Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.
Another push to reduce Medicaid’s footprint is taking hold after the recent CMS approval of an Iowa Medicaid waiver.
The safety-net program covers the cost of medical bills acquired three months before an enrollee applies under the retroactive eligibility provision. But the Centers for Medicare & Medicaid Services decision means Iowa can now opt out for most new beneficiaries, except pregnant women and babies, according to the Kaiser Family Foundation.
Barbara Eyman, a principal with Eyman Associates, which represents safety-net hospitals, told Bloomberg Law that the move goes further than past administrations allowed, giving more of a carte blanche without restrictions that were previously required in state waivers like Arkansas’s. It’s likely to mean more states will seek and get the coverage exemption, she said, as part of a checklist of steps for those “wanting to save some money and ... reduce the scope of their Medicaid program.” Iowa’s decision is projected to cut Medicaid spending by $36.8 million ($9.7 million for the state) and enrollment by 3,344 people per month, according to the KFF.
Cutting retroactive eligibility is part of a broader Trump administration push to allow states to add more parameters to dial back their Medicaid programs. The $550 billion health insurance program, which covers more than 74 million people, has faced a persistent battle this year from the GOP over whether its growing spending is sustainable and whom it should serve.
With the failure of congressional overhauls, many of those battles are now moving through state waiver requests. Federal officials have promised flexibility but not yet acted on some of the most contentious ones. Still, in recent days they have signaled the intention to move forward on those that especially add more expectations for working age, able-bodied adults.
Michael Cannon, director of health policy studies with the libertarian Cato Institute, called the retroactive eligibility waivers “emblematic of what’s going to happen with Medicaid until Congress can get its act together.”
“Commercial insurance typically doesn’t have retroactive coverage, so with the expansion population, I think the thinking is that it looks more like commercial insurance, but also it saves a lot of money,” Eyman said.
“With the program growing and consuming more and more of state budgets, there’s just a desire to look at ways to contain those costs,” she said.
Medicaid is often a top spending item for states, with the price tag on the rise and projected to reach $624 billion by 2026, according to the Congressional Budget Office.
The three-month loop-back period is expensive for states to cover, Cannon said. More states will likely start to consider this as an option in light of the Iowa waiver approval.
This type of demonstration would allow states to cut back on dollars without facing political blowback, he said.
“This is a way for states to reduce Medicaid spending without appearing to deny services to anyone and without cutting prices to any providers either,” Cannon said.
In contrast, removing the retroactive coverage could place the poor and vulnerable in a tough spot.
For example, the three-month window is supposed to make it easier if a new applicant has dealt with a car accident or trauma in the days leading up to the start of the month, delaying their Medicaid application during the most high-cost period of treatment, Eyman said.
“With retroactive coverage all that stuff gets built in,” she said.
Particularly at risk could be seniors and the disabled.
Jessica Schubel, an analyst with the left-leaning Center on Budget and Policy Priorities, warned that removing the provision would affect patients in need of long-term services and supports during what can be complex, confusing eligibility determination processes.
Retroactive eligibility offers “a measure of financial protection” for enrollees that allows them to get the care they need, especially for those who are just entering a nursing home or aren’t fully capable of doing their own paperwork, she told Bloomberg Law.
Removing it just to save money isn’t in line with the Medicaid statute’s goal or the purpose of the Section 1115 demonstrations, she said. And it would hurt the financial security of some of the most vulnerable patients.
“What this waiver really shows is that CMS is willing and interested in approving waivers for states that simply don’t agree with Medicaid law,” Schubel said.
Cannon argued that states need to be able to experiment with plans like this to determine the best balance between offering too much or not enough support. That could reap the benefit of “making more people provide for themselves” and pushing them away from a situation where they need health care but can’t afford it.
“What we’re confronting here is the Samaritan’s dilemma: If you help too little, people suffer, and if you help too much, people don’t take care of themselves,” he said.
Those steps also have providers concerned that those extra costs will be shifted onto them, Eyman said. Cutting back on coverage “increases uncompensated care for hospitals and other providers at a time when ... [cuts] are still under current law and have taken effect and when other resources are dwindling for safety-net providers.
“If your state is cutting retroactive eligibility, that’s just another blow,” she warned.
That’s what really at stake here, Cannon agreed, pointing to research that found Medicaid beneficiaries receive about 40 cents on the dollar of Medicaid spending with the rest going to providers.
“The patient has already received the care and then the question is just whether the taxpayers are going to have to pay for it,” he said. “So the biggest advocates of these loop-back periods are the providers.”
To contact the reporter on this story: Victoria Pelham in Washington at email@example.com
To contact the editor responsible for this story: Brian Broderick at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)