THE WINDOW OF OPPORTUNITY IS CLOSING FOR VA MEDICAID EXPANSION

In February, Virginia's work on the Commonwealth's biennial spending plan budget came to a halt because of the inclusion of provisions for Medicaid expansion. In short, the Republican House backs expanding Medicaid while the Republican Senate does not. Due to the divided GOP support, the regular session was adjourned and no budget was successfully passed. Virginia Governor Northam (D) compelled legislators to deliver as soon as possible. He warned that if a proposal was not drafted and on his desk in the near future, he would submit a budget that expanded Medicaid without some of the compromises made with Republicans; such as, imposing co-pays and work requirements.

Northam stated, "We've obviously compromised. If I send an amendment down, and I will if I need to, some of those compromises won't be in there and it will be closer to the original proposal in the budget Governor McAuliffe and I introduced."

McAullife's budget was rejected last December. The failed budget proposal had provisions for Medicaid expansion without conditions like work requirements or co-pays.

In an attempt to assist low-income citizens, Governor Ralph Northam followed through on his warning and revealed his proposed budget last week. He will deliver it to the Virginia General Assembly on April 11. According to the Virginian governor, the plan mirrors McAullife's plan but it will also incorporate an amendment created to invest in a revenue reserve fund.

Northam states, "Virginians have waited long enough for a balanced budget that expands health care access and invests in economic opportunity through education, workforce training, mental health and addiction services, and better pay for public servants. The General Assembly will return on April 11th to pass the budget Virginians deserve, but we shouldn't wait until then to get to work. My team and I are ready to work with the General Assembly money committees to get Virginia families, local governments, institutions of higher education and many others the certainty and resources they deserve by passing a budget that expands health coverage."

Under Gov. Northam's budget, Medicaid expansion would be available to almost 400,000 citizens. As a result of savings from the expansion, investments could then be made into workforce development, opioid addiction prevention, education, mental health services, and increases in pay for state workers. Additionally, the amendment would direct revenues that exceeded those predicted in the budget to a revenue reserve fund. This investment would serve to provide the state additional financial security in economic downturns.

According to Northam, "The budget I am introducing makes a strong investment in our Commonwealth's cash reserves. However, in a period of unprecedented volatility in Washington and economic uncertainty across the globe, we should do everything we can to shield Virginia taxpayers against an unexpected revenue shortfall. By including this amendment we can maintain a fiscally conservative budget and send a message to Virginians and to the rating agencies that this budget will invest wisely while also preparing for unexpected downturns."

After the budget was introduced, House Republicans went on the record claiming that the governor's proposal is "the start of a process that we are confident will lead to the adoption of a new budget long before July 1."

After the announcement, Senate Majority Leader Thomas K. Norment (R) criticized the proposal when Northam characterized it as a guide for discussion. Norment said, "That he (Gov. Northam) continues to make Obamacare's Medicaid expansion integral to that budget, and his refusal to base his plan on a more current revenue forecast means the current standoff can not be resolved quickly."

Medicaid's landscape continues to be a focus between Virginia's lawmakers in 2018. Due to the dispute among Republicans and Northam's recent proposal, it is unclear if Medicaid expansion will occur or if there will be work requirements and other conditions for eligibility. Legislators will reconvene in a special session on April 11 but if they do not successfully pass a budget, Virginia would have its very first government shut down.

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A MEDICAID MODEL THAT INCLUDES WORK REQUIREMENTS, PREMIUMS, TIME LIMITS & DRUG TESTING

In 2017 the GOP and Trump Administration made a number of attempts to reform Medicaid by trying to repeal the Affordable Care Act (ACA) and enforce federal spending caps for the Medicaid program. Although these initiatives were not successful, the future of the Medicaid program is still vulnerable to administrative actions from CMS. It is evident that this administration has a very different vision for the future of Medicaid than its predecessor.

