Whereas Medicaid coverage might not be a central situation candidates are speaking about, the end result of the election may have main implications for Medicaid, the first program offering complete protection for over one in 5 low-income People. Medicaid is collectively financed by the federal authorities and states and administered by states inside broad federal tips. Medicaid represents almost one in 5 {dollars} spent on well being and disproportionately funds safety-net hospitals and clinics, behavioral well being care, and long-term companies and helps (LTSS) locally and nursing houses for seniors and other people with disabilities. Medicaid has develop into a significant a part of our well being care system, with two-thirds of People having a connection to Medicaid. Public opinion polling reveals Medicaid has broad assist throughout political events.
This transient highlights main coverage variations beneath the Biden-Harris Administration and the Trump Administration on key Medicaid matter areas. The transient examines the data and proposed budgets beneath President Biden and Vice President Harris and former President Trump in addition to main legislative proposals that former President Trump supported. Funds proposals usually embrace coverage proposals that may require Congressional motion to enact. The 2024 Republican Social gathering platform calls for brand spanking new reasonably priced well being care and prescription drug choices with protections for Medicare and seniors however doesn’t embrace any particulars about Medicaid coverage. To assist inform the vary of choices that could possibly be thought-about beneath a Trump presidency, this transient additionally examines Medicaid insurance policies included within the Republican Research Committee (RSC) FY 2025 price range and the Heritage Basis’s Challenge 2025. Former President Trump has not endorsed these proposals, although there would probably be a push for them from conservative teams and Republicans in Congress if Trump wins the election. Coverage variations are highlighted throughout the next key Medicaid matter areas, with extra element about candidate data and particular sources within the Appendix.
The evaluation finds that Vice President Harris and former President Trump have vastly totally different data, views on, and coverage proposals for Medicaid (Determine 1). Extra broadly, as KFF President and CEO Drew Altman lately wrote, “Republicans and Democrats have basically totally different world views of this system.”
Biden-Harris Administration coverage proposals have typically targeted on efforts to “defend and strengthen Medicaid and the Reasonably priced Care Act (ACA)” by increasing well being protection and enhancing continuity of protection, lowering the speed and variety of uninsured, increasing entry to care, and lowering well being disparities. These insurance policies typically preserve or enhance federal Medicaid spending.
Former President Trump has not talked particularly about Medicaid within the present marketing campaign, however his report as president and proposals from Republican teams embrace plans to repeal or weaken the ACA, cap and scale back Medicaid financing, and limit Medicaid eligibility, with the overarching objective of lowering federal spending on Medicaid. Estimates of financial savings vary broadly, from a $4.5 trillion discount over 10 years (over a 50% discount) beneath the RSC FY 2025 price range proposal, to earlier Congressional Republican proposals that may have diminished Medicaid spending by 25% or one-third, to different proposals with smaller total reductions however giant shifts in spending throughout states. Reductions in federal spending typically shift danger and prices to states in addition to enrollees and would probably enhance the variety of uninsured individuals.
Key Takeaways
Vice President Harris inherits the report of the present administration however has additionally independently targeted on reproductive rights and insurance policies aimed toward lowering maternal mortality and morbidity. Main Biden-Harris Administration efforts throughout key Medicaid matter areas embrace:
ACA Medicaid Growth: The Biden-Harris Administration applied insurance policies to strengthen the ACA, together with enacting laws with an extra fiscal incentive for states to undertake Medicaid growth. The administration additionally proposed a plan to shut the protection hole in states that haven’t expanded Medicaid, but it surely didn’t move Congress.
Financing: The administration constructed on the prevailing Medicaid financing framework by increasing federal matching funds for precedence areas, reminiscent of incentivizing states to broaden Medicaid house and community-based companies (HCBS).
Eligibility, Advantages, and Price-Sharing: The Biden-Harris Administration enacted laws to broaden entry to medical insurance protection by requiring 12-month steady eligibility for youngsters and creating an choice for states to increase postpartum protection to 12 months in addition to cowl sure justice-involved youth. Throughout the unwinding of the Medicaid steady enrollment provision, the administration issued steering and supplied states with extra waiver flexibilities to assist eligible enrollees retain protection.
Prescription Medicine: The Inflation Discount Act (IRA), enacted in the course of the Biden-Harris Administration, included a number of provisions to decrease prescription drug prices and scale back drug spending by the federal authorities, together with permitting the federal authorities to barter costs for some medicine in Medicare and requiring that drug producers pay rebates for value will increase above inflation in Medicare. Inside Medicaid particularly, the administration has enacted insurance policies (in addition to proposed extra insurance policies that didn’t move) to broaden and strengthen the Medicaid drug rebate program (MDRP).
