Possible New Federal Medicaid Policies Put Pressure On States

Patrick Connole

With Congress weighing whether to alter how shared federal and state payments work in the Medicaid program under a Republican federal per-capita cap, the possibility of such a shift could leave long term and post-acute care (LT/PAC) providers much more focused on state policymaking moving forward.

That is the thinking of Robin Arnold-Williams, a partner and head of the Medicaid practice for Leavitt Partners in Salt Lake City, Utah, who tells Provider that if a per-capita cap comes to be then states will be faced with enormously tough decisions on “who they are going to cover and for how long.”

Of the many factors playing into how states decide, under a possible cap system, to allocate money to the various populations able to receive Medicaid funding (low-income elderly, disabled, pregnant women, etc.) is the Affordable Care Act’s (ACA) eligibility expansion. What the House Republican bill, the American Health Care Act, currently proposes is that enhanced federal funds, or matches under the ACA, will continue to be paid for enrollees on the books by Dec. 31, 2019.

So, states like Kansas, which is slowly moving forward in its legislature to possibly expand eligibility under the ACA for its Medicaid program, may want to act sooner rather than later in order “to get critical mass” and take advantage of the enhanced match of 90 percent, Arnold-Williams says.

How these state decisions on ACA eligibility directly affect LT/PAC funding is that if a state does or does not take on the more generous federal match and more enrollees, then they may or may not have more money for other buckets, or populations, in need of the capped federal funds.

All of this is very complex to understand, she explains, and will leave state Medicaid offices working overtime if the House Republican bill survives its trek through Congress.

“I imagine there are a lot of Medicaid directors looking at their data and trying to calculate that. That will take some sorting through,” Arnold-Williams says. “There are different per-capita rates for each group: children, adults, seniors and the disabled and the blind. It is one thing to say the money is going to flow to the state in those set per-capita rates by group, but it is quite another thing at the state level to say how that revenue will be allocated.”

An example of the tough math ahead is if you have different inflation costs for seniors and people with disabilities versus children, leaving states to allocate Medicaid budgets for these different groups and services within Medicaid without open-ended entitlement.

Some states, she says, will be more generous and may even weigh keeping their program open-ended with possible tax increases, decrease in health benefits, or other moves to pay for it, but more likely it sets up an intense period of competition between various Medicaid groups when the Republican proposal would go into effect in 2020.

“And one decision point in 2020 will be a state making a conscious decision to roll back ACA expansion in order to manage money better. It is hard to manage expansion and not have new people come on at lower match rate,” Arnold-Williams says.



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Filed under health care, Long term care, New Provider

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