Trump officials take bold steps on Medicaid

The Trump administration is pulling out all the stops to encourage red states to make conservative changes to Medicaid without congressional input.

Administration officials are pushing ahead and granting approvals to states seeking to impose work requirements on Medicaid recipients, even in the face of legal challenges and large-scale losses in the number of people covered.

Last week, the Centers for Medicare and Medicaid Services (CMS) granted Ohio’s request for work requirements, the ninth such approval since  President Trump took office.

The approval was announced just one day after administration lawyers were in federal court defending the work requirements for two other states, Arkansas and Kentucky.

“To approve it the day after the court hearing was pretty in-your-face,” said Joan Alker, executive director of the Georgetown University Center for Children and Families. “It’s a statement of, ‘we’re going to push forward with our policy regardless of what a judge thinks.’ ”

Those bold moves have critics of the administration’s policies up in arms. They point to how administration officials handled Kentucky’s Medicaid work requirements.

D.C. District Court Judge James Boasberg, an Obama appointee, in 2018 blocked Kentucky’s work requirements from taking effect.

The administration sought more comments on the policy. CMS Administrator Seema Verma ultimately granted approval to Kentucky to move ahead with work requirements even though the state made few changes to their plan.

The administration was sued again over Kentucky’s rules, and last week the case landed back in front of Boasberg.

The administration has staunchly defended its bold moves. 

Verma has been outspoken in her support of work requirements and has made approving state requests one of her top priorities.

“The Medicaid program was designed to serve our most vulnerable populations like children and people with disabilities,” Verma wrote in a blog post last week. She said the changes were a “logical” step, considering “the unprecedented expansion of [Medicaid] eligibility to childless, working-age adults that occurred under Obamacare.”

Democrats have been pushing back on the administration’s changes. Last month, after reports that 18,000 people lost their coverage under work rules in Arkansas, top Democrats urged officials to reverse course.

House Energy and Commerce Committee Chairman  Frank Pallone Jr. (D-N.J.) and Senate Finance Committee ranking member  Ron Wyden (D-Ore.) in a letter to Health and Human Services (HHS) Secretary Alex Azar said the changes would “impede access to critical care for millions of Americans.”

But the administration’s efforts are much broader than work requirements.

Azar has also been quietly trying to sell states on the merits of imposing block grants, or a per-person spending cap, without congressional approval.

Azar revealed those discussions for the first time during a Senate hearing last week.

“We have discussions with states where they will come in and suggest ideas,” Azar told the Senate Finance Committee. “There may be states that have asked about block granting, per capita, restructurings around especially expansion populations ... It’s at their instigation.”

Imposing block grants in Medicaid has long been a major conservative goal. Republicans say policies like block grants and payment caps allow for more state flexibility and are more fiscally sustainable.

Azar’s admission raised hackles among Democrats, who fiercely oppose the idea, which would limit the amount of money going to Medicaid. Democrats argue the changes require harmful cuts in the program.

Sen.  Bob Casey Jr. (D-Pa.), who asked Azar about his meetings with states, pledged that Democrats will fight any Medicaid cuts.

“To say that I and many others will fight these cuts with an unyielding passion is an understatement,” Casey warned.

On the talks between HHS and states, Casey said, “We need to know what’s happening in those conversations.”

A Medicaid lobbyist said the administration has been actively seeking out states willing to experiment with new models of financing Medicaid that have never been previously approved.

“There’s definitely outreach and encouragement,” the lobbyist said. “The administration is saying ‘we’re open and we want to talk.’ ”

The full court press on Medicaid reforms is also a risky strategy for the administration. With 2020 quickly approaching, Democrats are already vowing to make Trump’s policies on Medicaid and Medicare a campaign issue. The party is already feeling emboldened from their 2018 win in which health care and defending ObamaCare were central to Democrats’ success in retaking the House.

A five-figure ad campaign from a Democratic group, Protect Our Care, on Monday targeted Republicans over Trump’s fiscal 2020 budget, which included sharp cuts to health programs.

Administration officials are also drafting a guidance or regulation that would make it easier for states to apply for a capped payment or block grants, another controversial move.

To date, Utah is the only state that has requested a per-person spending cap. Experts say that request is unique because the state is hoping to use the policy to leverage the administration into fully funding a partial Medicaid expansion.

Utah officials told The Washington Post last month that they had heard from Trump administration officials that it could be possible to combine the smaller Medicaid expansion — up to 100 percent of the federal poverty level, instead of 138 percent — with a per capita cap on the funds.

But per capita caps and block grants have already been rejected by Congress. Both were part of the GOP’s ObamaCare repeal bill that failed in 2017.

Allowing states to impose those same changes by statutory waiver, without congressional approval, would be extremely controversial and have widespread implications about the use of executive power.

“This is a separation of powers issue,” Georgetown’s Alker said. “Congress retains the authority to change Medicaid. The waiver was not intended to allow the executive branch to rewrite the Medicaid statute.”

Allowing per capita caps and block grants are also likely to lead to more lawsuits.

Robin Rudowitz, associate director for the Kaiser Family Foundation’s Program on Medicaid and the Uninsured, said the waivers the administration grants to allow changes to Medicaid afford states broad discretion.

But she said it’s not clear if that waiver authority extends to ideas that Congress previously rejected.

“They’re trying to implement that policy through administrative vehicles,” Rudowitz said.

Whether the administration can do that, she added, will be up to the courts.