With congressional action to repeal the Affordable Care Act off the table in 2018, the Trump administration and the states engaged in a tense tug of war through the year between expanding, not expanding and limiting Medicaid eligibility.
The administration in 2018 also proposed penalizing legal immigrants for enrolling in Medicaid and offering states greater flexibility in how they regulate Medicaid managed-care plans.
Congressional Republicans' frantic but failed 2017 drive to radically restructure Medicaid and cut spending sputtered out in 2018. In November, GOP hopes of reviving that effort were dashed by the Democratic wave in the mid-term elections. The new Democratic-controlled House means GOP block-grant proposals are dead for at least the next two years.
So the main action shifted to the executive branch, the states and the federal courts.
The CMS set up the Medicaid expansion battle in January by inviting states that have extended benefits to low-income adults under the ACA to propose work requirements, premium payments and other conditions on eligibility. States that took up the invitation acknowledged the new waiver conditions would significantly reduce enrollment. The federal government has never previously allowed work requirements for Medicaid.
Expansion advocates fired back in June by pushing a Medicaid expansion bill through Virginia's previously resistant Republican-controlled Legislature. Then in November, they won voter approval of ballot initiatives to expand Medicaid in deep-red Idaho, Nebraska and Utah, where GOP governors and lawmakers repeatedly had said no. More than 600,000 people in those four states could gain coverage as a result of these measures, on top of the more than 12 million Americans estimated to already have expansion coverage in other states.
In addition, Democratic gubernatorial candidates who campaigned on expanding coverage to adults with incomes up to 138% of the federal poverty level won in Kansas, Maine and Wisconsin, which makes expansion more likely in those states.
If all those states actually implement Medicaid expansion, that would bring the total number of states that have done so to 39.
“We're clearly going to see Maine, Idaho, Utah, Nebraska and probably Kansas expanding in 2019, and I suspect you'll see it in other states, too,” said Matt Salo, executive director of the National Association of Medicaid Directors. “We're getting closer and closer to the point where elected officials look at the ACA and say, 'This is the law of the land, it's here to stay, let's take advantage of it.' ”
Some of the new expansion states may join more than a dozen others in seeking federal permission to impose work and other personal-responsibility requirements on non-disabled adults to qualify for Medicaid. Five states—Arkansas, Indiana, Kentucky, New Hampshire and Wisconsin—gained approval for such demonstration waivers in 2018. These provisions are seen as political softeners to gain approval from GOP elected officials.
Yet the future of the Affordable Care Act, Medicaid expansion and Medicaid work mandates remained up in the air at year's end. That's because a federal judge in Texas in mid-December ruled in favor of 20 Republican attorneys general seeking to invalidate the entire ACA, including its Medicaid expansion.
If that ruling is upheld on appeal, which is highly uncertain, “everything is gone, including the authority to spend money on Medicaid expansion,” said Sara Rosenbaum, a health law professor at George Washington University.
Medicaid work requirements also face legal challenges from patient advocacy groups that sued over CMS' approval of those waivers. A federal judge in Washington, D.C., blocked Kentucky's demonstration waiver in June. He's hearing a similar lawsuit against Arkansas's work mandate, which already has resulted in nearly 17,000 people losing coverage since it started in May.
U.S. District Judge James Boasberg ruled the CMS did not adequately consider the impact of the Kentucky waiver on providing coverage, which is the stated objective of the Medicaid statute. The CMS then held a new public comment period and re-approved the waiver, which likely will face a fresh legal challenge. Legal experts expect the U.S. Supreme Court to ultimately decide the issue.
Even conservative health policy experts who favor Medicaid work requirements fear the CMS and the states are rushing ahead with this policy without adequate preparation, potentially causing large coverage losses.
“The CMS is supposed to worry about implementation just as much as policy, and I don't think they did that in this case,” said Joseph Antos, a healthcare scholar at the American Enterprise Institute.
Patient advocates are also nervous about the Trump administration's so-called public charge rule, proposed in October, that would allow federal immigration officials to consider legal immigrants' use of Medicaid and other public benefit programs as a strongly negative factor in their applications for permanent residency. The Department of Homeland Security requested public comment on whether the Children's Health Insurance Program also should be included.
The Kaiser Family Foundation estimated that 2.1 million to 4.9 million Medicaid and CHIP beneficiaries would disenroll due to fear of family members losing their legal status in the U.S.
“We have a lot of people very, very concerned about that,” Salo said. “State Medicaid directors are definitely going to have to deal with this. But it's something that's very politically challenging for us to weigh in on.”
In the meantime, providers and patients celebrated the steady expansion of Medicaid coverage around the country, which experts say will increase healthcare access for poor and working-class adults and improve provider finances by reducing uncompensated care. It is particularly helpful in rural areas, where hospitals are struggling for survival.
“This was a victory for hundreds of thousands of Virginians who've been unable to have coverage,” said Julian Walker, vice president of communications for the Virginia Hospital and Healthcare Association, whose state had suffered a political standoff for years over expansion. “And it will relieve some of the financial pressure hospitals face.”
Other important Medicaid policy developments in 2018 were more mundane. The CMS issued a proposed rule in November giving states greater flexibility in regulating Medicaid managed-care plans, which now cover nearly 70% of all Medicaid beneficiaries.
The proposal, still in the public comment stage, would grant states more leeway to set provider network adequacy standards and criteria for the actuarial soundness of rates paid to plans. State Medicaid officials had complained that the current Obama-era rules were overly burdensome.
But patient advocates worry the proposed rule could hurt access to care by letting states move away from examining the travel time and distance it takes patients to reach various types of providers in a plan's network. Instead, the CMS wants to let states use other quantitative standards that may consider alternative delivery models such as telehealth.
“I don't see how states could allow a large contract to go forward without very clear standards about access to care,” George Washington University's Rosenbaum said. “Otherwise you are paying a plan potentially for nothing.”