Medicaid Debate Heralds Changes to Come

Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.

By Victoria Pelham

Lawmakers for a second day looked at possible fixes to refocus a Medicaid program Democrats don’t think is broken.

The House Energy and Commerce health subcommittee reviewed three GOP proposals Feb. 1 that would limit who qualifies for the benefits. Republicans say the changes—which echo some previous initiatives and target annuities being used by married couples to hide assets, as well as beneficiaries’ immigration status and those who have received lump sum payments such as lottery winnings—would rein in abuses in a big-government program that has ballooned, with gains that could be routed to cut waiting lists for the needy.

But improvement is in the eye of the beholder, with Democrats offering stern warnings against any tweaks that would undermine Medicaid and calling the threat to the program “more dangerous than ever before.”

The Feb. 1 debate, the first of the subcommittee this Congress, signals the larger debate at play over the financing of the safety-net insurance program, which covers more than 70 million people. Medicaid accounted for around $552 billion in collective federal government, state and territory spending in fiscal 2015, according to the Kaiser Family Foundation.

“Consider this just the start of our work to identify red-tape and outdated requirements which add costs and deny care to those truly in need,” full Energy and Commerce Committee Chairman Greg Walden (R-Ore.) said.

Dollars

Federal Medicaid spending, which has been on the rise, is projected to reach $624 billion by 2026, according to the Congressional Budget Office.

The legislation aims to eliminate excess dollars in the system from enrollees with enough income to provide for themselves and also to cut benefits for those without verified citizenship during currently allowed reasonable opportunity periods.

The Verify Eligibility Coverage Act was introduced by Rep. Bill Flores (R-Texas). The Close Annuity Loopholes in Medicaid Actwas introduced by Markwayne Mullin (R-Okla.). And the Prioritizing the Most Vulnerable Over Lottery Winners Act of 2017 was introduced by Fred Upton (R-Mich.)

Committee majority members deemed these “commonsense” proposals to scale back spending, which has tripled over the past 20 years, and ensure patients such as the disabled, elderly and children—being crowded out—can get home and community-based services.

Avik Roy, president for the Foundation for Research on Equal Opportunity, supported conservative members’ assertions with data suggesting health outcomes for the safety-net program could stand to be strengthened. Specifically, one 2013 study out of Oregon—which, when pressed, Roy admitted was conducted before Obamacare expanded Medicaid—found Medicaid coverage didn’t have a positive impact on rates of high blood pressure, cholesterol or diabetes. He also noted others that showed significantly higher rates of later-stage cancer among Medicaid beneficiaries compared with other forms of insurance.

The Republicans stressed Washington wasn’t the best caretaker of taxpayers’ resources in Medicaid or knowing its realities; just 5 percent of Centers for Medicare & Medicaid Services officials had worked for a state Medicaid program, according to one representative citing LinkedIn data. States are eager to work with “a partner who is serious about hearing from them” to change the “most expensive health care system in the world,” Walden said.

`Nitpicking.’

One specific proposal on immigration came under fire from Democrats; lawmakers pointed out the language in the citizenship verification bill could unfairly hold up coverage for legal naturalized citizens or immigrants born abroad to American parents.

Democrats on the whole, though, accused the other side of the aisle of obfuscating their real point: taking away health care from the around 11 million who had been insured under Medicaid through the Affordable Care Act and re-calibrating Medicaid financing in a way that would taper off government monies and eventually lead to cuts in benefits and enrollment.

“There’s really not support for this program, so there’s a nitpicking around the edges"—with an ultimate “subtraction” in Medicaid, Rep. Anna Eshoo (D-Calif.) said.

The expansion, which added those coming from families living below 138 percent of the federal poverty level, has brought millions into health insurance for the first time and cut emergency room uncompensated care, Democrats said.

Additionally, Democrats believe the notion that this coverage hurts others more vulnerable and originally covered under Medicaid is a false dichotomy.

“There is no evidence to suggest that some beneficiaries take away resources from others, or that excluding some beneficiaries will benefit others,” Energy and Commerce ranking member Frank Pallone Jr. (D-N.J.) said.

Wait lists are highest, Democrats note, in states that haven’t expanded Medicaid.

The real concern isn’t millionaires and billionaires using safety-net care, they said, noting a saving in the mere hundreds under a similar lottery provision in Michigan. Instead, it’s the working adults who would lose health care under GOP plans.

Rep. Tony Cardenas (D-Calif.) said over 43,000 people could die annually if the ACA is repealed.

“Republicans in Congress want to take that care away, but they won’t own up to it,” Cardenas said.

More to Come

The new administration has suggested they might pursue Medicaid block grants, a form of financing that would lock in lump sum payments to states in exchange for greater freedom.

Those proposals, critics say, will almost certainly lead to budget cuts that would kick people off Medicaid and cut their benefits.

Those cuts could reach $1 trillion over 10 years, and 14 million to 21 million people could lose insurance under these types of proposals, according to Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities in Washington.

That would be especially true since formulated amounts wouldn’t factor in epidemics like Zika, the cost of new, expensive blockbuster drugs or an aging baby boomer population.

The hearing came just one day after the Energy and Commerce oversight subcommittee tackled expansion and fraud, waste and abuse concerns, pointing out Medicaid’s 14-year status as “high risk” program. Its tone, which became highly partisan and rancorous enough for the chairman to complain, will likely be a harbinger for future debates over the role of Medicaid.

Members agreed there will likely be many more to come.

To contact the reporter on this story: Victoria Pelham in Washington at vpelham@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Health Care on Bloomberg Law