Adam Searing: Alright welcome everyone. We're gonna wait one more minute. And then we're gonna get started for our webinar today. So
Adam Searing: got a lot of people drawn.
Adam Searing: All right, let's let's go ahead and get started. Hello, everyone. My name is Adam Searing. I'm on the faculty here at the Georgetown University Center for children and families. I want to welcome everyone to our second child. Medicaid Policy Institute. Webinar.
Adam Searing: The Cmpi seeks to educate child health advocates, providers and other stakeholders and policymakers on the fundamentals of the Medicaid program and its importance for children, families, and other low income individuals
Adam Searing: with major Medicaid cuts and changes being discussed in Congress right now and early next year. This means we've decided to throw open our doors again to the public and have our 1st sessions for our new institute focused on Medicaid structure financing and potential changes. Today, we're focused on Medicaid cuts and effects with 3 of our expert staff. This is our last webinar of the year before the holiday break. Given the uncertainty
Adam Searing: an environment for Medicaid, we are still planning our webinar series
Adam Searing: for the start of next year. So stay tuned. We'll let you know what's happening. We are going to be recording
Adam Searing: and we will also post this on our on our website. We'll post the recording on our website any materials. I'll turn it over now to our executive director and our Mc. Joan Elker to kick us off. Joan.
Joan Alker: Thank you so much, Adam, and welcome everybody. I'm Joan Elker. I'm the executive Director of the Center for Children and Families, and a Research professor at the Mccourt School of public policy, and we are excited to bring you part 2 of our series of the Medicaid Policy Institute.
Joan Alker: which is open to all. And this week we're going to continue diving into policy proposals in Congress to cut or change Medicaid last week we focused really pretty exclusively on changes to the financing structure of Medicaid, and those proposals have appeared in many, many different Republican Budget Study Committee project 2025, etc.
Joan Alker: This week, we're going to be focusing on policy proposals that certainly have financial implications. But where we get into some of the questions about changing eligibility rules, benefit rules and other substantive areas of the program. So just so, everybody's clear.
Joan Alker: All of these proposals have appeared somewhere. We're not making them up.
Joan Alker: They have appeared either on the hill or in various documents that have been put out. These proposals, probably with one exception of work reporting requirements may not be as familiar to you as some of the other proposals we've talked about, because they haven't had quite as much ink. But these, again, are all things that are out in the public domain
Joan Alker: that we will be reviewing today. And the last thing I want to say before introducing our speakers is that we know from history that when a trifecta of either party takes control in Washington.
Joan Alker: it is the very 1st year of that new Presidential term when we tend to see a lot of legislative activity.
Joan Alker: and we're certainly expecting that to be the case in 2025. We're expecting very rapid movement on the hill, and there are many different ways that Medicaid could come up. In some respects Medicaid is really being viewed as a piggy bank
Joan Alker: to pay for some of the other priorities of the new Congress. The new Administration, like extending tax cuts that will disproportionately benefit the rich.
Joan Alker: So you know, Medicaid is an absolutely critical vital program, and that's why we
Joan Alker: spend so much of our lives trying to understand it and make it better. And and this is scary stuff, because people's health care and lives are at stake, so we don't want to alarm people. On the other hand, these proposals could move very quickly, and they could move in darkness.
Joan Alker: and that's not a good thing for our democracy. And it's not a good thing for for solid public policy outcomes that really protect families and people who rely on Medicaid for their vital health care services.
Joan Alker: So with that, I'm really excited to present a couple of my colleagues to you today who are going to walk us through some proposals, and then we'll take your questions at the end.
Joan Alker: 1st up, we're going to hear from Leo Cuel. I should say. Both of our speakers are lawyers by training, and they have a variety of experience working on the hill, working the National Health Law program in Leo's case, and Kelly's case on the hill, and they're going to walk us through some of these proposals, so we'll start with Leo, and then we'll go to Kelly Whitener. So, Leo, you're
Joan Alker: have the.
Leo Cuello: Thank you, Joan. Thanks so much for the kind intro. Please. Nobody hold it against me that I'm a lawyer. I, too, want to thank you for joining us today. As Joan said, this is the second of 2 webinars talking about the coming threats to Medicaid, and in our 1st webinar we covered the ways Medicaid could lose funding, and how severe those losses could be. And today we're going to talk about what harmful
Leo Cuello: Federal policies could come with those financing cuts, and how States might also respond by cutting their own Medicaid programs.
Leo Cuello: And I know. And I, too, want to acknowledge this is stressful. We're doing this because, as Joan said, there may be an effort underway to make historic cuts to Medicaid without public dialogue, and it's only about only by talking about the value of Medicaid and the impacts of bad policies that policymakers will get to the best answers.
Leo Cuello: So to start with, let's make sure we all remember how important Medicaid is, and all the roles it plays, and some of our key takeaways from the 1st webinar.
Leo Cuello: So, as you likely know, Medicaid and Chip
Leo Cuello: currently insure almost 80 million people, making it our largest public health insurance program. Well, larger even than Medicare. So Medicaid is the unsung hero, the unsung workhorse for health coverage in the United States, covering nearly one in 5 Americans, and if we look more closely, we see so many critical roles. Medicaid is playing for so many different populations from long-term services and supports to substance abuse, treatment, and mental health services
Leo Cuello: covering nearly half of all children and births, protecting people and health systems and the economy during the pandemic
Leo Cuello: to providing critical support for rural healthcare systems.
Leo Cuello: So if there is a massive funding cut to Medicaid. We have to ask, Well, what happens? Do we throw seniors out of nursing homes? Do we stop paying for births? Do we ignore the opioid epidemic. Do we let rural hospitals close?
Leo Cuello: So it's a real nightmare scenario if you imagine a huge cut. And these different policy priorities competing against each other. And so it's really important, I think, for all stakeholders to lift up that. There's 1 Medicaid financing system that many different populations rely on
Leo Cuello: and talk about the ways, educate the public about the ways that cutting the funding of the Medicaid system results in many harmful outcomes. Next slide, please.