Lengthy-Time period Providers and Helps: The administration enacted laws to extend federal funding for Medicaid HCBS and issued laws to extend entry to Medicaid HCBS, promote greater fee charges for house care staff, and set up minimal staffing necessities in nursing amenities. President Biden and Vice President Harris have referred to as for added, everlasting federal funding for HCBS, which didn’t move.
Managed Care: The Biden-Harris Administration issued up to date Medicaid managed care laws aimed toward enhancing entry to care, high quality, well being outcomes, and well being fairness in addition to took motion to enhance Medicaid managed care monitoring, oversight, and transparency.
Particular Republican insurance policies, each throughout and after the Trump Administration, throughout key Medicaid matter areas embrace:
ACA Medicaid Growth: The Trump Administration proposed and supported unsuccessful efforts to repeal and change the ACA, together with Medicaid growth. Newer Republican proposals, the RSC FY 2025 price range and Challenge 2025, don’t specify an entire repeal however search to cut back the upper match fee for the Medicaid growth group and eradicate expanded Market subsidies.
Financing: The Trump Administration proposed and supported legislative proposals to restrict federal Medicaid spending by restructuring Medicaid financing right into a block grant or per capita cap. The RSC FY 2025 price range and Challenge 2025 additionally recommend a block grant or cap in addition to adjustments in federal matching funds.
Eligibility, Advantages, and Price-Sharing: The Trump Administration accredited waivers that included work necessities as a situation of Medicaid eligibility, premiums, and different eligibility restrictions. The RSC FY 2025 price range and Challenge 2025 additionally suggest proscribing Medicaid eligibility, advantages, and continuity of protection, together with actions reminiscent of imposing work necessities, eliminating minimal eligibility thresholds, and offering state flexibility to revamp and eradicate sure advantages.
Prescription Medicine: The Trump Administration aimed to deal with excessive drug prices by permitting the importation of medicine from Canada and inspiring states to submit waivers to create closed formularies. Each the RSC FY 2025 price range and Challenge 2025 search to repeal the IRA, citing its implications for drug innovation.
Lengthy-Time period Providers and Helps: The Trump Administration diminished federal oversight over nursing amenities, however newer Republican proposals give little indication of LTSS coverage priorities.
Managed Care: The Trump Administration modified Medicaid managed care guidelines, together with enjoyable Medicaid managed care plan community adequacy guidelines and necessities for beneficiary protections. Challenge 2025 proposes to reform and enhance oversight of Medicaid managed care however doesn’t present specifics.
Particulars of Medicaid Insurance policies and Proposals
Reasonably priced Care Act (ACA) Medicaid Growth
Context: The ACA expanded Medicaid protection to almost all adults as much as 138% of the federal poverty stage (FPL) ($20,783 for a person in 2024), however it’s successfully an optionally available coverage for states following a ruling by the Supreme Court docket. As of summer time 2024, 41 states together with DC have expanded Medicaid whereas 10 states haven’t, leaving 1.5 million uninsured individuals within the “protection hole” (adults who’ve incomes above their state’s eligibility for Medicaid however under poverty, making them ineligible for subsidies within the ACA Marketplaces). The ACA growth group is financed with a 90% federal match fee or “FMAP”, so states pay 10% of the prices for the growth group. Knowledge from June 2023 present nearly 24 million adults had been enrolled in Medicaid by way of the ACA growth eligibility pathway. Whole spending for this inhabitants in fiscal 12 months 2022 was over $155 billion, together with $138 billion in federal spending and $17 billion in state spending. The ACA additionally created medical insurance trade markets, or Marketplaces, which provide backed protection to those that should not eligible for Medicaid and who do not need entry to different reasonably priced protection.
Biden-Harris: The Biden-Harris Administration enacted laws to strengthen the ACA, together with an extra fiscal incentive for states to undertake the ACA Medicaid growth and non permanent enhanced subsidies for Market protection. The Biden-Harris Administration has additionally taken motion to extend funding for Market outreach and navigators and has supported laws to shut the protection hole (that by no means handed). 4 new states have adopted Medicaid growth since Biden and Vice President Harris took workplace, and the variety of individuals with Market protection has grown considerably beneath the administration. The Biden-Harris Administration’s newest price range builds on these actions by proposing to make the improved Market subsidies everlasting and persevering with to name for closing the protection hole. As part of a latest marketing campaign speech targeted on financial points in North Carolina, Vice President Harris additionally highlighted well being proposals together with extending the improved Market subsidies.
