Massachusetts seeks to move adults off Medicaid, limit drug coverage

Facing steadily rising costs, Massachusetts has asked for federal permission to cull its Medicaid rolls, curb access to in-home and long-term care supports and limit the number of drugs it must cover.

Massachusetts has seen its Medicaid and CHIP population jump more than 30% since it expanded Medicaid under the Affordable Care Act. All in all, Medicaid covers 1.9 million Massachusetts residents, or one-third of the state's population.

But as the federal government no longer covers the total cost of expansion, Massachusetts said it needs to slim down the program because the costs are unsustainable.

"At 40% of the commonwealth's budget, MassHealth's continued growth will constrain the state budget unless significant reforms are implemented and key aspects of the program are restructured," Marylou Sudders, the state's health and human services secretary, said in a Sept. 20 letter to CMS Administrator Seema Verma.

The CMS will accept comments on the state's waiver request through Oct. 20.

Massachusetts's share of Medicaid spending jumped 20% from $6.4 billion in fiscal 2013 to $7.7 billion in fiscal 2016, according to federal data.

The state has asked for permission to move childless, non-disabled adults with incomes above the federal poverty level into subsidized commercial plans through the state's exchange. Arkansas uses a similar model to cover this population.

Under the proposal, non-disabled beneficiaries at or below the poverty level would be moved to a version of Massachusetts's Medicaid program that does not cover long-term support and services, such as personal care attendants.

The state also seeks to create a formulary that would limit which drugs the state would have to cover for Medicaid beneficiaries, making the state's program more similar to a commercial insurance plan.

Currently, Massachusetts must cover Food and Drug Administration-approved drugs from any company willing to offer a rebate.

Since 2010, Medicaid drug spending in the state has risen 13% annually.

"If growth in drug costs continues at the current trajectory it may crowd out important spending on healthcare and other critical programs," the waiver application said.

Massachusetts isn't the only state to consider changing its expanded Medicaid program as federal funding dwindles. Earlier this year, Oregon announced it was considering kicking expansion enrollees off of Medicaid as a way to generate the savings needed to close a state budget hole. Unlike Massachusetts, Oregon did not plan to offer other coverage and ultimately shelved the proposal.

Doctors in Massachusetts have voiced concerns over how the proposed changes may affect Medicaid patients.

"We believe that shifts of a large patient populations will ultimately burden patients with reduced benefits and increased cost-sharing," the Massachusetts Medical Society said in a comment letter.

Affected expansion beneficiaries could see their copays rise as well. According to the Massachusetts Hospital Association, Medicaid beneficiaries pay a $3 copay for hospital says, while private insurance plans may charge a copay of up to $50.

"It is important that adequate protections be established to ensure affordable coverage is maintained," Timothy Gens, general counsel for the Massachusetts Hospital Association, said in a comment letter.