Leo Cuello: Now, in addition to doing so much to support health coverage for different communities and populations across the country. Medicaid is also absolutely critical to State economies. Medicaid is by far the largest source of Federal funds for States, and it's not even close over 56% more than all the other stuff combined.
Leo Cuello: And so if you make a large cut to Medicaid by definition. You're making a Gargantuan cut to state budgets, and it's really important to keep this in mind as policymakers who may not really understand or value. Medicaid are rolling out all their different ideas about how to change Medicaid.
Leo Cuello: because whether they propose exactly this or exactly that, whatever combination of policies with whatever details. At the end of the day. This is the largest source of Federal funding for States, and if the policies lead to draconian cuts. It leads to huge problems for states
Leo Cuello: next slide, please.
Leo Cuello: As we discussed at last week's webinar, legislative proposals with massive cuts to Medicaid financing are under consideration as we speak. We've included links to some of last week's webinar, which featured Joan along with our colleagues, Edwin Park and Ann Dwyer, as well as a link to a blog from Edwin that encapsulates some of the policy concerns on the Webinar. We identified 4 major risks to the integrity of the Medicaid program.
Leo Cuello: but they all share a common design which is to make a large Medicaid cost shift to States. The Federal Government, shifting
Leo Cuello: and dumping costs onto the State, and or making it harder for States to actually finance their share of Medicaid costs. So again, whatever combination of these things are pursued, they are all leading Medicaid funding over the same sort of cliff.
Leo Cuello: But the major risks we covered were 1st block grants and per capita caps, putting a cap on medicaid funding for States, meaning the States would run out of Federal funding, even though they have increasing health care, costs.
Leo Cuello: elimination or reduction of medicaid expansion, matching rate, meaning States lose billions of dollars in funding for medicaid expansion populations.
Leo Cuello: 3, rd elimination or reduction of minimum medicaid matching rates, meaning a subset of States. See their general Federal medicaid funding, plummet.
Leo Cuello: or 4th elimination or restriction of State use of provider taxes, meaning States, lose their most important tool to raise the State funding needed to pay for their share of Medicaid and qualify for the Federal matching funds.
Leo Cuello: So all of these roads could lead to states losing hundreds of billions of dollars of funding next slide, please.
Leo Cuello: And what this means is that States could lose billions of Federal dollars, but still have all the same people. They need to take care of. So if the State is left holding the bag, sort of what can States do in that circumstance? Well, one option is to dramatically raise
Leo Cuello: taxes and make up for the funding loss. We'll see in a moment why, that may be mission impossible. Another option is to slash other parts of their budget, including their largest expenditure, education. But of course that is not good policy for children, nor the long-term strength of a State.
Leo Cuello: And note, if at the same time that there are huge cuts, they've also lost the ability to do provider taxes, which is their best tool. To raise money. Mission impossible gets even harder.
Leo Cuello: And the most likely option is that some States, or most states, or maybe all states, will respond by making huge cuts to their Medicaid programs. They might make deep damaging cuts throughout their Medicaid programs, affecting everyone with medicaid coverage and all the providers and plans that serve them.
Leo Cuello: and this would also have a big negative impact on their state economies. So that's what's at stake for states
Leo Cuello: next slide, please.
Leo Cuello: Now, I want all of you to
Leo Cuello: to sort of pause. If if you work with
Leo Cuello: or in states, take a breath and and really make sure you're keeping your eye on the ball here, it's really, really important to understand the scope of these potential cuts.
Leo Cuello: And on this slide is just an example based on 2017 legislation. The Better Care Reconciliation
Leo Cuello: Act Bill Bicra, which included per capita caps, block grants, and a reduction in medicaid expansion matching rate.
Leo Cuello: But this is just an example. You could get a similar gigantic cut with another combination of the financing changes that are under consideration. And we've discussed what's important here is the scope. According to Cbo analysis. If Bicra had passed in 2017, 10 years later, in 2026, Federal Medicaid spending would have been cut by 26%
Leo Cuello: and a decade. After that, 35%.
Leo Cuello: These numbers are catastrophically large for state programs. If you translate those numbers into a state budget, right? Trying to absorb that kind of reduction in medicaid funding. In your average state the whole is impossibly large. There's no way states which you know almost all. I think all have some kind of balanced budget requirement can raise taxes enough to backfill a gap that big.
Leo Cuello: And I know there are some of you who may be veterans of tough budget years in your State myself. I used to work in Pennsylvania, and every once in a while the budget was short, and there were tough conversations and sometimes painful belt tightening, and I know some of you have been through that process.
Leo Cuello: What we are talking about today is not that
Leo Cuello: there is no way to carefully precision. Cut yourself out of this kind of a budget hole. Right? This isn't belt tightening. It's getting Santa into pants with a 24 inch waist. Right? It's not possible.
Leo Cuello: And honestly, if you worked really hard to come up with a policy idea that saves 50 million to your state program, that's not even relevant to a conversation that's throwing around numbers like 800 billion
Leo Cuello: or 900 billion dollars. Right? There's no combination of sensible policies that you can identify with your State to address those kinds of cuts.
Leo Cuello: What we need instead is public discussion about the value of Medicaid, clear explanations, details, examples, stories.
Leo Cuello: About how this level of Federal losses in these policies would be a disaster for States and the Enrollees in Medicaid. Any way you you slice and dice, the policy
Leo Cuello: now.
Leo Cuello: the unfathomable numbers, the 25%, the 35%. They would decimate your state health care systems. And there's an important point in that which is that under such massive defunding of the system
Leo Cuello: everyone loses, enrollees, lose states, lose big all healthcare providers lose managed care, plans lose Pharma loses Dme. Providers lose, everyone loses, and that should mean hopefully at the State level. There would be many stakeholders interested in talking about and educating the public about the value of Medicaid and the impact of these policies.
Leo Cuello: Next slide, please.