Trump and Republican Proposals: Former President Trump modeled proposals included in his 2019 and 2020 budgets on the Graham-Cassidy modification, which referred to as for repealing and changing the ACA (the FY 2021 price range was extra imprecise about well being reform proposals). Different laws launched however not enacted in the course of the Trump presidency — the American Well being Care Act (AHCA) and the Higher Care Reconciliation Act (BCRA) — additionally referred to as for repealing and changing the ACA. Extra lately launched Republican proposals don’t specify an entire repeal of the ACA, however the RSC FY 2025 price range proposes to eradicate the expanded ACA subsidies and scale back the FMAP for the Medicaid growth group. Challenge 2025 additionally proposes “a fairer and extra rational match fee” for the Medicaid growth group.
Tradeoffs: The Biden-Harris Administration proposals would assist expanded protection however enhance federal spending. Republican proposals would eradicate or severely restrict entry to reasonably priced medical insurance protection for low-income adults however would cut back federal spending. Rolling again the ACA Medicaid growth may even have implications for state fiscal circumstances and suppliers. The federal authorities pays the overwhelming majority of growth prices, and the literature reveals that states increasing Medicaid beneath the ACA have realized price range financial savings, income features, total financial development in addition to noticed constructive results on the funds of hospitals and different well being care suppliers. Current KFF polling finds that greater than three in 4 (78%) enrollees and two-thirds of all adults in a non-expansion state say their state ought to broaden Medicaid to cowl extra low-income uninsured individuals. Among the many public total, increasing Medicaid is essentially cut up alongside partisan strains.
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Financing
Context: Medicaid is an entitlement program, which means people who meet eligibility necessities are assured protection and states are assured federal matching funds and not using a cap for certified companies supplied to eligible enrollees. The FMAP (federal match fee) for many Medicaid enrollees is decided by a formulation within the regulation that gives a match of no less than 50% and supplies the next federal match fee for states with decrease per capita incomes. There are additionally greater match charges for sure companies and populations just like the ACA growth group (90%). Medicaid additionally supplies “disproportionate share hospital” (DSH) funds to hospitals that serve a lot of Medicaid and low-income uninsured sufferers to offset uncompensated care prices. Medicaid represents nearly $1 out of each $5 spent on well being care within the U.S. and supplies vital financing for hospitals, group well being facilities, physicians, nursing houses, and community-based LTSS.
For state budgets, Medicaid is a spending merchandise and on the similar time the most important supply of federal revenues. To assist finance the state share of Medicaid, states can use funding from native governments or income collected from supplier taxes and costs to assist finance the state share of Medicaid inside sure limits and guidelines.
Biden-Harris: The Biden-Harris Administration has constructed on the prevailing financing framework by increasing federal matching funds for precedence areas, reminiscent of incentivizing states to broaden Medicaid or Medicaid house and community-based companies. The administration’s newest price range proposal (together with prior budgets) retains the Medicaid financing system as is beneath federal regulation and in addition supplies funding to enhance program integrity and stop fraud.
Trump and Republican Proposals: The Trump Administration and different Republican proposals examined goal to considerably restrict federal Medicaid spending by restructuring Medicaid financing right into a block grant or a per capita cap the place states would obtain a pre-set quantity of funding for Medicaid in whole or per enrollee. Usually, a base 12 months of Medicaid spending can be established after which the combination or per enrollee caps would enhance by a specified quantity every year, usually tied to inflation or inflation plus some share. To generate federal financial savings, the overall quantity of federal spending can be lower than what is predicted beneath present regulation. Program prices in extra of the overall or per enrollee caps wouldn’t be matched by the federal authorities, leaving states to cowl these prices or scale back Medicaid spending. Proposals that cap federal Medicaid funding may additionally eradicate the entitlement to protection or federal minimal necessities for eligibility and advantages. The Trump Administration FY 2020 price range proposed to transform federal Medicaid funding to a per capita allotment; this variation together with different well being care changes totaled $1 trillion in spending reductions relative to estimated spending beneath present regulation over 10 years. Newer Republican proposals, the RSC FY 2025 price range and Challenge 2025, name for capped Medicaid spending in addition to a match fee of fifty% for all eligibility teams and companies (RSC FY 2025 price range) or a “blended” match fee (Challenge 2025).
