Despite Obamacare Repeal Failures, SNFs Shouldn’t Think Medicaid Is Safe

October 17, 2017, Alex Spanko, Skilled Nursing News - Congressional Republicans may have failed at several attempts to repeal the Affordable Care Act and enact deep cuts to the Medicaid program, but at least one expert says long-term care providers shouldn’t breathe a sigh of relief just yet.

“I don’t think the states feel like Medicaid is safe right now, and I don’t think any of us should feel like Medicaid is safe,” Barbara Coulter Edwards told an audience at the American Health Care Association’s (AHCA) annual convention and expo in Las Vegas on Monday.

Edwards, a principal at the Lansing, Michigan-based consulting firm Health Management Associates, said several structural realities make it likely that Congress could make another run at Medicaid in the near future.

Medicaid as political football

Repealing Obamacare and its network of health insurance exchanges is theoretically separate from Medicaid policy, but the two became strange bedfellows due to the harsh realities of the federal budget, Edwards said: Politically unwilling to cut health-insurance subsidies for lower-income people, but also dead set on repealing the taxes that make the ACA and those subsidies work, Congressional Republicans began to see Medicaid as the fiscal answer.

“Medicaid, frankly, was the easiest to take on, they thought, because it’s the smallest of the three,” Edwards said.  “These aren’t people people care about — it’s Medicaid.”

But as many players pointed out during the recent Medicaid fight, the program doesn’t just exist to provide coverage for low-income Americans.  It’s the single-largest payor for long-term care services in the United States, and though older beneficiaries and Americans with disabilities account for about 24% of program enrollment, those two groups represent about 60% of total Medicaid spending, Edwards noted.

The resulting outcry from industry groups and rank-and-file recipients saved Medicaid from cuts this time, but Edwards warned that an upcoming push for tax reform could revive the idea of Medicaid as a piggy bank for other government initiatives.

“I think you’re going to see initiatives of rolling back the provider taxes, proposals to move Medicaid to a per-capita cap,” Edwards said.  “I don’t think those ideas are gone.  We’re now talking about tax reform.  A good amount of people in Congress are seeing Medicaid as a source of funding for tax reform.”

State-level Medicaid reform

Edwards also emphasized the importance of state-level experimentation to the overall Medicaid program, pointing out that several key tenets of the current landscape — including managed care, long-term services and supports, and Medicaid expansion efforts — began on the state level before rolling out nationwide.  She encouraged providers to explore 1115(a) waivers, experimental Medicaid initiatives in which the Department of Health and Human Services allows states to break certain federal rules in order to potentially improve care and efficiency.

For instance, the waivers allow the HHS secretary to waive eligibility, benefit design, provider reimbursement, and other key standards, as long as the state can demonstrate that the program advances the aims of Medicaid.  Centers for Medicare & Medicaid Services (CMS) administrator Seema Verma has expressed interest in easing the water process, Edwards noted, though she also cautioned that the process is subject to intense scrutiny.

“Everybody’s brother gets to review this at the federal level,” she said.  “The fiscal people comb through these waivers.”

Like many speakers at the event in Las Vegas, Edwards said that Medicaid reform is crucial as baby boomers age, but so far no substantive solutions have been developed on the federal level.  As a result, it may be up to these state-level reforms to generate the next wave of Medicaid reform.

“Congress’s approach right now is to tap out and say to the states: ‘Your problem, not mine,’” Edwards said.