Leo Cuello: But the risk here is not only the funding cut
Leo Cuello: on today's webinar, we're now going to turn to the harmful new policies that may be paired with or flow from Medicaid financing cuts, and there are sort of 2 ways we may see harmful policies, and so the webinar will sort of be divided into 2 parts. Part one is when those Medicaid financing cuts are passed by Congress, we may see in the same legislation or parallel legislation, new, harmful Medicaid policies, Federal legislation.
Leo Cuello: changing Medicaid laws leading to worse outcomes. Some of it may be out of a recognition by Congress that if they are going to massively cut Medicaid funding for States, they need to do to let the States do a lot less health care.
Leo Cuello: And I think it's really important at this point to be clear about something. You may hear policymakers talk about giving states, and sometimes they use the word flexibility. But these policies appear to be centered around making cuts, not flexibility. Just to pick an example. Consider the proposal to eliminate provider taxes
Leo Cuello: which is to eliminate a critical flexibility, states currently have, in fact, their most important flexibility for financing Medicaid. So the agenda does not appear to be about providing flexibility. The unifying theme is reducing Federal funding for States. And as we go through this, what you'll hear me say over and over again, and apologies. If I get repetitive.
Leo Cuello: is that these policies will allow States to reduce coverage to make up for Federal funding cuts.
Leo Cuello: That's the apparent design logic.
Leo Cuello: Now, the Federal funding possibilities that we're going to talk about, as Jane, as Joan said, are
Leo Cuello: not speculative. They're not new ideas. They're widely circulated in writing, including in project 2025, the 2025. House Republican study budget, the 2025, House Republican Budget resolution among others.
Leo Cuello: So part one is how Federal legislation from Congress could change Medicaid in part 2. Kelly will discuss other moves. States may make ways. States can cut their medicaid programs under existing program options in response to Federal
Leo Cuello: funds being reduced, because if Federal medicaid funding for States is slashed and the Federal lawmakers don't reduce the coverage requirements States, taking historic losses may try to do it themselves, and there are lots of ways they can do that. So Kelly will walk you through that next slide, please.
Leo Cuello: Okay, so let's start with the potential new, harmful Medicaid policies. We may see with the Federal legislation that makes Medicaid cuts. And I want to be clear upfront. It's holiday time. It's not Halloween. So I'm not trying to scare anyone. We're not saying any of these things are for sure going to happen, much less that all of these things are going to happen. These are the possibilities that are out there. I will be trying to use words like
Leo Cuello: could, might may. But if I accidentally say will at some point, please don't think I'm saying any of this will happen. I am not here to make predictions next slide, please.
Leo Cuello: So the word entitlement is used in a few ways related to Medicaid, but for individuals we say they are entitled to Medicaid because under Federal law. If they meet the eligibility requirements, States must make them eligible. This is a foundational aspect of Medicaid. If you are eligible, you must get coverage, and you must get it with reasonable promptness. States do not have any discretion to pick and choose among the eligible people.
Leo Cuello: States might like to be allowed to pick and choose their favorites, or use some discretion to control their budgets.
Leo Cuello: But they don't have that power.
Leo Cuello: and they mostly don't complain too much about that. Why? Because, as Medicaid is structured, it's a fair deal. Yes, they have to enroll everyone who is eligible, but at the same time they get open-ended matching funds. So they have to keep enrolling people. But the Federal Government has to keep sharing the cost, and that has worked well for everyone, including States since 1965.
Leo Cuello: But now imagine there's a block, Grant, suddenly. You're asking States to keep their end of the deal cover everyone, even as costs rise.
Leo Cuello: but the Federal dollars they're limited. And so when you get that kind of a Federal cut proposal, sometimes, you see, related policy ideas to give States discretion to control eligibility, and therefore costs. So what kind of ideas get floated?
Leo Cuello: Well, one is enrollment caps, giving States the authority to set limits on how many people can enroll.
Leo Cuello: So now the State can set a limit and maybe use waiting lists for their Medicaid program limit. How many eligible people can enroll, maybe even dial down eligibility to hit whatever budget goal they have.
Leo Cuello: There are some limited special optional programs today where states are allowed to set some enrollment limits. But this is not generally allowed in Medicaid.
Leo Cuello: You could say that allowing this would be
Leo Cuello: end of the entitlement, because there's no more guarantee that if you're eligible, you'll get enrolled.
Leo Cuello: Another variation is time or lifetime limits.
Leo Cuello: These would allow States to set a time limit on how long eligible people can enroll in Medicaid, for example, you get 3 years of eligibility, and it might be that you can have 3 consecutive years, and then you have to be out one year before you can re-enroll. It could be that you just get 3 years total in your whole life.
Leo Cuello: Again the entitlement would be severed, because eventually many eligible people would not be enrolled.
Leo Cuello: The last variation that I'll mention, which has come up a bit in 1115 waivers is what we call lockouts in a lockout, someone who does something the State doesn't like gets banned or locked out for a set amount of time. For example, anyone who fails to send in a renewal form gets terminated and can't re-enroll for a year lockout. This bucket of entitlement attacks is probably the one
Leo Cuello: that I think has the most damaging consequences for the spirit of Medicaid. It's my biggest nightmare for the program. Once we go down this path, Medicaid coverage goes from a guarantee to just sort of whatever the State feels like doing at any given moment.
Leo Cuello: Next slide, please.
Leo Cuello: A second risk, are some special barriers that keep rearing their head.
Leo Cuello: And certainly we're a big part of the 1st Trump Administration. We could see Federal legislation creating mandatory or optional work reporting requirements in Medicaid. We have done a lot of work compiling the evidence on why these are harmful. That evidence is growing as we speak
Leo Cuello: in the same time this past year that North Carolina insured over 500,000 people with a clean Medicaid expansion.
Leo Cuello: Georgia, with a work requirement, has insured less than 5,000, or maybe about 5,000 medicaid coverage with a work requirement is literally more than a hundred times less effective.
Leo Cuello: We could also see legislation to weaken affordability protections in Medicaid which set limits on who can have premiums and cost sharing, and how high those can be.