Proposals that basically change the financing construction and entitlement nature of this system would require legislative change and would have broad implications throughout all areas of Medicaid; nevertheless, even with out legislative adjustments, presidential administrations have choices to situation laws or steering in addition to approve demonstration waivers which may end in incremental program adjustments. In lieu of main legislative adjustments to Medicaid financing, former President Trump additionally issued steering and inspired states to use for Wholesome Grownup Alternative waivers that supplied states “in depth flexibility” to cowl sure teams of enrollees in trade for limits in federal financing and entry to shared financial savings for spending under the set cap; nevertheless, no states had been accredited for such waivers. Along with restructuring Medicaid financing, Republican proposals additionally embrace provisions to limit using supplier taxes, fight Medicaid improper funds, and enhance program integrity.
Tradeoffs: Republican proposals would considerably scale back federal Medicaid spending and enable states extra flexibility to manage their packages. KFF evaluation has discovered that Medicaid financing caps would additionally restrict the power of states to fulfill altering wants and calls for (e.g. altering state demographics, rising high-cost medicine, and so on.), and will lock-in present state spending patterns that mirror historic Medicaid coverage decisions. States would probably need to make decisions to cowl fewer individuals, reduce advantages, and/or decrease fee charges for suppliers (although Medicaid is usually already the bottom payer), leaving extra individuals uninsured and reliant on security web suppliers or unable to entry care. Whereas states might achieve extra flexibility to manage their packages, these new choices should not prone to make up for vital cuts in federal spending. States would probably face challenges to sustaining protection, with sure states (like these with greater well being care prices or wants) extra in danger. Proposed adjustments to the FMAP ground or the ACA match fee may scale back federal spending however have disparate results on states. States with greater per capita incomes could possibly be most affected by calls to decrease the FMAP ground whereas states with decrease per capita incomes could possibly be most affected by proposals to have a uniform match fee of fifty%. Throughout many Republican proposals, growth states would fare worse than non-expansion states with proposals to cut back the growth match.
Current KFF polling discovered that just about 9 in 10 (86%) Medicaid enrollees need Medicaid to largely proceed as it’s right this moment, whereas one in ten (14%) assist altering Medicaid to cap federal funding and provides states higher flexibility in designing their packages. Considerably fewer adults total – although notably nonetheless a big majority – say the identical (86% vs. 71%). KFF polling has additionally discovered that majorities of voters are fearful about fraud, waste, and abuse in Medicaid, Medicare, and Social Safety in addition to in non-public medical insurance plans. Each events assist lowering waste, fraud, and abuse and specializing in oversight of managed care plans and suppliers; nevertheless, there was extra of a deal with lowering errors in eligibility determinations in the course of the Trump presidency in comparison with a deal with oversight of suppliers and managed care plans in the course of the Biden-Harris Administration.
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Eligibility, Advantages, and Price-Sharing
Context: Medicaid supplies financing for a wide range of teams and for a variety of companies. To take part in Medicaid and obtain federal matching funds, states should meet minimal federal necessities associated to who’s eligible and what companies have to be lined. States should present sure obligatory advantages (e.g., hospital, doctor, and nursing house companies) to obligatory populations (e.g., kids and low-income pregnant individuals) with out ready lists or enrollment caps. States can also obtain federal matching funds to cowl “optionally available” companies (e.g., grownup dental care and house and community-based companies ) or “optionally available” teams (e.g., kids and pregnant individuals with revenue above the boundaries established for obligatory populations). States do have the pliability to cost premiums and cost-sharing for some enrollees, although federal regulation limits the extent to which states can impose these measures.
Part 1115 Medicaid demonstration waivers provide states an avenue to check new approaches in Medicaid that differ from what’s required by federal statute. Whereas there’s nice variation in how states have used waivers over time, waivers typically mirror priorities recognized by states and the Facilities for Medicare & Medicaid Providers (CMS). States might get hold of “complete” Part 1115 waivers that make broad adjustments in Medicaid eligibility, advantages, supplier funds, and different program guidelines; different waivers could also be narrower and handle particular populations or advantages.
Biden-Harris: The Biden-Harris Administration enacted the 2023 Consolidated Appropriations Act, which required states to implement 12-month steady eligibility for youngsters, made everlasting the choice for states to increase postpartum protection to 12 months, and supplied states with the choice to cowl sure justice-involved youth. Vice President Harris has referred to as for lowering maternal mortality and morbidity, together with encouraging states to undertake the postpartum Medicaid protection extension. The Biden-Harris Administration additionally finalized a rule that aligns and streamlines enrollment and renewal necessities for most people in Medicaid; creates timeliness necessities for redeterminations of eligibility; eliminates entry limitations for youngsters enrolled in CHIP, reminiscent of ready intervals; and facilitates transitions between Medicaid, CHIP, and Market protection. Throughout the unwinding of the Medicaid steady enrollment provision, the administration issued steering and recognized a vary of methods and waiver flexibilities states may undertake to restrict protection losses amongst those that remained eligible.
