What's next for Medicaid: Experts weigh in on waivers, expansion, work requirements

WASHINGTON, D.C.—During a panel discussion Monday about the future of Medicaid, experts dove into some of the most buzzed-about topics surrounding the program, including states’ moves to expand eligibility and the role of waivers.

Indeed, one of the major issues to watch will be what happens in the remaining states that haven’t expanded Medicaid, Sara Rosenbaum, a health policy and management professor at George Washington University, said at the event presented by the Alliance for Health Reform.

They could opt for a standard expansion of the program, or explore section 1115 waivers under the Affordable Care Act, which lets states experiment with changes to the program such as instituting work requirements for able-bodied beneficiaries, she said.

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But in Rosenbaum’s view, “I think, quite frankly, 1115 has been way overblown.” The waivers don’t allow the Department of Health and Human Services “wholesale authority” to make changes to Medicaid, she said, but rather are meant to be a pilot and testing system.

Gail Wilensky, a senior fellow at the Project HOPE and a healthcare economist who has served various roles in Republican administrations, also questioned whether states might be better off re-examining work requirements for food stamps instead of Medicaid.

“The notion of cutting off someone’s healthcare because, for whatever reason, they aren’t following through on the work activity or whatever it is they’re supposed to be doing, seems not very likely,” she said.

Differing views on Medicaid expansion

Whether they choose traditional Medicaid expansion or a waiver, there is good reason for the holdout states to consider a policy change, according to Sara Collins, the vice president of healthcare coverage and access for The Commonwealth Fund.

“It’s pretty evident by now—with three full years of experience in the Medicaid expansion—that it’s made a significant difference in coverage in states across the country,” she said.

For example, the nine states that saw their uninsured rates drop by 10 percentage points or more in 2015 all had expanded Medicaid eligibility, she noted, and coverage gains have been especially strong among low-income individuals since the Affordable Care Act took effect.

While it is impossible to ignore that Medicaid expansion has been the ACA’s “success story,” Wilensky said, she also took issue with the fact that federal match rates for the expansion population are much higher than they are for the base Medicaid population.

“It makes no sense for Medicaid to have different match rates for different populations,” she said.

She acknowledged the policy was put in place to entice states to expand their programs, but added that “once we are on any kind of stable footing, that needs to be resolved.”

Big-picture Medicaid reforms in play

“The other big issue that everybody’s watching,” according to Rosenbaum, is what will happen with broader Medicaid overhauls, including delivery system reform—such as the push to integrate physical and mental healthcare—and new funding structures like per capita caps and block grants.

For her part, Wilensky said she wishes healthcare stakeholders wouldn’t be so “dismissive” of funding proposals like per capita caps and block grants, which Republicans have included in their recent ACA repeal and replacement proposals.

She also noted that states don’t get enough credit for creative thinking in the realm of healthcare policy.

“The states have shown themselves very able to find various types of financing strategies, the end result of which is their part of the money is less than what is statutorily required,” she said.

To Rosenbaum, though, any major changes on the horizon for Medicaid have to take into account that the program has become far more than simply an insurance coverage mechanism.

Medicaid, she noted, offers a central strategy for dealing with the highest priority population health issues, creates a financing system that anchors medically underserved areas, and acts as a first responder of sorts in health crises.

“There really is no substitute for this program,” Rosenbaum said.