States Work to Find Common Ground on Health-Care System Improvements

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By Victoria Pelham

States have been working to cobble together health-care solutions that would work for them, as Congress has struggled to agree on large-scale overhauls and remains mired in bitter debates.

Amid the uncertainty, the National Governors Association Bipartisan Health Reform Learning Network came together for the first time this week with Centers for Medicare & Medicaid Services Administrator Seema Verma. With members from 14 states evenly split between Republican and Democratic leadership, the bipartisan group didn’t exactly reach a consensus on priorities or strategies, organizers said.

But it didn’t hit an impasse either. The health-care leaders highlighted a desire for state flexibility on Medicaid waivers and new ideas to “maintain and sustain momentum” and “to drive more value into the system by improving outcomes and lowering costs,” Hemi Tewarson, director of the NGA Center for Best Practices Health Division, said in a press call June 2. That included looking at cost drivers such as expensive drugs.

Discussions

“I was a little worried it would be hard to get some good discussion because of the politics, polarization, and controversies,” Scott Pattison, executive director of the NGA, said on the call.

Instead, conversations have been productive, he said, alongside active efforts from governors to make sure lawmakers understand how health-care proposals would affect those on the ground.

Headed by Virginia Gov. Terry McAuliffe (D), the team comprises senior state leaders such as health policy advisers, secretaries of health, Medicaid directors, and insurance and public health commissioners.

The network’s meeting with Verma over two days the week of May 29 gave them the opportunity to field questions and concerns on how current GOP proposals might shift health-care costs to states.

If the House-passed American Health Care Act were to become law, it would strip $839 billion from the Medicaid safety net over the next decade, according to projections from the Congressional Budget Office. The repeal-and-replace Obamacare bill, which would aim to put Medicaid on a budget with the option of either lump-sum federal grants or capped per-enrollee allotments, would likely lead to a 17 percent drop in the number of beneficiaries—14 million fewer people.

Advocates have worried how that strain would play out in states, which could either up their share of Medicaid dollars to try to offset the steep drop-off in federal funding or more likely would have to tighten their belts in the benefits, services, and people tht programs would cover.

This is where some of the partisan issues come into play. Tewarson said network members had varying positions on the potential federal financing changes.

“Some states feel very strongly per-capita caps would have a very significant negative impact on states; other states think there could be more to think about... on that mechanism,” she said.

Medicaid expansion was also controversial, with states on both sides of the aisle having grown their programs under the Affordable Care Act. The AHCA would wind that expansion down. State leaders in expansion states really don’t want to see that happen, she added.

Finalizing Recommendations

The group did manage to find common ground on issues like giving states more leeway for innovation under Section 1115 Medicaid demonstration waivers—which the Trump administration has endorsed—and a shared vision to holistically improve the health-care system.

High-cost drugs, as well as an aging population, are major factors in high and growing health-care costs that could be addressed with increased flexibility, they agreed, and any solutions would have to look at the big picture of how they intersect with other federal programs such as Medicare.

Many Republican lawmakers have touted health-care overhauls in light of sustainability for programs like Medicaid. Federal spending for that is expected to grow and reach $624 billion by 2026, according to the CBO, up from $545 billion in 2015.

“In our conversations with state leaders we’re really focused on, ‘What are the priorities in your state and how do you want to explain that?’” Tewarson said.

“We’re really talking about what’s important to them,” she said. On some areas of concern, they learned “red and blue states alike have some commonality.”

The group of governors and state health leaders is finalizing its recommendations, though there is no set time slated for their release.

The National Association of Medicaid Directors, in a response sent May 26 to Senate Finance Committee Chairman Orrin Hatch (R-Utah), shared many similar ideas as the NGA members—such as focusing on bipartisan, value-based innovations and a holistic approach. Hatch had requested input from industry groups and other stakeholders on ideas for health-care reform legislation.

The group has also made a legislative priority of allowing state Medicaid programs to exclude some high-cost drugs from Medicaid’s optional prescription drug benefit.

“Any attempt to unilaterally limit the federal government’s financial responsibility must simultaneously provide a clear and powerful statutory framework to enable states to adapt their programs accordingly,” Tom Betlach, Arizona Medicaid director and past NAMD president, said in the NAMD comments sent to Bloomberg BNA.

“These changes must acknowledge the true cost centers of Medicaid spending and how interconnected the program is to the rest of the health care system,” Betlach said. “Failure to do so would constitute the largest intergovernmental transfer of financial risk to states in our country’s history.”

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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