Retrenched Medicaid Likely Under New President, Congress

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By Victoria Pelham

Nov. 10 — A Republican sweep of the White House and Congress has renewed questions and uncertainty on the future of Medicaid, including whether to return its coverage to pre-Obamacare levels.

A Trump administration likely means the program would be changed to focus on the neediest beneficiaries, with Medicaid as a “temporary social support backstop” rather than comprehensive insurance, health-care consultant John Feore told Bloomberg BNA. Other sources said the changes could come in the form of block grant payments to states, per capita caps and expansion changes such as eligibility requirements that have been in states’ waiver applications to the federal government.

“There’s going to have to be some back and forth,” making it difficult to predict what Medicaid might look like in the coming years, Feore, with Washington-based Avalere Health, said. “Perhaps what we’ll see is a modified Medicaid program that kind of refocuses what it’s trying to do but still takes care of the people that were originally intended.”

Under the Affordable Care Act, more than half the states expanded Medicaid coverage to low-income adults. A further 1.2 million Americans could have joined Medicaid’s rolls in 2017.

“Medicaid is now, without a doubt, a mainstream health insurance program, not a welfare medical program,” Center for Medicaid and CHIP Services Director Vikki Wachino said Nov. 8 on the eve of election results.

She touted the progress the system had made in moving into community-based health care and upgrading from an “imitator” of Medicare to an innovator, the result of eight years of shifts that had been the largest since the program’s 1965 inception. Before a conference of state Medicaid directors Wachino said, “Some day its full potential will be realized.”

Others at the National Association of Medicaid Directors event said that much of this would continue no matter the election outcome.

Expectations in a Lurch

But the surprise results have left expectations for the program in a lurch.

Dennis Smith, who served as the head of the Medicaid program under George W. Bush’s administration, drew some parallels between the two periods as a changing of the guards. He told Bloomberg BNA the new leadership would bring in a fresh chance to re-evaluate the $550 billion program and to put the reins back in the hands of the states that administer it.

“Interests are now aligning between the Republican Party holding the majority in Congress and states... The administration has not gone as far as states want to go in terms of flexibility, so it’s a new opportunity to have those discussions all over again,” Smith said.

Still, there are differences. President-elect Bush during his campaign had offered forward more proposed health-care policy details to deliver on, Smith said.

Meanwhile, President-elect Donald Trump, who is also not bringing in a prepackaged Cabinet as Bush did from his governorship, has been more vague in his campaign.

Trump’s administration proposals unveiled Nov. 10 listed a plan that would “maximize flexibility for states in administering Medicaid, to enable States to experiment with innovative methods to deliver healthcare to our low-income citizens” (see related article) .

State Flexibility

Ultimately, the forms this could take would change the direction Medicaid has been heading in.

Though most Democrats will probably oppose block grants, the Bush-era suggestion that Rep. Paul Ryan (R-Wis.) has also backed would grant states a more broad license to spend federal Medicaid money as they please, including determining their own eligibility definitions for the first time.

States such as Arizona, New Hampshire and Kentucky have been pushing to add employment parameters to their Medicaid expansion, as well as provisions that would charge for non-emergency care use of emergency rooms. Current Centers for Medicare & Medicaid Services leadership has been consistently rejecting those that they believe would undermine the program’s care and access goals.

But with Trump in the White House modifications like these might become the norm, Feore said. Existing state waivers could be left alone or could be tweaked. It’s up in the air. Further still Trump’s vocal support of repealing the ACA could mean a reversal of the expansion—likely in the form of a reconciliation package—and that the millions of newly insured could lose Medicaid coverage.

How likely are the proposals to go through? “I don’t think the overall wishlist that Republicans have wanted will be achieved,” Feore said.

Many of the decisions would need to pull 60 Senate votes to avoid filibuster, but if Trump works in a bipartisan way, some form of block grants or other “significant” measures could pass, according to Feore.

Thomas Scully, who served as the CMS administrator in Bush’s administration and is now a partner with Welsh, Carson, Anderson & Stowe in New York, believes block grants will not be able to garner enough political support, so Republican lawmakers will move instead to per capita caps. A long-time advocate of these, he believes they are the answer to “phantom schemes” that place unfair rules on Medicaid funding allowing some states to benefit and not others.

Per capita spending would allocate a certain amount of health-care funding per beneficiary in entitlement programs.

“The number one program that needs to be fixed is the Medicaid program. The reality of the fact is that the financing system is completely and totally broken and it has been for years and nobody wants to talk about it.

Scully said the “time is ripe for big entitlement reform.”

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

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