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    Eight ways Trump could change Medicaid


    Medicaid is the single largest source of insurance in the country, covering more than 71 million Americans, according to CMS. That means that one in five Americans, today, receives healthcare services paid for by the Medicaid program.


    However, the Medicaid program is a 1965 healthcare benefit living in a 21st century world, says Tom Barker, co-chair of Foley Hoag’s healthcare practice. “Although the Obama administration should be commended for trying to make Medicaid work better, the program is still lacking the tools that it needs to adapt to today’s healthcare system,” Barker says. “The Trump administration has a unique opportunity to do so.”

    That being said, here are 8 ways that Trump could change Medicaid.

    1.   Repeal or modify Medicaid expansion.

    The Affordable Care Act (ACA) sought to offer coverage to a portion of the nation’s uninsured population by mandating that states offer Medicaid to all Americans who fell below specified income levels, according to Piper Su, vice president, McDermott+Consulting.


    “In order to assist with the cost of covering these new enrollees, the law provided ‘enhanced’ federal fund matching rates that started at 100% and phased down to 90% over time,” she says. “The Supreme Court modified this requirement in its decision in NFIB [National Federation of Independent Businesses] vSebelius to make Medicaid expansion a voluntary option, but still more than 30 states elected to take advantage of the generous match to cover more individuals, and 16 of those states are led by Republican governors.”

    In the context of repeal, Su says that the new Congress could modify the ACA language to eliminate the enhanced match altogether, thus leaving states to cover a much greater portion of the cost of the population—meaning many may be forced to cut back eligibility. 

    “It could repeal the expansion language altogether, or it could place additional restrictions on the program expansion,” she says. “All of these would potentially result in the loss of coverage for millions of individuals covered under the expansion option. The Trump administration could also take administrative action to limit benefits or place additional restrictions on coverage, which would also likely result in reduced access to Medicaid. That said, if a state’s experience in Medicaid innovation yield quantifiable cost savings and positive improvements in beneficiaries’ health, that state(s)’ model could be viewed as a model and diffused across additional states—the original purpose of CMMI [Center for Medicare & Medicaid Innovation].

    Barker shares a similar viewpoint. “The existing Medicaid program, since the enactment of the ACA, creates a gross inequity among states and beneficiaries,” he says. “Under the ACA, states receive higher federal matching payments for able-bodied adults with income above the federal poverty level than they do for elderly or disabled individuals—including children—with income below the federal poverty level. Revising the Medicaid expansion enacted as part of the ACA may attempt to address this inequity.”

    2.   Continue driving the trend to Medicaid managed care, especially if the program is converted to a block grant or to a per-capita allotment. 

    “States will continue to rely on managed care plans to manage the benefit,” says Barker. “Certain benefits (e.g., mental health, dental, vision) are likely to continue to be carved out, even for states that retain some form of fee-for-service Medicaid.”

    3.  Transition Medicaid to a block grant program.

    “Republicans have long voiced a preference for changing Medicaid funding to a block grant structure, whereby states would get increased flexibility in operating their program and the federal government would provide a locked-in amount of funding that caps its liability for additional costs in the program,” Su says.

    She explains that while governors in both parties are warm to the concept of increased program flexibility, they also fear that the block grant structure would ultimately be used as a federal spending reduction tool, thus shifting more of the program costs to states over time. “Supporters of the block grant proposal tout the benefits of program flexibility and less interference by federal regulators, while critics cite concerns about decreased federal support and the resulting limitations on program access and benefits,” she says.

    4.   Provide more flexibility to states.

    Much of this can be done administratively, Barker says, without the need for legislation, by reforming and simplifying the section 1115 waiver process, revising the ACA section 1332 waiver process, and enhanced indications of flexibility to states through state Medicaid directors’ letters. 

    “CMS can also revise and amend regulations issued by the Obama administration, including the Medicaid managed care regulation issued earlier this year,” he says.

    Next: Children's Health Insurance Program



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