For the 2025 price range 12 months, the Biden-Harris Administration proposes to require 12 months of postpartum Medicaid protection, broaden state choices to offer steady eligibility for youngsters for a number of years, and eradicate charges and premiums in separate CHIP packages. Additional, the Biden-Harris Administration continues to encourage waivers to broaden protection, scale back well being disparities, handle the social determinants of well being, and assist people transition out of incarceration.
Trump and Republican Proposals: According to the Trump Administration and older legislative proposals, latest Republican proposals would make a lot of adjustments that restrict Medicaid eligibility, advantages, and continuity of protection in addition to impose work necessities for enrollees. Extra particularly, each the RSC FY 2025 price range and Challenge 2025 suggest work necessities, making adjustments to eligibility thresholds (like eliminating minimal revenue eligibility for youngsters), establishing versatile accounts (like well being financial savings accounts) to pay for well being care, and offering state flexibility to revamp and eradicate sure advantages. Challenge 2025 additionally proposes focused cut-off dates or lifetime caps on advantages, requiring extra frequent eligibility redeterminations, and growing premiums and cost-sharing for some people. Capping federal funding, as all Republican proposals examined assist, would even have implications for the entitlement (assure of protection for eligible people that’s a part of present regulation) although not one of the proposals clearly word what would develop into of the entitlement or minimal eligibility thresholds. Part 1115 waiver priorities promoted and accredited beneath former President Trump included eligibility restrictions reminiscent of work and premium necessities and different circumstances on protection that didn’t require legislative adjustments to advance.
Tradeoffs: The Biden-Harris Administration proposals would broaden entry to protection in addition to hold extra people related to care over time however may enhance spending. Steady eligibility insurance policies, which have been embraced by the Biden-Harris Administration, have been proven to decrease charges of “churn,” or the non permanent lack of Medicaid protection by which enrollees disenroll after which re-enroll inside a brief time period. When people churn on and off protection, they expertise gaps in protection that may restrict entry to care and result in delays in getting wanted care. The Biden-Harris Administration proposals would additionally probably enhance enrollment amongst eligible kids by eliminating CHIP premiums and enrollment charges, which might pose limitations to protection.
In distinction, Republican proposals assist extra frequent and sturdy eligibility redetermination processes to make sure that solely eligible people stay enrolled in this system. Nevertheless, with extra frequent knowledge checks, eligible people are in danger for dropping protection if they don’t obtain or perceive notices or varieties requesting extra data to confirm eligibility or don’t reply to requests inside required timeframes. Some enrollees, reminiscent of working people whose month-to-month revenue fluctuates, can be at the next danger of churning on and off Medicaid than others. As well as, most Republican proposals embrace work necessities. The info present that almost all of Medicaid enrollees are already working, and out there implementation knowledge suggests that Medicaid work and reporting necessities are complicated to enrollees and end in substantial protection loss amongst eligible people who expertise challenges with reporting necessities. Republican proposals additionally present states extra flexibility by lowering necessities to cowl sure advantages and permitting extra premiums and cost-sharing. Total, Republican proposals describe these adjustments as aligning Medicaid with non-public insurance coverage, and they might probably scale back federal Medicaid spending. As a result of individuals on Medicaid have decrease incomes and are sicker than the overall inhabitants, these adjustments are additionally prone to pose limitations to enrollees’ capacity to take care of protection and entry wanted well being care.
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Prescription Medicine
Context: All state Medicaid packages have opted to cowl prescription drug advantages, and states have flexibility in how they administer the Medicaid pharmacy profit inside federal tips about pricing and rebates. Below the Medicaid Drug Rebate Program (MDRP), a producer should enter right into a rebate settlement with the Secretary of Well being and Human Providers, agreeing to rebate a specified portion of the Medicaid fee for the drug to the states and the federal authorities. In trade, Medicaid packages cowl almost the entire producer’s FDA-approved medicine, and the medicine are eligible for federal matching funds.