Leo Cuello: Premiums are just so specially terrible, because even seemingly small premiums will cause poor people to fail in some month this month, next month, the month after, and they create an administrative hurdle to make the monthly payments, and when people get tripped up. They end up uninsured. Both of these policies, as shown in Georgia. Now, Arkansas, earlier and ample evidence on premiums result in people getting
Leo Cuello: less people getting enrolled and states saving money, and so they may be attractive to congresspeople interested in making Federal Medicaid cuts
Leo Cuello: next slide please.
Leo Cuello: Another way to reduce State spending in Medicaid is to set up hurdles and make it harder for people to actually enroll and hard for them to renew coverage if they do run the gauntlet the 1st time, so another legislative approach could be to degrade eligibility and enrollment in Medicaid.
Leo Cuello: One harmful, harmful thing they could do is legislatively rescind recent enrollment regulations. So Congress would pass a law to undo the recent regulation done by Cms. And maybe the law says those regulations are not allowable in the future.
Leo Cuello: Rescinding these regulations would have numerous consequences for good policies that would otherwise be implemented in the coming year.
Leo Cuello: For example, rescinding would bring back numerous barriers to enrollment in chip, which are finally being solved in these coming years, including waiting periods before kids can get coverage, annual and lifetime limits in chip
Leo Cuello: lockouts. If parents fail to make a chip premium payment.
Leo Cuello: the enrollment regulation will also help improve file transfers between Medicaid and Chip to prevent children falling through the cracks and losing coverage so that, too, could disappear, finally repealing the Enrollment regulation would also eliminate improvements being made to Medicaid renewal processes, including how Medicaid deals with enrollee addresses.
Leo Cuello: and it would reverse the alignment of non-magi enrollment policies with Magi standards which, in short, means that people with disabilities and older adults would continue to have stricter and less favorable enrollment policies than other populations, something which the regulation was finally fixing.
Leo Cuello: Aside from the regulation, there are a number of other eligibility and enrollment policies that are unpopular among some policymakers, and which could be targeted to suppress enrollment, even though they're effective. They could reduce standards for auto renewals known as ex parte renewals. They could reduce the use of pre-populated forms, reduce flexibilities that make it
Leo Cuello: easier for States to verify information, reduce options to use E. 14 waivers, which are a way to simplify enrollment.
Leo Cuello: They also allow States to do.
Leo Cuello: or they could allow States to do more frequent income checks or rollback policies that allow things like continuous eligibility, and any combination of these things would really hurt enrollment. So they cut Medicaid financing, and they could make up for it by making it much harder for people to enroll. And just note again, these examples include taking flexibilities away from states that want to do a good job on enrollment
Leo Cuello: next slide.
Leo Cuello: So another obvious thing they could do along with big cuts is reduce, who is actually eligible. And they could do that in a lot of ways they could
Leo Cuello: reduce the populations that States are required to to enroll in Medicaid, which we call mandatory populations. They could do that by eliminating mandatory categories or by reducing the eligibility standard right, for example, reducing the income limits in a category so that less people can qualify.
Leo Cuello: They could also do something similar with optional populations, and again, they could take some option entirely off the menu, or they could reduce the eligibility standards, so less people can qualify if the State takes the option.
Leo Cuello: One obvious example and risk is that they could reduce Medicaid expansion. Eligibility levels from the current 138% of Federal poverty level down to 100% of Federal poverty, forcing affected enrollees out of Medicaid and into marketplaces.
Leo Cuello: Another thing they could do is raise or add asset tests, so less people qualify a particular risk is that they pursue an asset test for some of the Magi eligibility groups, particularly the Medicaid expansion. Again, that population and some other adults.
Leo Cuello: I also want to specifically identify that long-term services and supports Ltss eligibility could be a big target. In all of these ways there is a lot of optional eligibility in the long-term services and supports world which could be rolled back.
Leo Cuello: they could make it harder to qualify by raising the bar on the clinical criteria to qualify for some of the options. There are also a lot of special financial eligibility standards for long-term services and supports which could be made stricter.
Leo Cuello: So you put this together, and with Ltss you have a combination of populations that are expensive
Leo Cuello: populations that are often optional
Leo Cuello: and have a lot of eligibility criteria that can be monkeyed with right? So there's a big bull's eye on these services that people with disability and older adults depend upon.
Leo Cuello: Lastly, in the current environment, they could try and target immigrant access to health care that could include narrowing access to emergency medicaid or coverage of legal immigrants attempting to expand public charge findings. And maybe, you know, eliminating eligibility for legal immigrants outright.
Leo Cuello: These policies would have terrible human consequences
Leo Cuello: for immigrant families, for us citizens in immigrant, in mixed status families and many policymakers talking about Medicaid cuts don't really understand the importance of this Medicaid funding to States and the healthcare system that everyone in the State relies on
Leo Cuello: next slide. Please.
Leo Cuello: Okay, so thankfully, you have made it to my last topic of Federal legislative threats. When they cut Medicaid. If they cut Medicaid, they could also reduce services to make up for it so similar to eligibility. They could try and reduce some mandatory benefits, or they could target optional benefits.
Leo Cuello: As one example. One very harmful idea is that they could target the Epsd benefit for children, which is currently a mandatory benefit and really helps support children getting all of the screenings and treatments. They need to stay healthy.
Leo Cuello: As another example. Family planning benefits are also a mandatory benefit which could be a target for cuts, especially when you sort of layer the politics onto it. We could also see some more targeted restrictions on benefits.
Leo Cuello: You know, one major real risk is imposing or allowing closed drug formularies in Medicaid. In other words, allowing states to cover only a very limited list of drugs. So there's a list of covered drugs. It's very limited. And even if that means that many enrollees can't access drugs. They have been prescribed and need.
Leo Cuello: They could also target prohibitions and exclusions of certain services that are politically or otherwise unpopular for any reason such as gender affirming care.
