State Medicaid Directors Look to the Future

By Victoria Pelham

State Medicaid directors are hopeful that with the GOP’s American Health Care Act debate behind them, they may now have the chance to seize on other priorities to give the $550 billion program a face-lift.

Matt Salo, executive director of the National Association of Medicaid Directors, told Bloomberg BNA March 30 that they would like a larger role in crafting regulations, because states run and fund their own programs, and they want an easier, more transparent waiver approval process.

It looks like they may get what they wish for: Debates over Medicaid and the future of Obamacare will probably be “almost entirely” administrative and regulatory in the immediate future, he said.

Trump administration health-care officials Tom Price and Seema Verma have already indicated their willingness to work with states more closely on waivers for the safety net program.

“No one ever thought that waiver reform or state plan amendment reform was going to get you $880 billion [the savings over several years from the GOP’s health bill], but if you’re removing mandated cost savings from the equation, there’s a lot of really good things that can be done,” Salo said.

That could mean the 19 states that didn’t expand Medicaid under Obamacare may be able to pursue their own versions of how to expand coverage, he said.


Salo’s organization, composed of state Medicaid directors overseeing the program’s 74 million beneficiaries, is reiterating its call to be viewed as an “equity partner” alongside the federal government rather than just another stakeholder such as hospitals, doctors, health plans and the like.

Salo said they’re expecting this idea to gain traction.

And that could help with addressing other issues that those who actually deliver Medicaid care understand: the practicality, for example, of implementing regulations on managed care, access monitoring and home and community-based services, a growing field.

The NAMD also is looking at delivery system reform that moves away from fee-for-service among many of its legislative priorities for 2017.

States hope to implement value-based purchasing for payments to federally qualified health centers, and ideally all Medicaid providers. They also want every state Medicaid program to be able to include complex groups (seniors eligible for both Medicare and Medicaid and children with serious health conditions) in managed care.

In its legislative planning document for the year, the group said that the current system was holding back Medicaid’s use of value-based purchasing, which focuses more on paying for quality and health outcomes than simply on services provided.

The state directors hope that through either regulations or new laws, state Medicaid programs will be able to “update the tools states may use to allow for aligned value-based purchasing approaches for all Medicaid safety-net providers, including modest down-side risk where consistent with broader statewide reforms,” the document says.

And as far as Medicaid expansion goes, which many see as a winner in the latest health-care fight, the directors want states to be able to pursue coverage gaps in their own ways, such as easing into expanding the insurance for those up to 100 percent of the federal poverty level—not 138 percent, as the Affordable Care Act allowed.

“States need federal partners to take a practical view of what will work in each state,” the NAMD said.

“The specific things Arizona and Massachusetts may want to do may look very, very different, but it’s clear both of them are going to need a friend at [the Centers for Medicare & Medicaid Services] to help move things forward,” Salo said. “There’s lots of things out there that we’re interested in working with the administration on.”

Waivers will be a key part of the answer, Salo said, allowing states to more quickly replicate ideas already approved in other demonstrations and allowing them to implement skin-in-the-game ideas such as Indiana’s Health Savings Accounts or work requirements.

Medicaid directors believe in “live and let live,” as long as they won’t be required to implement these kinds of tools.

This administration, with Seema Verma at the head of the Centers for Medicare & Medicaid Services, will likely be more amenable to state requests for conservative elements.

“It’s generally one side, the left, will say those are bad health policies and ... skin in the game creates a demonstrably bad outcome relative to traditional Medicaid,” Salo said. “And the counterargument is always okay, well how is it compared to nothing?’

“I think that’s probably a more useful framework to think about it in.”

Drumming Up Bipartisan Support

“Health reform is hard, and dismantling existing entitlement programs is doubly hard, so [it’s] no surprise” that the latest proposal to repeal and replace the ACA didn’t go through, Salo said.

Drumming up enough support to push any health-care bills through right now will likely be difficult, he said. It will be tough for House priorities make it through the Senate, and likewise with the Freedom Caucus touting its own more conservative ideas.

In addition, block grants probably won’t garner Democratic support, given that the lump-sum grants will likely cut billions in funds from Medicaid over time.

The NAMD didn’t take a side on the ACA repeal-and-replace issue, other than to say that a cut in dollars would need to be offset by increased flexibility and should include the voice of state Medicaid programs.

The issues still could likely boil up at any time, he said. But, he added, groups like the National Governors Association Bipartisan Health Reform Learning Network (made up of a mix of 14 Republican- and Democratic-led states) have the right idea, working to gather solutions over the next 18 months on issues such as health outcomes and cost in Medicaid.

The NGA during that period will develop goals for improving their state Medicaid programs.

“Anytime you get states together to engage with each other, share lessons learned and best practices you end up with a better program,” Salo said.

“States like Texas, Vermont and Alaska are very, very different, but the experiences they face in trying to run Medicaid programs are very, very similar,’' he said. “So there’s lots of cross-state learning potential and opportunities.”

With the AHCA conversation on the back burner, Democrats like Rep. Diana DeGette (D-Colo.) also have expressed interest in improving the Affordable Care Act on a bipartisan basis, as long as it doesn’t include repeal.

DeGette said in a March 29 speech there are “a number of shared goals that Democrats believe we can work with Republicans on: We can work on reducing premiums, we can work on reducing deductibles and out of pocket costs, we can create conditions that favor competition among health care plans in every sector of the market, we can bring down prescription drug prices, and many more.”

“Now, this sounds simple, but all of these issues are highly technical. Addressing them will require consulting regularly and up front with experts who can guide us to policies that will create more stability in the marketplace without eliminating vital consumer protections,” she said. “And it’s going to take thoughtful bipartisan discussion that might take longer than some people want.

“But you know that’s how you get good legislation that actually works when you’re dealing with complex issues.”

In addition, Salo said, some of the improvements could come from outside the programs themselves.

Republicans have worried about the sustainability of Medicaid, which is projected to grow in costs from $334 billion in federal costs in fiscal year 2015 to $624 billion by 2026.

“If you want to make Medicaid less prevalent or less ubiquitous, that’s great. But the answer to that is making other sources of coverage more robust more available and more affordable,” Salo added.

He said the Medicaid sphere doesn’t want to be 25 percent of state budgets or the biggest contributor for long-term care, births and mental health.

“But we are because no one else is doing it,” he said.

“If you want to be serious about streamlining Medicaid or reducing its footprint in the world ... you don’t just cut it. You make other forms of coverage more relevant for people.

“That’s the conversation that isn’t really happening.”

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

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