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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