Leo Cuello: So long. Story short, reducing services is yet another way. Federal policymakers could sort of make up for defunding the program.
Leo Cuello: So with this, we've wrapped up our summary on the legislative risks. The takeaway for you here is that we face not only
Leo Cuello: the the possibility of historic and potentially devastating cuts to the funding.
Leo Cuello: to the Federal funding for States, but that to make up for that
Leo Cuello: cut Congress pairs the cuts with really harmful changes to policy, that all have the basic same purpose to allow the State
Leo Cuello: to stop providing health care. They may call it flexibility, but it's not flexibility to innovate or improve. And in many cases it's explicitly taking flexibility away. What it is really is inviting, and it may be in some cases requiring States to provide less health care. And all of the evidence on these policies points to historic losses and regressions for State Medicaid programs, and the coverage that enrollees depend on.
Leo Cuello: So I'm going to pass the baton to Kelly now, who's going to walk us through? How States might change their Medicaid programs using existing medicaid options. If they get stuck with gigantic funding losses.
Kelly Whitener: Thank you, Leo. So, as Leo has said, there are many unknowns, but it's safe to assume that States are watching this process closely, because anytime the Federal Government makes changes to Medicaid rules. States have a lot of work to do, comply, of course, but also consider adopting optional policies. So in this section. I'll go over existing State options that may come up in response to Federal financing cuts next slide, please.
Kelly Whitener: So, assuming an overall reduction in Federal funding potentially of a large magnitude. States would have 5 basic areas within Medicaid to look for cuts and try to make the new math work. They're listed here on the slide, and we'll go over each in a little bit more detail. If these prove to be insufficient, States would have to look beyond Medicaid, either cutting, spending, and other parts of the budget
Kelly Whitener: raising revenue, or both, in order to balance their budgets, is a requirement in most states. As Leo mentioned next slide.
Kelly Whitener: So, looking 1st at eligibility under current law, States are required to cover certain groups of people and have the option to cover others typically federally mandated eligibility groups are based on a category, for example, being pregnant or a child plus an income range. For example, having family income below 133% of the Federal poverty level
Kelly Whitener: optional groups tend to be based on these same categories. But at higher income levels.
Kelly Whitener: So looking here on the mandatory side of the ledger. This is just an illustrative example. The rules are actually quite complicated, and I've included some links here at the bottom of the slide so you can check it out in more detail. But in general, children and youth in foster care are required to be covered, as are low income, pregnant women, children, and very low income parents and caretakers.
Kelly Whitener: plus seniors and people with disabilities receiving SSI and low income. Seniors are required to get some help paying for Medicare.
Kelly Whitener: Looking now at some of the kind of more details of this mandatory side under the pregnancy coverage, you see that it's required to provide 60 days postpartum to this group, and for babies born to mothers whose coverage is paid for by Medicaid babies, are considered deemed newborns and eligible for one year. That's another Federal requirement.
Kelly Whitener: Another detail here when it comes to low income children, though the Federal requirement is technically 133% of poverty in Medicaid. Under current maintenance of effort, provision states are required to maintain child eligibility in Medicaid and Chip below 300% of poverty through 2029,
Kelly Whitener: and then the final flag that I'll make on this side of the slide is, with respect to the low income parents and caretakers I've included here, the Us. Median of 38%. But these levels are actually linked back to much older standards and law and varied widely. There's a range of about 12 to 220% of poverty here for parents.
Kelly Whitener: So it's really important to take a look at what that actually looks like in your State in terms of that Federal requirement, and I'll note that in most expansion States most parents with medicaid coverage are technically optional, and in non-expansion States, parents above these thresholds are not eligible.
Kelly Whitener: So, barring changes to existing Federal rules, if States wanted to try to limit their financial risk by changing eligibility, they would be stuck looking at the optional side of the ledger here, and I'll say that these decisions would be very difficult for States to make.
Kelly Whitener: because they would come and run kind of counter to the direction that states have been going. So one example listed here is that the median pregnancy eligibility across the country is 200% of poverty that's above the Federal requirement. And recently States have been working to provide 12 months postpartum coverage rather than just the 60 day requirement. So this would cutting this back would be running counter to efforts that States have been making.
Kelly Whitener: Similarly, the Medicaid expansion is technically optional, and States have been continuing to adopt that. So going back on that would be quite difficult. But there are 9 States that have what are known as trigger provisions that would require the State to automatically drop expansion if the 90% match is reduced.
Kelly Whitener: Those 9 States are Arkansas, Arizona, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah, and Virginia, and there are 3 additional states that have a requirement and statute to reconsider expansion, and those are New Mexico, Iowa, and Idaho
Kelly Whitener: next slide.
Kelly Whitener: like the Medicaid eligibility rules. Federal law requires some required benefits, and other benefits are optional. Most mandatory services for adults with medicaid coverage are for acute care, and they're linked to a certain provider type as is listed here on the slide.
Kelly Whitener: The only mandatory long-term care in Medicaid is for nursing home services for children. Medicaid benefits under current law work very differently. States are required to cover Eps, Dt. Which includes a requirement to cover otherwise optional benefits. If the child needs them.
Kelly Whitener: So if States were to look to make benefit cuts, to try to limit their financial risk, they would be looking at the optional side of the ledger here, and you will note that there are some pretty important benefits on this optional list. So technically, prescription drugs are an optional benefit in Medicaid, but of course it's pretty hard to imagine health insurance coverage without it.
Kelly Whitener: What would your doctor do once they diagnose some kind of a problem, and also on the optional side, is home and community-based services, and I raise that because in the last several decades States have been working really hard to move away from nursing home care and to providing more services for long-term services and supports in the community.
Kelly Whitener: People like it better states like it better. It can be cheaper, but it's also technically optional. So that would be another area where States could try to reduce coverage if they had to, and facing a Federal funding shortfall. It would be a very difficult decision to make.