Biden-Harris: The Biden-Harris Administration enacted the Inflation Discount Act (IRA) of 2022, a significant piece of laws with a lot of prescription drug provisions aimed toward lowering federal drug spending, together with permitting the federal authorities to barter costs for some medicine in Medicare and requiring that drug producers pay rebates for value will increase above inflation in Medicare. The most recent proposed price range outlines steps to construct on the IRA, together with increasing the Medicare drug negotiation program. The administration additionally accredited Florida’s plan to import some prescribed drugs from Canada, although implementation is contingent on additional motion by Florida. Inside Medicaid, the Biden-Harris Administration has taken motion to strengthen the MDRP by lifting the rebate cap, and their newest price range proposal contains provisions to broaden the MDRP and permit the federal authorities to barter for supplemental rebates on behalf of state Medicaid packages, although these provisions haven’t handed. The Biden-Harris Administration additionally issued a proposed rule (but to be finalized) aimed toward growing value transparency and established a voluntary mannequin to extend entry to cell and gene therapies for individuals with Medicaid.
Trump and Republican Proposals: The Trump Administration inspired states to submit waivers permitting states to create closed formularies, enabling Medicaid packages to barter straight with producers for drug protection (beneath present regulation, the MDRP creates an open formulary). The Trump Administration additionally created a new pathway to permit states to import prescribed drugs from Canada, finalized a rule permitting producers to report a number of greatest costs beneath value-based buying agreements with the objective of accelerating value-based preparations within the MDRP, and proposed lifting the rebate cap (this was later lifted by Biden-Harris Administration laws). Each the RSC FY 2025 price range and Challenge 2025 search to repeal the IRA, citing its impression on innovation and affected person entry, and Challenge 2025 proposes to deal with drug shortages by eliminating producer rebate funds for multi-source generic medicine. Additional, broader Republican proposals to chop and cap federal Medicaid spending may have implications for prescription drug protection, as it’s an optionally available profit.
Tradeoffs: Current Republican proposals take goal on the IRA whereas the Biden-Harris Administration plans to proceed strengthening the IRA. KFF polling has discovered most voters are supportive of the Biden-Harris Administration proposals that construct on the IRA. Whereas the IRA is predicted to decrease prescription drug prices for individuals with Medicare and scale back drug spending by the federal authorities, the provisions do work together with the MDRP and will enhance total Medicaid prescription drug spending. Each administrations have taken motion on drug importation, however, whereas the thought of importing prescribed drugs has bipartisan assist among the many normal public, there are long-standing considerations by way of making certain drug security. The method can also be opposed by the Pharmaceutical Analysis and Producers of America (PhRMA) and the Canadian authorities and ensuing financial savings estimates are unclear.
The Trump and Biden-Harris Administration data on the MDRP have diverged, with the Biden-Harris Administration working to strengthen the MDRP whereas the Trump Administration proposed permitting states to decide out of this system. Whereas opting out of the MDRP may enable states to have extra leverage when negotiating (as a result of they may determine to not cowl sure medicine utterly), it’s not clear {that a} closed formulary would end in financial savings, and closed formularies can limit entry to medicine for enrollees. Additional, latest Republican proposals to deal with drug shortages and the late-era Trump Administration rule permitting a number of greatest value reporting may doubtlessly weaken the MDRP and scale back the rebates states and the federal authorities obtain from producers. In accordance with a Congressional Funds Workplace (CBO)Â examine, rebates within the MDRP end in decrease web drug costs in Medicaid in contrast with different federal packages.
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Lengthy-Time period Providers and Helps (LTSS)
Context: LTSS embody the broad vary of paid and unpaid medical and private care companies that help with the actions of day by day residing reminiscent of consuming and bathing and the instrumental actions of day by day residing reminiscent of making ready meals and managing medicine. They’re supplied to individuals who want such companies due to getting old, continual sickness, or incapacity and could also be supplied in institutional settings reminiscent of nursing amenities or in individuals’s houses and the group. Providers supplied in non-institutional settings are referred to as house and community-based companies (HCBS), and people settings might embrace an individual’s house, grownup day care facilities, assisted residing settings, and group houses. Medicaid is the first payer for LTSS, offering companies to an estimated 1.4 million enrollees in nursing amenities and 4.5 million enrollees in HCBS settings.
