Medicaid Directors See Boon in Newfound Public Awareness

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By Victoria Pelham

Medicaid directors are seeing a newfound public awareness and appreciation of the safety-net health insurance program in the wake of failed Obamacare repeal-and-replace efforts.

That’s critical for Medicaid’s future, Matt Salo, executive director of the National Association of Medicaid Directors, told Bloomberg BNA Aug. 18. Now the real work will move back to the states, which can push bids to bolster the program to be more value-driven, holistic, and better coordinated for the most needy beneficiaries, he said.

“Let’s think about change and let’s think about reform in ways that are focused on improving the program, not just undermining it,” he said.

Recent GOP congressional proposals to place ceilings on federal Medicaid spending, as part of an Affordable Care Act overthrow, would have stripped the program of around $834 billion, according to Congressional Budget Office estimates. Salo said directors will remain on alert for legislative steps to cut the program—these debates are not are over—and he expects to see the Trump administration approve state waiver plans to implement new eligibility standards such as work requirements. But context is key, Salo added.

“If this is what it takes for a Florida, Indiana, or Wisconsin to keep political support for the program strong, then I think that’s what [states] will do,” he said. “That’s an important point that should not be lost.”

Strengthened Understanding

Salo noted that Medicaid saw a “victory” out of lawmakers’ debates in the House-passed American Health Care Act and Senate’s Better Care Reconciliation Act: improved understanding of the role Medicaid actually plays.

The health insurance, which covers more than 70 million people, spends most of its budget (around 80 percent) on seniors, the disabled, long-term care, and children. And it offers care to those who would have no other options, he said. The program also covers almost half of U.S. childbirths, advocates are quick to point out.

Hannah Katch, senior policy analyst with the Center on Budget and Policy Priorities, called the response to possible Medicaid overhauls “unlike anything” she has ever seen.

“It really goes to show how well Medicaid works and when there was a real threat to the future of Medicaid, we saw people stand up and talk about how important it was for them and their families,” she told Bloomberg BNA.

Those personal testimonies really helped to drive support, Katch added. The Washington-based CBPP advocates for low-income people in public policy.

A Kaiser Family Foundation poll released in June, amid the repeal-and-replace push, found 74 percent saw Medicaid in a positive light. About one-third backed congressional plans to change the program’s funding, with 36 percent supporting winding down resources for Medicaid expansion and 35 percent supporting capping annual federal Medicaid allotments to states.

Salo added that the opposition of Republican governors such as Gov. John Kasich of Ohio and Brian Sandoval of Nevada, at a time when the GOP had banded together in support of Medicaid overhauls, helped to “cut through the jargon.”

“When people who you don’t expect stand up and do something, it makes you really pay attention,” he said.

Around the Corner

The underlying ideas that helped drive the overhaul efforts haven’t disappeared, Salo said. That means they will continue to crop up, and cuts could resurface at any time.

It likely wouldn’t be to the tune of $800 billion, but future plans could offer smaller cuts, which sound more reasonable by comparison, and carve out exemptions for groups who had been most vocal in their opposition such as the disabled community, he said.

Still, most of the focus will move to the states, Salo added. And that gives Medicaid directors the opportunity to pursue needed changes to the program.

States are looking to the future and the chance to implement policies that would boost the program for beneficiaries, governments, and taxpayers, he said. That means considering payment system innovations that encourage value-based care and better manage the seriously, chronically ill.

Also, he said directors will look to easing red tape for state Medicaid programs such as by streamlining the Medicaid waiver approval process, a concept the Trump administration has backed. Medicaid directors also want to see improvements to ease the burden of regulations on managed care and home and community-based services.

More Stringent Eligibility Rules

Additionally, the next frontier for states will likely include the approval of Section 1115 waiver demonstrations that make eligibility rules more stringent by requiring a minimum number of work hours, beneficiary copays and premiums, and drug screenings.

Salo said he expects these waivers, which have been requested in Indiana, Kentucky, Wisconsin, and Maine, to be approved but also expects legal challenges to follow.

States like New York or California likely would never go for these types of restrictions. But implementing them might actually benefit the long-term sustainability of Medicaid in certain state capitols, as an investment in public faith and credibility, he said. These states likely wouldn’t expand Medicaid without them, so the question isn’t if it’s better or not than traditional Medicaid.

Most Americans (70 percent and 64 percent, respectively) in the June KFF poll did support states’ rights to add work and drug-testing requirements for nondisabled adults on Medicaid.

The CBPP’s Katch warned these types of restrictions would create barriers to accessing care that would undermine health outcomes.

A coal miner in West Virginia, for example, with an opioid addiction and health problems related to time in the mines wouldn’t qualify to get the care he could only get through the program. She said she hopes the “overwhelming support” that came out of the recent battles in Congress might translate into efforts to improve Medicaid, not question it.

She pointed to ideas coming out of states to integrate behavioral and physical health care and housing and food supports, which could make the program more efficient for those most in need.

“We should change the conversation to how do we innovate and make it even stronger?” Katch said.

Drug Costs

Tougher will be efforts to tackle drug costs within Medicaid and apply value-based purchasing principles, which Salo said directors on both sides of the aisle support.

“We need congressional changes for drugs and the drug space to do that,” he said.

But that’s more politically unpopular.

“Helping states and Medicaid at the expense of hurting pharma, that was a trade-off Congress wasn’t willing to make [as part of repeal-and-replace],” he said.

It’s hard to tell if lawmakers would back these types of ideas.

“We’re going to keep the pressure on because it’s important and the right thing to do,” he said.

To contact the reporter on this story: Victoria Pelham in Washington at

To contact the editor responsible for this story: Brian Broderick at

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