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

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.