Federal Medicaid statutes require states to cowl nursing facility care and residential well being, however protection of different LTSS is optionally available. Most HCBS are supplied by way of “waivers,” which permit states to supply a variety of advantages and to decide on—and restrict—the quantity of people that obtain such companies. Not like different Medicaid companies, many states use ready lists when the variety of individuals in search of companies exceeds the variety of waiver slots out there. An estimated 0.7 million individuals have been on HCBS ready lists in most years between 2016 and 2023. Medicaid has traditionally spent more cash on LTSS in institutional settings than on LTSS delivered in house and community-based settings, however over the previous decade, Medicaid has spent extra on HCBS than institutional care because of states’ group integration obligations beneath the People with Disabilities Act and the Supreme Court docket’s Olmstead determination. In Olmstead, the Supreme Court docket held that the unjustified institutionalization of individuals with disabilities is illegitimate discrimination and violates the People with Disabilities Act. A serious problem for Medicaid HCBS is discovering sufficient staff, with employment ranges in aged care and nursing care amenities remaining under their pre-pandemic ranges.
Biden-Harris: The Biden-Harris Administration elevated federal financing for and oversight over Medicaid LTSS by way of elevated funding, new legislative proposals, and rulemaking. The Administration enacted ARPA in the course of the pandemic, which included a provision that briefly elevated the federal match fee for spending on Medicaid HCBS by 10 share factors to broaden entry to HCBS and assist direct care staff. The Biden-Harris Administration additionally issued legislative proposals calling for extra everlasting and in depth federal investments in Medicaid HCBS. The Biden-Harris Administration’s FY 2025 price range proposes additional HCBS funding, requires the reporting of HCBS high quality measures, and contains actions to additional enhance oversight of nursing amenities. The Administration additionally finalized a number of regulatory adjustments that may bolster Medicaid LTSS:
A number of guidelines aimed toward combatting discrimination on the premise of incapacity, which can present individuals with disabilities higher autonomy and independence whereas they obtain Medicaid LTSS;
Necessities for states to offer entry to Medicaid HCBS, which incorporates making certain fee charges are ample to assist a workforce, reporting necessities associated to ready lists and different high quality measures, and making certain that 80% of Medicaid funds for sure HCBS are spent on compensation for direct care staff; and
Institution of the primary ever necessities for minimal staffing ranges in nursing amenities with elevated transparency across the % of Medicaid funds for institutional LTSS which might be spent on workforce compensation and personal fairness possession of nursing amenities.
Trump and Republican Proposals: The Trump Administration budgets and different Republican proposals don’t embrace particular adjustments to Medicaid LTSS, however previous insurance policies and present proposals trace that companies for older adults could also be favored over individuals with disabilities who’re beneath age 65. The Trump Administration’s regulatory actions typically resulted in much less federal oversight over LTSS. The Trump Administration took actions to cut back federal oversight of Medicaid LTSS, together with issuing a proposed rule that may have diminished federal necessities for nursing amenities (however was by no means finalized), suspending routine inspections in nursing amenities in the course of the early months of the COVID-19 pandemic, and delaying necessities for states to adjust to federal guidelines surrounding HCBS (the “HCBS Settings rule).” When COVID-19 vaccines turned out there, the Trump Administration launched the Pharmacy Partnership for Lengthy-Time period Care Program to facilitate COVID-19 vaccinations in amenities the place residents are ages 65 and older, although these preliminary federal vaccine packages didn’t cowl settings that primarily serve individuals with disabilities beneath ages 65. Equally, the 2024 Republican Social gathering platform seeks to broaden in-home look after older adults, however doesn’t suggest related expansions for these with disabilities beneath age 65. It describes “shifting sources,” to assist new insurance policies to assist seniors stay of their houses however doesn’t particular what packages may be reduce to unencumber such sources. Challenge 2025 contains language that may enable states “flexibility to revamp eligibility, financing, and repair supply of long-term care to serve essentially the most weak and really needy and eradicate middle-income to upper-income Medicaid recipients,” which may embrace eliminating a number of the optionally available Medicaid eligibility pathways that provide protection to higher-income individuals who LTSS. Proposals that basically change the financing construction of Medicaid reminiscent of slicing or capping federal spending would probably end in restrictions to LTSS.
Tradeoffs: The Biden-Harris Administration Medicaid LTSS insurance policies may broaden entry to companies and enhance federal oversight of the standard of companies supplied however may enhance spending on LTSS and scale back states’ flexibility in administering the Medicaid LTSS advantages. The Biden-Harris Administration has persistently referred to as for legislative adjustments to offer extra funding for Medicaid LTSS (HCBS particularly).
In distinction, it’s tough to anticipate what particular proposals would emerge beneath a Trump Administration. The Trump Administration’s actions coupled with Republican proposals to eradicate the brand new nursing facility staffing requirements and prohibit the requirement that 80% of Medicaid funds for sure HCBS are spent on compensation for direct care staff recommend that there can be much less federal oversight of entry to and high quality of care, however extra flexibility for states in offering Medicaid LTSS. Republican proposals assist insurance policies specializing in long-term care and serving to seniors to stay of their houses however don’t point out a job for Medicaid or house look after individuals beneath age 65, and almost two thirds of people that use Medicaid HCBS are beneath age 65.
