PRESIDENT TRUMP'S BUDGET FOR FISCAL YEAR 2019

The Trump administration has made considerable efforts to reform the ACA. In spite of all of the failed efforts in 2017, the Whitehouse is once again targeting the nation's healthcare safety net. The recently introduced budget for Fiscal Year 2019 clearly outlines the president's aim to restructure Medicaid over the following twelve months.

REVISE THE AFFORDABLE CARE ACT AND REFORM MEDICAID

The Trump administration will continue its attempts to remove and replace the ACA with a bill reminiscent to what Senators Graham and Cassidy presented last fall. Had the Graham/Cassidy bill passed, the landscape of Medicaid would have dramatically changed. The approximated number of uninsured Americans would have risen to 20 million by 2026 and federal health care expenditures would be cut in 10 years by $215 billion.

In Trump's budget proposal, the funding from the ACA for Medicaid expansion and premium subsidies would be distributed as block grants to each state. In addition, the proposal would put into place a per-person spending cap for Medicaid. Trump's proposed budget places serious cuts for Medicaid above and beyond the Graham/Cassidy block grants. For instance, $675 billion would be cut from federal spending and Medicaid would experience a $1.4 trillion cut due to offset spending on block grants.

While the president's health care reform initiatives have not yet materialized, the numerous attempts are definite indications of intent for the nation's healthcare system. In the event that the GOP can secure a larger Senate majority in the upcoming midterm elections, the administration's vision could quite possibly become a reality.

BIG PHARMA AND MEDICAID DRUG PRICES

Though the Trump administration has not made any progress to bring down the price of pharmaceuticals, the budget does include a number of drug cost proposals. For instance, Medicaid could create drug formularies of preferred drugs so private insurers could negotiate drug prices with pharmaceutical companies. However, it is uncertain if President Trump and Congress would approve the formulary system.

MEDICAID COULD GO THROUGH ADDITIONAL CUTS

Aside from the $1.4 trillion in reform cuts and spending caps, the president might also:

• Cut $2.2 billion by denying benefits to individuals that cannot verify their immigration status
• Cut $1.3 billion over 10 years by increasing the copayments of beneficiaries for improper use of the ER
• Cut $2 billion by 2028 by authorizing asset and income testing for Medicaid eligibility

The president has made evident through his budget that he plans to restructure healthcare and Medicaid. Although the president and the GOP's attempts did not happen last year, it is clear that they will continue their efforts in 2018.

Click here to keep reading.

MANAGED MEDICAID MARKET IN 2018

Over the past year, the Trump administration and the GOP had a strong push to reverse the ACA in addition to reforming Medicaid. With the New Year in progress, it is very clear that the uncertainty in Medicaid's future is a reason for concern among Medicaid managed care organizations.

In 2017 the Senate and House both failed to reform the Federal Medical Assistance Percentages (FMAP) structure from fixed per capita allotments to block grants for states. President and CEO of Medicaid Health Plans of America, Jeff Myers, explained, "its kind of like being in a major gunfight when the gun smoke's all around you. It's still very cloudy and there are going to be lots of challenges this year, but I think 2017 kind of changed the nature of the debate." Legislators have "a very different perception of Medicaid. Trying to swing a hammer at it is not effective".

These bills aimed to get rid of enhanced FMAP funding for the program. The CBO foresees that the White House and GOP's efforts to restructure funding through the bills could have initiated massive reductions in federal expenses to Medicaid between $772 billion and $834 billion.

Myers recognizes that Medicaid is complicated and has a "meaningful impact on state budgets far beyond just treating their most disadvantaged citizens." Because of this, the probabilities are slim that Medicaid financing will experience fundamental restructuring from Congress.

Nonetheless, The Tax Cuts and Jobs Act of 2017 passed shortly before Christmas repeals the ACA requirement for purchasing health insurance coverage. According to the CBO, eliminating this mandate could possibly lead to millions of uninsured people between 2019 and 2027. The president of EBG Advisors, Bob Atlas, notes, "Medicaid is implicated because when people in fulfilling their obligations under the mandate go to sign up, many of them discover they are eligible for Medicaid and by law are steered in that direction. So, if fewer uninsured people are going through the enhanced process of seeking coverage, fewer are going to end up on Medicaid."

MEDICAID EXPANSION FOR MORE STATES 

In addition to enhanced FMAP funding, it is probable that more states will look to expand Medicaid. Maine for example, pushed a referendum through to grow the program but it was blocked by Governor LePage (R). He wants the state to fund their program before expansion is taken into consideration. On the other hand, VA Governor-elect Northam (D) is seeking to expand the program despite the opposition from state legislatures. Having said that, the move to expand the program is unresolved within the House of Delegates.

Bob Atlas, also pointed out that Medicaid budgets could be drastically strained from the new tax law. By restricting the deductibility of state and local income and property taxes, states with higher taxes will be pressured by taxpayers to lower them also.

MHPA stresses that behavioral health costs, drug spend, and long-term care cost are the primary factors that Congress must deal with in order to improve Medicaid spending. Presently, MHPA is completing a proposal for revisions to the Medicaid Drug Rebate Program. They are of the opinion that the program promotes improper pharmaceutical pricing incentives. Their objective is to design Medicaid drug pricing off of the Medicare Part D program.

POTENTIAL MEDICAID WORK REQUIREMENTS

Myers and Atlas are in agreement that states will aim to relieve financial pressures on the program by adjusting Medicaid enrollment via the Section 1115 demonstration waiver process. Atlas claims, "a number of Republican-led states are proposing to implement work requirements as a condition of eligibility for so-called nondisabled people." At this point, seven states have submitted such waivers to CMS. As a result, MCO's have sought partnerships with local agencies to join their recipients with employment opportunities. Atlas notes that apart from work requirements, measures to raise the frequency of eligibility recertification and to get rid of retroactive eligibility will trigger intense controversy in Medicaid enrollment. It is a legitimate possibility that these types of modifications will be met with lawsuits.

MEDICAID MANAGED CARE REGULATION REVISIONS

For now, Plans are anxious to see CMS's revisions to the Medicaid managed care rule from 2016. Last year, Seema Verma from CMS, committed to a, "full review of managed care regulations in order to prioritize beneficiary outcomes and state priorities."

According to Myers, "I think generally the questions we have are, if they're going to redo the managed care regs, are they making it easier for our state partners to provide data to CMS that's valuable to both, are they ensuring that there's no duplication of efforts so that plans aren't being asked for one more thing that people don't actually use, and then lastly, in any type of reform are they ensuring that the actuarial soundness requirements are met? Because if those aren't met, then services can't be provided."

Click here to read more.