Message to Policymakers: Go Slow on Medicaid

NAHAM News will be watching, listening to, and reporting on the policy discussions on what states will do with Medicaid.  Given the Supreme Court's decision on the Affordable Care Act, what states do will have a lot to do with the law's success in achieiving coverage for all (or most) Americans, within the price initially tagged to the law when passed, and what states do will significantly shape the future health care landscape.

Brett Norman of POLITICO reports that 3 former administrators of the Centers for Medicare & Medicaid Services (who served Republican presidents) have a bit of advice for Democrats trying to get conservative governors to go ahead with Medicaid expansion: Go Slow. Be flexible. Don’t make it a political litmus test. And try not to pour fuel on what’s already a hot-burning fire.

Find his article “Experts on Medicaid: Go Slow” by Brett Norman (July 10, 2012 10:48 PM EDT) here: http://www.politico.com/news/stories/0712/78365.html

The Medicaid ruling by the Supreme Court left the states with unexpected options and dozens of questions — and the 3 former CMS chiefs doubt they will be answered quickly, maybe not until after the elections.

Some big name, big state Republican governors are in open revolt against the 2014 Medicaid expansion, and others are still trying to figure out the costs and benefits, both political and economic.

The 3 former administrators counsel CMS to take it slow, avoid antagonizing states by issuing ultimatums and get ready for a whole new dynamic in the state-federal Medicaid negotiations — one in which the states have a lot more leverage than in the past.

Mark McClellan, who served at CMS under President George W. Bush and is now director of the Engelberg Center for Health Care Reform at the Brookings Institution says the new state position will “mean something, but we don’t know exactly what.”

With expansion now a political flash point, CMS flexibility could be the new name of the game. So, Tom Scully, who also served at CMS under President George W. Bush and is now a health care lobbyist, says don’t “make rejection of the Medicaid expansion a litmus test for Republicans,” and don’t tell states “they can either take or leave the Medicaid expansion — and the billions in federal funding.”

In fact, something more like appeasement might be the best approach at this point – that consistent with what Gail Wilensky, head of Medicare and Medicaid under President George H.W. Bush told POLITICO.

The federal health law would have required all states in 2014 to extend Medicaid coverage to everyone up to 133 percent of the federal poverty level, with the feds picking up 100 percent of the tab in the first three years and stepping down to 90 percent thereafter. It would have accounted for about half the new insurance coverage under the Affordable Care Act — some 17 million people.

Just about every state assumed that the court would either invalidate the expansion or permit it — and that states would have to go ahead or risk losing all their Medicaid funding.

So, POLITICO reports –

CMS’s options moving forward lie somewhere between two extremes. CMS could gamble on the all-or-nothing approach, hoping that reluctant states would play ball or face the wrath of provider group lobbies, especially the hospitals, which don’t want to see that federal funding left on the table.

On the other hand, CMS could consider an option — already suggested by Louisiana Gov. Bobby Jindal — to give states at least some of the expansion funds in the form of block grants, the holy grail of conservative health reformers.

But POLITICO reports that the administration had so far said that block grants are not on the table – at least not yet.

Go here to see what OMB head Jack Lew says: http://www.politico.com/news/stories/0712/78056.html