Kelly Whitener: in addition to outright eliminating some of the optional benefits that are listed here, and I should mention. These lists are not exhaustive. States could try to reduce the amount, duration and scope of a covered benefit. So, for example, they could continue to cover prescription drugs but limit the number of prescription drugs per month or per year. They could also, under current law, continue to cover home and community-based services, but limit the number of available slots.
Kelly Whitener: Next slide
Kelly Whitener: States also have some flexibility to raise premiums and cost sharing to Federal maximums, though historically, the administrative burden of collecting these fees diminishes the amount of revenue actually raised, and, in fact, research has shown that
Kelly Whitener: premiums and cost, sharing, actually reduce spending by depressing utilization even of necessary care, not by raising revenue, but these are the options that are currently available for States. They could increase premiums and cost sharing up to that 5% of family income maximum required by federal law.
Kelly Whitener: I'll note that that 5% of family income is very difficult to monitor. It's on an individual basis, of course. And if States use coinsurance where there's a payment of a percentage of the total cost that can be really difficult to track compared to copayments.
Kelly Whitener: and I'll also note that some populations and services are exempt from premiums and cost sharing under Federal law. And this includes people with incomes above or below 150% of poverty, I should have an asterisk here to say, but see, waivers, we can come back to that in the Q. And a if there's more questions about this and also preventive care, like, Well, baby and well, child visits
Kelly Whitener: next slide, please.
Kelly Whitener: So the final 2 areas that States could look under current law to try to make the new math work, so to speak, are reducing provider rates or reducing rates to manage care plans.
Kelly Whitener: States set fee for service provider payment rates subject to this Federal requirement that is listed on the slide and known as the equal access provision. This is another one that is actually very difficult to monitor. It kind of implies a comparison of Medicaid rates to rates paid by other payers, but it can be really difficult to do those comparisons, because, of course, Medicaid covers different people different services.
Kelly Whitener: But studies have tried and found that Medicaid fee for service payment rates for physician services are about 30% below Medicaid rates. That's a study from 2019. But there is a wide variation by state and by provider type. So, for example, primary care versus specialty services.
Kelly Whitener: Macpac has also tried to compare Medicaid payment rates for hospitals compared to Medicare and found they were about 22% below comparable medicare rates. So while there's a whole field of study around rates
Kelly Whitener: and comparability and reasonable people can disagree about what the right rate, is the evidence suggests that further cuts to Medicaid payment rates would be unsustainable, particularly for certain providers, such as providers in rural areas or providers of primary care services that are already operating on very thin margins today.
Kelly Whitener: Next slide.
Kelly Whitener: setting aside fee for service rates for a moment because more than two-thirds of all Medicaid beneficiaries nationally receive most or all of their care through managed care.
Kelly Whitener: In the case of managed care. States contract with a managed care organization, or an Mco. To provide comprehensive Medicaid services to its Enrollees, and although not all State Medicaid programs contract with Mcos, a large and growing majority do, and they are rapidly expanding into more complex beneficiaries, long-term services, and supports in other areas.
Kelly Whitener: So in terms of the state role here and where they have flexibility under current law States do set the capitation rate for managed care plans, subject again to this Federal requirement that is quite difficult to monitor, and you'll notice a theme there. It's known as actuarial soundness, and it requires that the rates be reasonable, appropriate, and attainable, to
Kelly Whitener: get those services that are provided under the contract. So in managed care states, if the State were to try to limit its financial risk by lowering the capitation rates, what that would trigger is a potential range of activities that the managed care plans themselves could take on, including lowering the amount that they in turn pay providers to deliver the care narrowing their networks or increasing utilization management techniques such as prior authorization.
Kelly Whitener: Though.
Kelly Whitener: generally speaking, we have, you know, some insight on the fee for service side into how much States are paying providers. It's much harder to know how much providers are receiving under a managed care arrangement, and much harder to track, how a reduction in a capitation rate
Kelly Whitener: could impact things like the provider payments, the networks, prior authorization, and the like. But it is clear that narrower networks and increased prior authorization would impede beneficiary access to care.
Kelly Whitener: and with that I will pause and turn back to Joan for our Q. And a.
Joan Alker: Okay, thank you so much. Leo and Kelly. A lot of information provided there. So we're gonna
Joan Alker: let that sink in. We've already got some good questions. I'm going to start with a question for Leo.
Joan Alker: which is some of these issues. Certainly work reporting requirements comes to mind from President elect Trump's 1st term. A lot of that ended up in court, and and a lot of them were stopped by litigation. And of course we repeatedly see litigation at the State level around provider rates and things like that. So
Joan Alker: how should we think about the role of litigation as we contemplate what Congress may do? Leo.
Leo Cuello: Yeah, so that's a great question. We've heard it a lot from a lot of people.
Leo Cuello: so you know, there was obviously a lot of litigation activity in the 1st Trump Administration. Right? We can think of examples like the litigation around Daca, litigation around work reporting requirements, the litigation around public charge. So a lot happened, and I'd say it's totally foreseeable that there will be new waves of litigation in a second trump administration
Leo Cuello: around similar such policies. But but
Leo Cuello: make sure you are not mixing up your apples and oranges here.
Leo Cuello: What do I mean by that? All of those examples I just listed were lawsuits against
Leo Cuello: administrative actions that the executive branch took right. They were lawsuits saying, the Executive is breaking the law.
Leo Cuello: There are a lot of arguments you can make when you're bringing that kind of lawsuit challenging what an agency is doing
Leo Cuello: right. None of that is relevant to legislation.
Leo Cuello: What we are talking about today is the legislature changing the law. For example, if they change Medicaid law to allow work reporting requirements.
Leo Cuello: none of the work reporting requirement, litigation from 2017 to 2020 would be relevant. That litigation was all about them, not complying with the law.
Leo Cuello: Now, if the administration breaks the rules or cuts corners that could certainly lead to some litigation. Right? So maybe on day one they issue an executive order that's really sweeping, and tries to do more than you can do through an executive order, and that gets challenged. That type of thing could totally happen.
