Second Half Kickoff: The Outlook for Medicaid – 2018

This has shaped up to be an extremely active year for Medicaid. From fighting off proposals to cutting funding from the program, to the Trump Administration’s efforts to change Medicaid administratively as we know it, to active state legislatures and, in a couple of cases, citizen referendums, to changing their states approach to Medicaid, this is arguably the most active time since the fallout of the NFIB vs. Sebelius case, which decided the federal government could not mandate state participation in Medicaid expansion.

As we approach the second half of 2018, here are some topics for plans to monitor in the world of Medicaid:

 Work Requirements

 Kentucky’s Medicaid work requirement mandate in its Section 1115 waiver faces its day of reckoning in court Friday.

In a case with major national implications, the Trump administration and advocacy groups are set to argue in federal court in Washington Friday over whether the Department of Health & Human Services (HHS) secretary has the legal authority to allow Kentucky to establish a work requirement and other tough new conditions on people receiving Medicaid coverage.

U.S. District Judge James Boasberg, an Obama administration nominee, will hear oral arguments in the case, which was filed in January by the National Health Law Program, the Kentucky Equal Justice Center, and the Southern Poverty Law Center.

The groups, representing 16 beneficiaries, are suing to block Kentucky’s unprecedented Medicaid waiver requiring beneficiaries to work or participate in “community engagement” activities such as job training, school, or volunteering. The federal government never previously permitted states to impose work requirements as a condition of Medicaid eligibility. The central issue in the suit is the scope of the HHS secretary’s authority to establish Section 1115 demonstrations, which have grown increasingly ambitious in reshaping state Medicaid programs.

Virginia Adopts Expansion. So Who Is Next?

The Virginia General Assembly has passed Medicaid expansion as part of a two-year budget bill that could provide coverage to 400,000 newly eligible residents.

The action makes Virginia the 33rd state in the U.S. to expand Medicaid under the Affordable Care Act (ACA).

Governors’ races in states such as Florida and Kansas, along with ballot initiatives in Idaho, Nebraska, and Utah, are being watched closely by Medicaid experts this year.

Experts say the recent developments are fueled, in part, by greater certainty of continued federal support for Medicaid, following last year’s unsuccessful Republican efforts to repeal and replace the 2010 healthcare law. Medicaid expansion also established itself as an issue voters are more aware of and that many support, they say. Meanwhile, in Montana, supporters are also focused on renewing its expansion, which covers nearly 100,000 people and is set to expire next year.

Maine Referendum Compliance

Last fall, Maine became the first state to adopt expansion via a ballot referendum, which garnered nearly 60% voter approval. The state’s Republican Gov. Paul R. LePage, a staunch expansion opponent, refused to implement it, but last week, a Maine superior court judge ruled the state must comply with the law and move forward. The governor is appealing the decision to the State Supreme Court.

Medicaid Cost-Sharing Regulation

The Centers for Medicare & Medicaid Services (CMS) has been asked by the administration to explore what cost-sharing “flexibilities” may exist. This could include relaxing the tracking requirements (states are currently required to track beneficiary cost sharing to ensure they do not reach the statutory 5% of income cap) as well as a redefinition of “nominal” since that is defined in the regulation but not in the statute. We don’t expect a notice of proposed rulemaking until late this year at the earliest.

“Charge” Eligibility Proposals for Medicaid/CHIP

Under draft changes proposed by the Trump administration, use of health, nutrition, and other non-cash programs by an individual or a family member, including a citizen child, could result in the federal government denying an individual adjustment to lawful permanent resident status or entry into the United States. Current policy does not allow the federal government to consider the use of non-cash benefits such as health and nutrition programs in public charge determinations. Under the draft proposed changes, the federal government could consider previously excluded health, nutrition, and other non-cash programs in public charge determinations. These programs would include Medicaid, the Children’s Health Insurance Program (CHIP), and subsidies for Marketplace coverage. In addition, the changes would newly allow the federal government to take into account use of programs by citizen children and other family members in making a public charge determination.

The changes in public charge policy would likely lead to decreased participation in Medicaid, CHIP, Marketplace coverage, and other programs among legal immigrant families, including their citizen children, even though they would remain eligible.

Medicaid for All

 Medicaid, as we know it, is the nation’s government-run healthcare program for the poor. You have to make below a certain amount of money to qualify for it, and it’s free for most. But what if people – regardless of their income – could buy a Medicaid plan?

That idea is gaining popularity among state lawmakers. Last year, a “Medicaid buy-in” or “Medicaid-for-all” bill made it as far as the governor’s desk in Nevada. Gov. Brian Sandoval vetoed it, but it inspired similar efforts around the country.

Six states – Iowa, Massachusetts, Minnesota, Missouri, New Jersey, and Washington – have active legislation to establish a Medicaid buy-in program. In four others, bills were proposed but stalled. New Mexico has set up a task force to study a Medicaid buy-in program, and Connecticut may do the same.

The premise of these buy-in bills is like Nevada’s: Medicaid plans would be offered on each state’s Health Insurance Marketplace, and people who don’t traditionally qualify for Medicaid could pay premiums and copayments. In Missouri, though, the Medicaid buy-in plans would only be expanded to people who have a disability and are employed.

According to experts, each state likely has a different reason for considering this option.

Federal Reform Votes: Medicare for All, Graham-Cassidy

Although neither are likely to pass either this year’s or next year’s Congress, the positioning of the Democrats’ and Republicans’ efforts to rewrite the ACA continue to pose questions about what position Medicaid is in should there be any real and substantive change to the ACA.

 

 

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