Moving The Button To The States

April 11, 2017

With the AHCA in flux, and perhaps subservient to other policy imperatives, discussions related to Medicaid reform writ large are gravitating towards the States. This move would most certainly be facilitated by the new leadership at CMS & HHS as signaled by their recent letter to the State Governors which indicated a commitment to "usher in a new era for the Federal and State Medicaid partnerships where State have more freedom to design programs that meet the spectrum of diverse needs of their Medicaid population."

Areas addressed in the letter include improving Federal and State program management (i.e. fast tracking approvals of waivers and demonstrations); supporting innovative approached to increase employment and community engagement (i.e. require beneficiaries to meet job search or work requirements); aligning Medicaid and private insurance policies for non-disabled adults (i.e. use of HSA-like features, an increase in beneficiary cost-sharing), etc.

Many of the aforementioned features have already made their way to 1115 waivers used by States for alternative expansion model (e.g. IN, MI, IA, AR), and many States have similar waivers in the pipeline (e.g. KY) or are considering submitting such waivers. In addition, States are likely to leverage 1332 waivers to address variety of current health insurance marketplace issues. These initiatives could also provide an opportunity for Medicaid alignment.

The Medicaid program has always been emblematic of the "federalism" debate as related to the role of the States in the delivery of healthcare. To quote the words of a health law scholar, "regions, States, even localities, differ in their demographic characteristics, political cultures, existing styles of medical practice, and appetites for medical services. What is both practical and desirable varies enough to make federalist variation both normatively attractive and politically wise as an alternative to national stalemate."