Leo Cuello: But that will be at, you know, the policy margins
Leo Cuello: when they do more extreme things, their core agenda will not be wrapped up
Leo Cuello: or dependent upon. Let's say in my example, that executive order. So the takeaway is, please hear this. If Congress passes a block, grant
Leo Cuello: or eliminates provider taxes or passes a work reporting requirement, you absolutely, positively should not assume litigation is coming to fix the bad policy. You don't win
Leo Cuello: when they have just made the law say what they want the law to say.
Leo Cuello: So I just I think people should really scale back their hopes for what litigation can do to save
Leo Cuello: actions by the legislature, because unless you have a strong argument as to why, it's unconstitutional, or really violates some other important law. It's going to be very challenging to to do anything in litigation
Leo Cuello: with respect to things that are passed by Congress.
Joan Alker: Right? So thanks, Leo. And just since so many folks have worked a lot on work reporting requirements. The fundamental message here is, if they change the law.
Joan Alker: and that's a state option or a State mandate. The all of the
Joan Alker: drama that we live through with section of 15 waivers is not relevant. The point of waivers is to waive provisions of Federal law. But if those provisions don't exist anymore, then you can't. You don't worry about waiving them.
Joan Alker: You don't need to waive them.
Joan Alker: so I'm going to combine 2 questions here, and Kelly or Leo can dive in. We have 2 questions related to could Hcbs face cuts due to not being mandatory, and also a question about dual eligibles, Medicaid and Medicare. In this case referencing adult children who are disabled, waving off of their retired parents.
Joan Alker: Who are dual eligible. So
Joan Alker: Kelly, maybe you want to pick up on that. You address a little bit of that in your slides.
Kelly Whitener: Sure, on Hcbs states under current law could scale back that coverage. It's optional services. I think the hard part would be that for most States. They're not going to want to. It really runs counter to the direction they've been running in. But if they're faced with, like the slide that Leo showed cuts from the Federal government of 30%, 40%, 50%
Kelly Whitener: they may have to. It would be pretty unpopular and could in some ways increase costs, because unless the requirement were to change around nursing home care, some of the people that are being served in the community today may have to get their services through a nursing home instead.
Kelly Whitener: which could increase costs for States. But I do think it's an area that would be at risk under this kind of scenario, and just, very, very difficult for States to try to make that decision.
Joan Alker: Anything else you want to add on the duals, either of you.
Kelly Whitener: On duals, I think similar, except that the some of the requirements and the way that Medicaid supports dual eligibles are in statute, so that would be kind of back to more of the part. One of Leo's conversation of really changing those rules. So it would. It would depend a little bit more on what the rules might, how the rules might change in the new Congress. There's a little less optional in that space.
Leo Cuello: Yeah. And for Hcbs, I would just, you know, again lift up the fact that
Leo Cuello: as people try and come up with ways to find savings in the program. They're going to look where there are dollars, because if they make 3 changes in some other place, they don't get the amount of dollars that they can make by make doing one negative change in Hcbs, right? And so that's really concerning because it just
Leo Cuello: it, it invites people to come in and try and find the savings there.
Joan Alker: Right? Okay, thank you. And we have one of our our commentators here, pointing out that there are already long waiting lists. for Hcps services
Joan Alker: noting in Texas. There's 185,000 people. So a longer waiting list would be extremely problematic.
Joan Alker: We've had a couple of questions about work reporting requirements. Tony Gar just asked, is what Leo saying is, what happened to Afdc in 1995, and that's where we would end up.
Joan Alker: And there was an earlier question about what can we provide on the question of how they're not cost effective? I'm going to hunt this to Leo in a second, but we will, one of my colleagues in pop in the chat. I did a blog at the end of October, about Georgia.
Joan Alker: which, as Leo mentioned, is the only State right now where we have a real live Medicaid work reporting requirement which has prevented the vast majority of potentially eligible people from accessing health insurance, but even sort of I had. I keep saying I had low expectations for Georgia, but they haven't been met, because.
Joan Alker: in addition to not covering anybody, it's become a huge boondoggle for corporate consultants in particular, Deloitte and the vast majority of the funds have not gone to covering people. They have gone to contracts for Deloitte to
Joan Alker: fix up the website, you know, create a complicated eligibility system, do outreach because hardly anybody's enrolled. And of course they've paid lawyers because they've litigated this thing up and down.
Joan Alker: So millions and millions of taxpayer dollars have gone to. In this case, international corporation, and very few people have gotten healthcare, so we'll put that blog in the chat so you can read about the latest from Georgia. But, Leo, if you want to just say anything else. But also just, you know, is this like what happened with Afdc respond to that.
Leo Cuello: Yeah, so it has a lot of similarities. I think it would be helpful to people just here. The lawsuits that happened successfully in 2017 to 2020. What did those lawsuits say? They said ultimately that the agency was unreasonable because it didn't consider the impact on coverage when it was approving these work requirements, and the evidence was all showing that they would be bad for coverage
Leo Cuello: right? And so a huge part of the litigation was, what is the purpose of the Medicaid program? Do these work requirements promote the objectives of the Medicaid program and the litigators were able to point to a statute, the Medicaid statute that talks about furnishing health, coverage, rehabilitation, and other services, and does not mention work requirements. So you could
Leo Cuello: go into court and say
Leo Cuello: they are. These work requirements do not promote the objectives of the program because this program
Leo Cuello: Congress has described this program and that description is totally about health care. You contrast that
Leo Cuello: with the language that was put into the code around
Leo Cuello: Snap and around Tanf. You know, Tamnif, for example, has in that same place where Medicaid says the purpose is health coverage.
Leo Cuello: Tanf has this just, horrible language and the dependence of needy parents on government benefits by promoting job preparation, work and marriage. Right? So if somebody brings a lawsuit in the Tanf space, they're just instantly going to lose because people are going to say these work requirements are exactly consistent with what the statute is saying.
Leo Cuello: Medicaid did not have that problem. And and that's why the cases ended up the way they did. And obviously you change that statute now.