A report performed by the Henry J Kaiser Family Foundation highlights Medicaid's changing landscape. For example, states that grew their Medicaid programs under the ACA such as Kentucky, Indiana, Arkansas, Arizona, and New Hampshire are additionally pursuing work requirements and other conditions for beneficiaries. In addition, some states that did not adopt expansion under the Obama administration, like Virginia, are now taking it into consideration under the condition that work requirements are put into effect.

HOW THIS NEW MEDICAID MODEL IMPACTS THE STATES

The new vision for the Medicaid program is a stark contrast to that of the ACA's. The Kaiser Family Foundation predicts that the work requirements and additional restrictions will affect about 24.5 million people including non-elderly and non-disabled adults. As a result, childless adults are at the greatest risk of losing coverage. In spite of the large population that will be affected by new conditional requirements, it is important to keep in mind that the work requirements and restrictions will not affect the majority of those participating in the program. For instance, children, elderly, disabled, and pregnant enrollees make up more than half of Medicaid enrollees and are either exempt from such laws or covered by federal law.

The work requirements and other conditions are a sign that states entertaining these waivers are making use of them as a method to reduce costs by reversing Medicaid expansion or introducing downsized programs. Medicaid professionals see this as a significant threat and inconsistent with how waivers have been used traditionally. The executive director of Georgetown University's Center for Children and Families, Joan Alker, sees them as a way to simply cut coverage. According to Alker, "Under any previous administration, waivers have not been used to devise ways to cut coverage."

The state of Kentucky, led by Governor, Steve Beshear (D), was amongst the states that had expanded its Medicaid program under the ACA, increasing coverage to an additional 350,000 enrollees. According to Gallup, the state saw a significant drop in its uninsured rates between 2013 and 2016 from 20.4% to 7.8%. Regardless of the increase in eligibility the newly elected Kentucky Governor, Matt Bevin (R), did not agree with the expansion. He believes that the program is for the most vulnerable people and the work requirement works to protect the program and its services. In August 2016, Governor Bevin put forth a new plan that included work requirements to HHS.

According to Kentucky.gov, "the submission of this waiver is the result of many months of extensive research, planning and time spent traveling the state listening to Kentuckians," said Gov. Bevin. "Kentucky HEALTH will allow us to continue to provide expanded Medicaid coverage, but unlike the current Medicaid expansion under Obamacare, it will do so in a fiscally responsible manner that ensures better health outcomes for recipients." Shortly after the New Year, CMS approved Kentucky's Section 1115 demonstration waiver, Kentucky Helping to Engage and Achieve Long-Term Health aka "KY HEALTH." Health Law Policy Matters has documented what this will mean for the state and notes that the full implementation is expected to begin in July of 2018.

After a 5-year period, The Commonwealth Fund predicts that enrollment rates would drop nearly 15 percent. This figure consists of enrollees made eligible from the expansion and traditional enrollment. According to Governor Bevin, those 100,000 people would need to receive insurance coverage from an employer or through a private provider. This may be challenging since KFF has reported that 60% of adults on Medicaid are currently working.

Health professionals, including Cindy Mann of Manatt Health, are worried about the direction Medicaid is headed. They believe that the repercussions of work requirements are not being taken into account. Mann stated, "the people who policymakers and the public would want to protect, with medical conditions, barriers to employment, they're going to be exempt. But the system isn't geared to get these people out of harm's way. It's the people who are least able to gather the paperwork required that will get caught in the cracks and will lose their coverage."

The debate over Medicaid comes down to two competing philosophies. Republicans claim that the program has expanded beyond its initial objective, thereby endangering its capacity to provide coverage and services to the most vulnerable. They argue that work requirements and conditional restrictions are aimed at those individuals for whom the program was never intended; furthermore, the conditions for enrollment are designed to help people become independent from Medicaid. Democrats view the approval of 1115 waivers as a way to simply cut coverage since attempts to reform the program in 2017 were a failure. Democrats argue that Medicaid is intended to provide insurance and not to encourage employment. Cutting costs and reducing coverage only prevents the program from performing its primary mission. As legislators debate, some states have already received approval for their work requirement waivers. It seems, that this is only the start and its very likely that more states will follow suit.

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