Work-for-Medicaid Won’t Be Forced on States, Official Says

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By Sara Hansard

Maine and other states where voters may choose to expand Medicaid won’t be pushed by the government to adopt requirements that recipients work to be eligible for benefits.

“You won’t see us necessarily impose things on states, whether it’s community engagement or cost-sharing responsibilities,” the head of the Department of Health and Human Services agency that is in charge of the health-care program for the poor said Nov. 9. “We think it’s important for states to figure out what’s going to work best for them. We’re responding to what they want to do,” Centers for Medicare & Medicaid Services Administrator Seema Verma said.

“What you will not see from us is a top-down approach forcing states to do things that may or may not work, or that may or may not be appropriate for them,” Verma said. “That’s kind of the approach that we’ve seen from CMS historically, and that is not something that I’m interested in doing.”

Verma’s comments, following the Nov. 7 approval by Maine voters to expand Medicaid coverage under the Affordable Care Act, stuck to the Trump administration’s theme that the HHS will empower states to make their own decisions on running their health-care programs, and reiterated her contention that work requirements will help able-bodied people now on Medicaid become more self-sufficient.

With Maine’s decision, 32 states and the District of Columbia will have expanded Medicaid under the ACA. A number of other states, including Kansas, Tennessee, North Carolina, Georgia, and Idaho, have seen strong pushes to approve Medicaid expansion.

Work Requirement Similar to Welfare

Under the CMS’s push to allow states to enact community engagement—or work—requirements, states would be allowed to kick people out of their Medicaid programs if beneficiaries didn’t comply, Verma said. “The idea here is very similar to what we’ve seen in welfare reform” under President Bill Clinton, she said. Welfare reforms enacted during that administration resulted in fewer people on welfare and more moved to have a job, she said.

Medicaid, which is the largest government health-care program, covering about 75 million people, was expanded under the ACA to cover people with incomes up to 138 percent of the federal poverty level. “One of the major fundamental flaws in the Affordable Care Act was putting able-bodied adults into a program that was designed for disabled people,” Verma said.

Medicaid’s growing costs accounted for about 30 percent of state budgets in 2015, and about a third of doctors won’t accept Medicaid beneficiaries because of low reimbursement rates, Verma said. “Instead of fixing those issues, we now put a lot more people into the program—over 10 million people—into a program that wasn’t designed for this population,” she said.

The CMS is trying to restructure Medicaid to help able-bodied people “rise out of poverty,” Verma said.

Value-Based Drug Pricing

States are challenged by very high-cost drugs, such as Gilead Sciences Inc.'s hepatitis C drug Sovaldi, she said.

The CMS is considering value-based pricing for drugs in the Medicaid program, and it has issued a request for information about the issue, Verma said. “When a new drug comes out, maybe we’re not paying for it necessarily all at once, or maybe you’re paying for it based on its outcomes,” she said.

The CMS looking “very carefully” at allowing state Medicaid programs to have closed formularies, which would limit prescription drugs available to beneficiaries. In addition, “there’s also the issue that states have access to some guaranteed discounts as well,” under which states would get guaranteed discounts in return for providing access to all drugs, she said.

Trying to Ease ACA Burdens

Verma called on Congress to repeal the ACA. The HHS is trying to ease the burden of the ACA, she said. President Donald Trump’s Oct. 12 executive order aimed at expanding association health plans and short-term health plans that don’t comply with the ACA’s requirements would make it easier for individuals to get out from under the law’s burdens, she said.

Premiums in the Obamacare exchanges have risen “more than 100 percent” since the law took effect, while the number of health plans choices have gone down dramatically, she said. In 2018 nearly 30 percent of individuals eligible to enroll in ACA plans, and eight states, will have one choice of health insurance company, she said.

At the same time about 20 million people are paying penalties for not having required coverage under the law, and the penalty is hitting people who don’t make a lot of money, Verma said.

Asked about the ACA’s requirement that health plans cover people with medical problems and provide comprehensive benefits, Verma said a “flexible system” is needed. “Every American needs to figure out what’s going to work best for them and their family. I don’t think we can have a one-size, Washington-fits-all-approach ... on what their health plan should look like.”

To contact the reporter on this story: Sara Hansard in Washington at shansard@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

For More Information

President Trump's Oct. 12 Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States is at http://src.bna.com/t8h.

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