable neighbors … and undermine the social fabric and vitality of our state,” said Peter Bakken, public policy coordinator for the group in Sun Prairie, a suburb of Madison.