MEDICAID PLANS DRIVE CONTINUED FUNDING FOR PROGRAM IN LETTER TO SENATE

By Howard Green

The recently released Senate health care plan, if passed, would greatly scale back Medicaid financing. This would cripple the program that serves healthcare to a significant portion of the population. Reforming the program is critical; yet, the recent proposal has brought the health insurance industry to their feet. Chief executives in the industry have filed a joint letter to the Senate imploring them to reconsider their plan for financing Medicaid. The letter requests that Senators carefully consider the consequences of drastically altering Medicaid funding. CEO's from the countries largest Medicaid plans signed the letter. They claim that the ACA, along with its underlying structure to finance Medicaid, should be reformed in ways that encourage savings rather than cutting funding to the states.

" This year's discussion began with a focus on the ACA's individual insurance market, but current healthcare proposals go further and do not enact meaningful, needed repairs to the ACA," the letter says.

" However, our primary concerns lie in the impacts these policies will have on the 74 million low-income, disabled and elderly Americans whose healthcare coverage through Medicaid rests in the hands of the Senate as you craft new legislation and policy options."

As an alternative to the funding cuts under consideration, the joint letter urges Senators to integrate other options to preserve accessibility to quality care:

• Reduce regulation to increase efficiency
• Waiver flexibility for states
• Restructure the pharmacy program
• Value-based pricing
• Alternative payment methods for healthcare providers based on population
• Flexibility in utilizing Medicaid funds
• Consolidation of administration and benefit design for the dual-eligible

These health plan leaders universally advocate Medicaid reform, but they are united against the current proposal from the Senate.

" We are not advocating to maintain the status quo; rather we are advocating for meaningful Medicaid reform," the letter says.

The letter recognizes that the policies currently being deliberated in Congress, the federal government would introduce a limit on the funding it would offer to states each year starting in 2020, and in place of actuarial calculations the government would use 2016 Medicaid costs trended forward by the Medical Consumer Price Index. That strategy is projected to diminish the federal share of Medicaid funding by more than $800 billion over 10 years, amounting to a 25% shortfall in covering the actual cost of Medicaid.

" While this may appear positive from an immediate budgetary perspective, these amounts spell deep cuts, not state flexibilities, in Medicaid. There are no hidden efficiencies that states can use to address gaps of this magnitude without harming beneficiaries or imposing undue burden to our health care system and all U.S. taxpayers," the letter says.

" Reducing the federal government's share of Medicaid in this manner is not meaningful reform to bend the cost curve. It is simply an enormous cost shift to the states. It does nothing to address underlying drivers of the cost of care, like expensive new drugs and therapies, and an aging population living longer with disability."

In order to make up for the reduction in funding, States would need to raise taxes, reduce benefits, cut reimbursement, and remove some eligible beneficiaries.

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