With Medicaid In Flux, States May Take The Lead On Reform

Overhauling the Medicaid program nationwide would take time, but states won’t have to wait to start making changes.

AP Photo/Alex Brandon
Erin Durkin
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Erin Durkin
Jan. 5, 2017, 8 p.m.

Con­gres­sion­al Re­pub­lic­ans could take years to fig­ure out how Medi­caid fits in­to their vis­ion of health care re­form, leav­ing states with a tent­at­ive but wide-open win­dow to ex­per­i­ment with their own pro­grams.

If Re­pub­lic­ans’ plan to re­peal Obama­care mir­rors the one that they man­aged to pass out of Con­gress last year, the law’s Medi­caid ex­pan­sion—and the gen­er­ous bump in fed­er­al fund­ing it provided—will be on the chop­ping block.

It’s not clear how the Medi­caid ex­pan­sion would fit in­to their plan to delay the ef­fects of re­peal for a few years, or wheth­er the pro­cess of re­pla­cing Obama­care would also be a vehicle for a broad­er re­struc­tur­ing of Medi­caid. House Speak­er Paul Ry­an and oth­er GOP law­makers have pro­posed turn­ing the pro­gram in­to a block grant to the states, or im­pos­ing new caps on the pro­gram’s spend­ing.

But amid all that un­cer­tainty, ex­perts say, states can be­gin mak­ing changes on their own—par­tic­u­larly if the Trump ad­min­is­tra­tion is eager to grant waivers that re­lax fed­er­al rules so states can test new mod­els.

“The words ‘block grant’ are simple, [but] it is com­plex to try to im­ple­ment and will have very dif­fer­ent ef­fects across the states and very dif­fer­ent im­pacts de­pend­ing on the level of fund­ing as­so­ci­ated with the block grant … which is why waivers are a safer bet for states,” said Di­ane Row­land, ex­ec­ut­ive vice pres­id­ent of the Kais­er Fam­ily Found­a­tion.

Chris Jac­obs, a con­ser­vat­ive policy ana­lyst and CEO of Ju­ni­per Re­search Group, sug­ges­ted that the next ad­min­is­tra­tion should al­low for blanket waivers, which means the Health and Hu­man Ser­vices De­part­ment would auto­mat­ic­ally ap­prove waivers that meet cer­tain re­quire­ments.

He ad­ded that Trump’s picks for top health care jobs—pick­ing Rep. Tom Price to head HHS and Seema Verma to lead the Cen­ters for Medi­care and Medi­caid Ser­vices—in­dic­ate that the ad­min­is­tra­tion is open to provid­ing such flex­ib­il­ity.

“I think you’ve seen with the Price ap­point­ment and the Verma ap­point­ment that sort of men­tal­ity of, ‘All wis­dom doesn’t em­an­ate from Wash­ing­ton and does not em­an­ate from Se­cur­ity Boulevard in Bal­timore,’” Jac­obs said, re­fer­ring to the CMS headquar­ters. “Let’s give states more free­dom and more flex­ib­il­ity to man­age their pro­grams as they see fit.”

Price would be a strong pro­ponent of in­nov­a­tion at the state level, said Robert Mof­fit, a seni­or fel­low at The Her­it­age Found­a­tion’s Cen­ter for Health Policy Stud­ies. Mof­fit noted that Price had sponsored le­gis­la­tion in the past to provide states with more au­thor­ity over health care pro­grams.

And Verma has sig­ni­fic­ant ex­per­i­ence with re­design­ing Medi­caid pro­grams. She helped se­cure fed­er­al waivers for mod­i­fied ver­sions of Obama­care’s Medi­caid ex­pan­sion, in­clud­ing the “Healthy In­di­ana” plan ad­op­ted by Vice Pres­id­ent-elect Mike Pence as well as pro­grams in Iowa, Ken­tucky, and Ohio.

There is a lot of pent up de­mand from gov­ernors for more flex­ib­il­ity over the Medi­caid pro­gram, said Josh Archam­bault, a seni­or fel­low at the Found­a­tion for Gov­ern­ment Ac­count­ab­il­ity.

Law­makers have already star­ted seek­ing in­put from GOP gov­ernors. In a let­ter last month, Sen­ate Fin­ance Com­mit­tee Re­pub­lic­ans re­ques­ted ideas from Re­pub­lic­an gov­ernors about how to provide more flex­ib­il­ity over their states’ Medi­caid pro­grams.

Archam­bault said that con­ver­sa­tion will likely re­main broad, while spe­cif­ic waiver re­quests would yield more de­tailed pro­pos­als.

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