By Jocelyn Guyer
As we blogged a few weeks ago, the nation’s Republican governors have sent a letter to Congress asking for the stability protections included in the Affordable Care Act to be revoked. The debate already has turned ugly, with these Governors asserting that the stability protections are “unconscionable” and leave them with no choice but to cut other important state priorities. More recently, Governor Brewer of Arizona requested that the Department of Health and Human Services waive the stability protections for her state so that she can cancel coverage for 280,000 low-income people.
On Friday, Secretary Sebelius issued a letter that responds to the controversy by offering some concrete, constructive alternatives to states. Instead of simply canceling coverage for hundreds of thousands of people, the letter highlights a range of strategies available to states for achieving short-term Medicaid savings. All of the strategies rely on existing state flexibility, and many of them would improve patient care at the same time as generating savings. For example, the letter outlines state initiatives to more effectively deliver care to the costliest Medicaid beneficiaries; better manage Medicaid pharmacy benefits and secure better prices from the pharmaceutical industry; and promote health homes for people with chronic conditions.
Secretary Sebelius does not tip her hand as to how she’ll respond to Governor Brewer’s request for a waiver of the stability protections. She simply says that she continues to “review what authority, if any, I have to waive the maintenance of effort under current law.” Regardless of how long she takes to consider the issue, we are having a hard time at CCF seeing how HHS could ever justify using its waiver authority in this way. This authority is supposed to be used to allow demonstration projects in a state’s Medicaid program that “furthers the purposes” of the program. It is impossible to imagine that cutting coverage for hundreds of thousands of people could be construed as meeting this objective.
For now, though, one thing is clear. States do have choices when it comes to how they manage Medicaid and their budget crises. My colleague, Tricia Brooks, already has addressed this topic, providing examples of good, bad, and ugly ways to move forward with Medicaid cost containment in this environment. With the Secretary’s letter, it is clear that CMS also stands willing to work with states to find better alternatives than canceling coverage.
