The Centers for Medicaid and Medicare Services on Monday announced a massive update to managed care in Medicaid and the Children’s Health Insurance Program. In doing so, it attempts to bring the program in line with the changes Medicaid has undergone over the last decade. The new rule is the agency’s guideline for modernizing the low-income health care program and strengthen its quality of care.
Medicaid managed care services are offered by risk-based managed care organizations, which contract with state Medicaid programs to offer care to enrollees. Essentially, they are the private insurer alternative to traditional fee-for-service Medicaid.
CMS hasn’t issued any new regulations to the program since 2002, but a lot has changed since then. Not only has the Medicaid program itself grown under the Affordable Care Act, but now about 80 percent of Medicaid enrollees are served through managed care delivery systems, according to CMS.
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President Barack Obama is calling on taxpayers to shell out more money for his health reform law’s disastrous Medicaid expansion.
The president recently asked Congress to approve $106 billion in new Medicaid spending over the next 10 years. Nevermind that the Congressional Budget Office just concluded that, as is, Medicaid spending will add $1.3 trillion to the federal deficit by 2025. That’s $136 billion more than the agency projected last year.
And it’s not as if those dollars are being spent wisely. Obamacare’s Medicaid expansion is sticking taxpayers with a huge bill while doing little to help low-income Americans actually gain access to high-quality healthcare.
In a report, the Department of Health and Human Services said Monday that there are around two million low-income, uninsured people in those 20 states who have a mental illness or substance abuse disorder.
Medicaid has long been a joint federal-state program that offers near-free care to the very poor. Under the health law, Washington pays almost all of the costs of insuring people who have slightly higher incomes.
Opponents of expansion argue that neither states nor the federal government can afford to further swell the program, and that a shortage of providers to treat the newly insured poses an additional challenge in trying to enroll more people in it.
Many have blamed the increase on the Affordable Care Act, which expanded health insurance coverage to millions more Americans through Medicaid — known as Medi-Cal in California — and government-run health exchanges.
Last year, a national survey of 2,099 emergency doctors by the American College of Emergency Physicians reported that 28 percent of respondents said the volume of ER patients in their hospitals “increased greatly” since the health law took effect. And 47 percent said the volume “increased slightly.”
The central feature of the latest plan in Nebraska is to deliver Medicaid expansion benefits through health plans sold on the Obamacare exchange, instead of through the state’s managed care system. But, at the end of the day, this is really just a more expensive way to expand Medicaid under Obamacare.
Nebraska’s own actuaries estimate that using these plans to expand Medicaid would increase per-person costs by 94% next fiscal year. By 2021, the cost difference is expected to reach 150%. Overall, this plan would cost taxpayers billions of dollars more (as if regular Medicaid expansion wasn’t expensive enough) and leave even fewer dollars for the truly needy.
California politicians and interest groups have been working overtime to figure out a way to fix an illegal Medicaid provider tax—the subject of my recent Mercatus Center study. These taxes are problematic because they are generally accompanied with the guarantee of increased Medicaid payments to the providers paying the tax—payments largely financed with federal matching funds. As a result, provider taxes, which reek of government favoritism because of how the benefits often target select providers, raise Medicaid spending.
California’s tax is illegal under federal law because the state was holding numerous insurers harmless from the tax that should not have been. The state has recently come up with a revised tax plan that it is submitting for federal approval.
Six of the 32 states implementing the Affordable Care Act’s Medicaid expansion to date have done so through Section 1115 waivers. Using these waivers, the Centers for Medicare and Medicaid Services has approved terms that extend beyond the flexibility provided by federal law. Section 1115 waivers authorize research and demonstration projects that, in the view of the Health and Human Services Secretary, further the purposes of the Medicaid program. The ACA implemented new requirements for these waivers, including that states must have a publicly available, approved evaluation strategy. States also must submit an annual report to HHS that describes the changes occurring under the waiver and their impact on access, quality, and outcomes.
State Medicaid agencies say Congress’ decision to suspend the Affordable Care Act’s tax on health insurers for one year is a good first step, but they are pushing for its permanent repeal.
While most private health insurance plans have had to pay the tax themselves, states that contract with Medicaid managed-care plans have had to cover the premium tax to ensure that the health plans receive actuarially sound rates. Thirty-eight states and the District of Columbia contract with Medicaid managed-care plans.
While many Americans are obsessively following the presidential primary campaign, health policy experts are concerned about little-noticed Republican primary contests for state legislative seats that could determine the fate of Medicaid expansion in Arkansas and other states.
In Arkansas, Tuesday’s elections include several primary contests pitting Republican state lawmakers who voted for Medicaid expansion to low-income adults against GOP primary challengers who promise to end the state’s coverage expansion. Republican Gov. Asa Hutchinson needs votes from 75% of the GOP-controlled Legislature to win approval for his conservative changes in the state’s Medicaid expansion program, or else the expansion will end this year. So he can’t afford to lose any expansion allies.
Right now, the New Hampshire House is considering reauthorizing Medicaid expansion under ObamaCare. Doing so would be a big mistake that our state simply cannot afford to make.
In 2014, New Hampshire expanded its Medicaid program under the Affordable Care Act. Previously, to qualify for Medicaid a person needed to be both poor and medically needy (pregnant women, children or disabled). Under Medicaid expansion, a person needs only to be below 138 percent of the federal poverty level. That means that able-bodied adults, even above the poverty line, would have taxpayers buy health insurance for them.
The measure that was passed in 2014 ends on Dec. 31, 2016. That means that if the program is not reauthorized, eligible able-bodied adults would no longer have taxpayer-funded health insurance.
The reauthorization bill currently sits before the House Finance Committee to make sure our Medicaid policy is on a solid financial footing. Given the total size of the program – close to $500 million per year – this seems like a prudent step.