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Decoding CMS’s Medicaid Announcement

October 4, 2022
Topic Analyses

There’s been lots of buzz about the news this week on CMS’s new demonstration initiatives in Massachusetts and Oregon designed to keep children enrolled in Medicaid continuously up to age six:

Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), approved groundbreaking Medicaid section 1115 demonstration initiatives in Massachusetts and Oregon. Both demonstrations aim to test improvements in coverage, access, and quality with innovative approaches to ensure more eligible people retain their Medicaid coverage, including by approving Oregon’s demonstration to keep children enrolled in Medicaid up to age six — preventing gaps in coverage that can cause children to lose access to needed care in their formative early years.

That certainly sounds like a meaningful program, right? If you’re like us, you might have a million questions about what it actually means and what sort of impact we should expect from this news. So in an attempt to better understand what’s going on here, we enlisted the help of HTN friend and Medicaid nerd, Dr. Lindsey Leininger, to help us make sense of the news. Lindsey is a health policy analyst and faculty director of the Center for Health Care at Dartmouth’s Tuck School of Business. Her policy experience spans Medicaid, pandemic response & preparedness, and child & family policy. She teaches courses at the intersection of health analytics, public health, and the health care industry. Prior to joining Dartmouth, she spent a decade designing and leading research projects for Medicaid agencies, both in academic and think-tank settings.

What’s Happening Here?

Q: We’re wondering if you can start off giving your impression of what the program is at a very basic level for people who don’t have a deep knowledge of Medicaid. And from a macro perspective, how big of a deal is an announcement like this from CMS?

Medicaid provides health insurance for almost 90 million (!) low-income people in the U.S. Historically the program was tied to cash welfare assistance for very low-income kids and moms. It’s grown - wildly! - in the past decades. Key groups now covered by the program include pregnant women; children and families; disabled individuals; low-income seniors; and, in most states, low-income working adults. 

Although the feds provide the bulk of funding and some basic ground rules, states operate their respective Medicaid programs with considerable flexibility. As we Medicaid Nerds say, “you’ve seen one state’s Medicaid program, you’ve seen one state’s Medicaid program.” Note the contrast between Medicaid and Medicare, the program primarily targeted to seniors age 65+ of all incomes, which is a federally operated program. Medicaid being a state-run program means that the states are generally the engines of innovation. 

Sticking with the car metaphor, the 1115 waiver program is the chassis for change - providing a structure with which states can petition the feds to try new things. 1115 negotiations can get sticky, and as you might expect, are stickiest when dueling political philosophies are at play. For example: when a Republican is president, the feds are more keen on allowing work requirements for “able-bodied” adult enrollees. When a Democrat is president, the feds are more keen on loosening eligibility requirements, like the Oregon proposal announced in the press release. To get smart quickly about 1115 waivers, I highly recommend spending some time on Kaiser’s Medicaid tracker site.

I think the Oregon announcement is a big deal because it sets a new precedent for states to be able to grant blanket eligibility to all children under the age of 6 with minor administrative hassle. Not all states will follow the lead, especially red states. But the Oregon announcement changes the goal post in a meaningful way and I do anticipate there will be many states who follow the Oregon Trail. (oof - apologies for the bad video game joke)

Q: We hear a lot about continuous enrollment in Medicaid and the problems of gaps in care, but it’s often from the lens of the healthcare system. Can you shed any light on what a program like this means for the parents and children impacted by this in Oregon and Massachusetts?

The administrative hassle of keeping kids enrolled in Medicaid is a huge burden on families. And it directly impacts children’s health. A few years back, I was helping a friend keep current with her and her son’s Medicaid applications and a government snafu kept him from receiving much needed care for a painful tooth abscess. The paperwork for his redetermination was submitted on time, but the state had a backlog that was taking months to clear. He missed a dentist appointment that took months to schedule - dentists don’t get paid well on Medicaid and access can be quite limited - because he was technically uninsured during the interregnum. Even though his mom had “followed the rules” and had a Medicaid expert helping her navigate the system he couldn’t get the care he needed. 

Q: When I look at what Medicaid section 1115 waivers are, it seems like they are 5 year demonstration projects. Are these important in the Medicaid space? Do states and the federal government use them often to drive meaningful change? Any particularly notable examples of success (or failure) of these programs in driving change?

Very important! (See the chassis metaphor above :)). 1115 waivers are often renewed well beyond the initial five-year runway, and a pretty decent argument could be made that 1115 waivers have been the most impactful policy-making tool in Medicaid.

Why Does This Matter?

Q: As we’ve talked about before, we don’t think enough folks realize that ~50% of births nationally are covered by Medicaid. Presumably Oregon and Massachusetts are doing this because it’s a big need for their populations - any insight as to why?

Public health need + liberal political culture = more generous Medicaid policies.

Q: We’re curious what this means for other states beyond Massachusetts and Oregon. Obviously Medicaid is state-based, so it doesn’t seem like this will necessarily translate over. But could you give some context for how Massachusetts and Oregon compare to other states with this initiative, and if we might see other states adopt similar efforts?

I talked a little about this above (again, apologies for the bad Oregon Trail joke. I’m a Gen Xer and that game was pretty much the best thing about elementary school in the 80s). 

In a blog post for the Yale Law Journal, Anthony Albanese wisely points out that waivers often “foreshadow national attempts at reform.” We’ll see if that plays out in this case. Short- to medium- term traction will depend a lot on elections, especially at the federal level. I don’t, for example, see a conservative Republican administration entertaining pioneering 1115 activities focused on easing application burden and expanding coverage for social-services-as-health services.

What Will You Be Watching For?

Q: We’ve noticed over time that initiatives that sound really cool tend to go quiet and fizzle out over time in healthcare. What would you say are the big risks for a demonstration project like this? 

It’s typically the opposite in state and federal health policy, actually! Things get entrenched and never, ever, ever change. Especially once a benefit is expanded…it becomes politically unpopular to take it away.

Honestly I don’t see much downside to the Oregon policy. It likely won’t cost much financially on net; administrative redetermination is costly for states and children are relatively inexpensive to cover. Oregon has a liberal political culture, so I also don’t foresee huge issues with public backlash or gotcha media reports along the lines of “Expose: Rich kids on Medicaid!”  Ensuring program integrity and perceptions thereof is incredibly important in more politically conservative states. The electorates in these states highly value program integrity, and Medicaid officials need to honor those preferences. I’ve worked for Medicaid officials in red and blue states (and purple states changing from red to blue and back again!) and I have immense respect for their work. I believe they do the best they can to promote public health within the political and financial constraints at play. 

Q: Are there any good resources you’d recommend for folks looking to stay on top of things like this?

Kaiser Family Foundation is the best one-stop shop for all things Medicaid. (Start here). Also: the Kaiser Health News daily digest is a must-read. I never, ever skip a day reading it. On all things kids and families and Medicaid I love resources produced by Georgetown’s Center for Children and Families.  If you can brave the horrible UX, the CMS website has some great data

Thanks so much to Lindsey for sharing your wisdom here with us! :)