Leo Cuello: States are going to have a green light to do work. Requirements and and litigation would not be totally irrelevant. It could be relevant. And you know, just for example, it could be relevant if
Leo Cuello: the way a particular state implemented its work requirement ended up being really discriminatory.
Leo Cuello: That could be the basis of a lawsuit, but it wouldn't be a writ. Large work. Requirements are no longer allowed type of lawsuit.
Joan Alker: Okay, we're going to take another question about school-based services. And then we have a bunch of questions about the politics of this. And I'm going to wrap those all in for some concluding thoughts. The question we have about school-based services, what risks do school-based services face Cms just released? Comprehensive updated guidance in most states, it's a Cpe program.
Joan Alker: etc. So 1st to say that we at Ccf are doing a bunch of quick issue briefs about the role that Medicaid plays in supporting many aspects of our society, and there are many, many intersections between Medicaid and schools and education.
Joan Alker: So we do have a brief coming very soon on how Medicaid supports school success. But, Kelly, I'm going to kick this one to you. What risk do school-based services face.
Kelly Whitener: I think there are kind of 2 big risks for school-based services, one category being that a lot of the school-based services that States have been looking to expand, and that that guidance from Cms helps expand are optional. So states don't have to provide those services and facing major budget cuts. I think they would choose not to
Kelly Whitener: the second kind of category of risk. Here the questioner pointed out, cpes igts, right? We have our acronym soup here of
Kelly Whitener: basically how States generate the State share to be able to provide school-based services and get those Federal matching funds, and some of those pathways could be cut off by Federal legislation that has proposed different ways to limit States ability to raise the State share that we covered a little bit at the beginning of
Kelly Whitener: today's webinar, but more in detail. Last week's webinar.
Joan Alker: Great thanks, Kelly. So we have a number of questions that relate to. Can they really do this? This would be a really bad look how do we? You know? How can groups fight back a whole bunch of questions
Joan Alker: and a couple of things just to kick off on this point if
Joan Alker: nothing else, was taken away from 2017, and the efforts for many, many months that went on to repeal the Affordable Care Act, and as many people often forget, tried to block rent and cap Medicaid while they were in the neighborhood, even though that's not technically repealing the Aca
Joan Alker: This is not popular. Medicaid is popular with voters of all parties in every poll I've ever seen.
Joan Alker: However.
Joan Alker: the reason we find ourselves here is because during the campaign. President elect Trump said he would not cut Medicare. He would not cut social security, and he would not cut defense.
Joan Alker: So if you just do the math that leaves Medicaid at the top of the list for cuts.
Joan Alker: and those cuts could fund
Joan Alker: tax cuts. They could fund deficit reduction. They could fund immigration initiatives. That's where we are. Why, Medicaid as the Piggy bank for other initiatives is a very real issue, and I think the takeaway I would assume for those who worked on 2017 repeal is, do this quickly.
Joan Alker: because the longer it strung out that was problematic, do it quickly, and do it as quietly as possible. We didn't hear a word about Medicaid during the campaign. Nothing.
Joan Alker: So yes, absolutely. This is not popular, and this is part of why it's so important to educate folks about the role that Medicaid is playing across. Many sectors, and many of you have asked questions about. You know, how would this affect Hcbs services or school-based services? Right? These are all good questions. I think part of the intent of these webinars. These 1st 2 webinars that we have
Joan Alker: laid out is that we're talking right now. Congress is going to make the big decisions
Joan Alker: very quickly. In 2025. Those are big decisions about how they allocate the budget, and how they allocate cuts, and how they fund other priorities like tax cuts, etc. And so that's the conversation we're in right now.
Joan Alker: And that's what the public needs to be aware of and needs to weigh in on these big picture decisions about big cuts.
Joan Alker: So absolutely, this is not a foregone conclusion. The house, of course, is extremely tight, and this is hard.
Joan Alker: but it will be made easier by happening quickly, for the proponents who want to do this and out of the public eye. And that's why it's so important to have these conversations in your community and nationwide. So with that, let me see if Leo and Kelly want to emphasize any final points, and we really appreciate
Joan Alker: everybody's engagement, and we're going to keep going. We'll be doing more webinars in January. So stay tuned. But, Leo Kelly, let me see if you have any final words.
Leo Cuello: Yeah, I just have a final thought, which is, you know, how much policy really matters, and not having vague ideas be be what we're all sort of
Leo Cuello: walking away from from the conversation with. And that gets to Joan's point that you know, a lot of what's happening is happening in darkness, and we need to shine a light on it and understand what is the policy and what is the impact of those policies? And if you just think back to 2016. What you, the the 1st salvo in 2016 was, we're going to repeal the Affordable Care Act, and we'll come up with a replacement later.
Leo Cuello: and there was a response from the policy community saying, no, we need to see what that replacement is, because, without seeing what it is, we don't know if it's a good idea.
Leo Cuello: And sure enough, when the ideas started to come out, it was clear that they were going to be very, very harmful, and nowhere near similar to the things that the Affordable Care Act had done right. And so then there had to be a replacement plan with it. And then, even in that context, it took a lot of people talking about the value of Medicaid and the impacts
Leo Cuello: on the program to survive with the barest of margins vote with the famous, you know, John Mccain thumbs down situation, and I just think there are a lot of us who remember 2017 to 2020, where Medicaid policy was able to be protected.
Leo Cuello: And I think people forget just how many risks there were in that 2016 run up to 2017
Leo Cuello: and those votes which could have made totally dramatic changes to the program. And and so you have to sort of channel yourself back past where we are now, to those moments. That's where we are now.
Joan Alker: Ellie, do you have any final words? And I'm going to hand it back to Adam to do a quick wrap up.
Kelly Whitener: No final words from me. Thank you to everyone for joining today. Take it away, Adam.
Adam Searing: Just thank you to everybody for coming out. We've had just phenomenal response to these webinars and thank you to my colleagues for doing such an amazing job. We're always all available to answer questions. Offline as well, and we will see you all soon. In the New Year. Happy holidays. Everyone.