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Managed Care
Context: States design and administer their very own Medicaid packages inside federal guidelines and decide how they’ll ship and pay for look after Medicaid enrollees. Managed care is the dominant supply system for Medicaid enrollees, with nearly three-quarters of Medicaid beneficiaries enrolled in complete managed care organizations (MCOs), accounting for about 52% of whole Medicaid spending (or greater than $415 billion) in FY 2022. State managed care contracts fluctuate broadly, within the populations required to enroll, the companies lined (or “carved in”), and the high quality and efficiency incentives and penalties employed. Whereas there are federal and state necessities for managed care plans, plans have flexibility in sure areas, together with in setting supplier fee charges.
Managed care plans are at monetary danger for the companies lined beneath their contracts and obtain a per member per 30 days “capitation” fee for these companies. To restrict the quantity that plans can spend on administration and hold as revenue, CMS requires states to develop capitation charges for Medicaid to realize a medical loss ratio (MLR) of no less than 85%. The MLR displays the proportion of whole capitation funds obtained by an MCO spent on medical companies and high quality enchancment, the place the rest goes to administrative prices and revenue. Whereas there isn’t a federal requirement for Medicaid plans to pay remittances to the state in the event that they fail to fulfill the MLR normal, states have discretion to require remittances.
Biden-Harris: The Biden-Harris Administration launched ultimate Medicaid managed care laws in 2024 aimed toward enhancing entry to care, high quality, well being outcomes, and well being fairness. The brand new guidelines set up nationwide most wait time requirements for sure appointments and a requirement for states to conduct unbiased secret shopper surveys to validate MCO compliance with wait time requirements. The Biden-Harris Administration additionally finalized guidelines associated to plan prior authorizations targeted on streamlining course of, lowering approval wait occasions, and enhancing transparency. The Biden-Harris Administration has taken motion to enhance Medicaid managed care monitoring, oversight, and transparency, releasing reporting templates and toolkits for states and publicly posting state managed care annual experiences.
The Biden-Harris Administration enacted the 2024 Consolidated Appropriations Act, which included a monetary incentive to encourage sure states to gather remittances from Medicaid MCOs that don’t meet minimal MLR necessities. The Biden-Harris Administration’s FY 2024 and 2025 budgets went additional proposing to require Medicaid managed care plans to fulfill an 85% minimal MLR and to require states to gather remittances if plans fail to fulfill the minimal MLR. The latest price range additionally included provisions aimed toward strengthening CMS’s Medicaid managed care monetary oversight and compliance instruments.
Trump and Republican Proposals: Throughout his presidency, Trump took administrative motion to alter Medicaid managed care guidelines, together with enjoyable guidelines round community adequacy and beneficiary protections. Trump’s FY 2020 price range proposed adjustments to the Medicaid managed care waiver course of (e.g., to elongate the period of sure managed care waivers) aimed toward lowering administrative burden. Challenge 2025 notes the intent to reform and enhance oversight of Medicaid managed care however doesn’t present specifics. Proposals that basically change the financing construction of Medicaid would probably even have implications for the supply of care in Medicaid, impacting managed care plans.
Tradeoffs: Current Democratic administrations have made sweeping adjustments to Medicaid managed care guidelines and laws to advance program objectives associated to entry to care, high quality, fiscal and program integrity, beneficiary protections and assist, and monitoring and oversight. Nevertheless, establishing nationwide requirements and different state necessities can add state administrative burdens to come back into compliance. The Biden-Harris Administration’s most up-to-date price range proposed requiring Medicaid managed care plans to fulfill a minimal MLR of 85% (the statutory requirement for Medicare Benefit plans) and requiring states to gather remittances from plans in the event that they fail to fulfill the required minimal (which might probably end in Medicaid financial savings)—to encourage plan funding in companies and high quality enchancment and to stop the retention of extreme income.
The Trump Administration finalized adjustments to Medicaid managed care guidelines with chief objectives that differed from Democratic administrations. The Trump Administration’s acknowledged objectives included lowering state and federal administrative burden, streamlining laws, and selling state flexibility and innovation in care supply; nevertheless, tradeoffs may embrace fewer beneficiary protections, much less oversight involving entry to care, and variation in oversight throughout states.
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