Physicians push for full Medicaid expansion after HHS all-or-nothing stance

Washington Physicians in states that had sought partial expansions of their Medicaid programs under the Affordable Care Act are hoping that full expansion is still a possibility after the recent release of federal guidance that effectively rules out that first option.

The guidance clarified that states cannot receive federal assistance to pay for all of the costs of the first three years of expansion under the ACA unless they expand eligibility to everyone up to 133% of the federal poverty level (an effective rate of 138%). The guidance noted that states can pursue partial expansions to a point lower than 138%, but only through a special waiver and only at current federal matching rates, which are significantly lower.

Indiana was one of several states that had queried the Dept. of Health and Human Services about the possibility of a tailored expansion. The state submitted a waiver to use its Healthy Indiana Plan as the vehicle for a partial Medicaid expansion. The HIP program places an emphasis on cost-sharing and preventive care, and it covers low-income uninsured individuals who don’t have access to employer-based coverage.

HIP differs from Medicaid in that it only covers adults and caps the number of enrollees, said Risheet Patel, MD, president of the Indiana Academy of Family Physicians. If the proposal had been approved, fewer people would have been covered in the long term, but it may have been a less costly scenario for the state, he said.

Now that partial expansions are off the table, the academy hopes that Indiana chooses to expand Medicaid fully, Dr. Patel said. Gov. Mitch Daniels, a Republican whose term ends in January 2013, has said he is leaving any ACA decisions to the next governor and Legislature.

Family physician Richard Madden, MD, practices in New Mexico, another state that had inquired about expanding Medicaid eligibility just up to 100% of poverty. The state has the second-highest rate of uninsured in the country, said Dr. Madden, who is on the board of directors of the American Academy of Family Physicians. At least 150,000 additional people would obtain coverage if the state covered individuals to 138% of poverty through Medicaid. “It’s really clear to me it that this would be extremely important for the welfare of our state and would probably improve all kinds of things, more jobs for health care workers, as well as people being healthier,” he said.

Working in the small town of Belen, N.M., Dr. Madden said he sees patients without insurance or those transitioning out of insurance because they’ve lost their jobs. “Some have pretty serious chronic diseases that shouldn’t go untreated.” These are the people who would benefit the most from the expansion, he said.

For now, it’s clear that New Mexico won’t be granted its request. “A state must go to 138% or nothing,” said Matt Kennicott, communications director with the New Mexico Human Services Dept. He said his state has additional questions for the federal government that were not answered by this latest guidance.

It’s possible that the edict against partial expansions could deter some states from expanding Medicaid at all, and that’s a concern, said Bruce Siegel, MD, MPH, president and chief executive officer of the National Assn. of Public Hospitals and Health Systems. NAPH has warned that even in states that decide not to expand Medicaid, disproportionate share hospital payments will start to decline under a provision of the ACA that assumes coverage expansions will lead to fewer people unable to pay their hospital bills. The result of this scenario would be that the rates of uninsured would stay high and hospitals would face higher uncompensated care costs.

NAPH plans to encourage CMS “to work closely with states to ease their transition to a full expansion or to explore alternatives — perhaps through the waiver process — to ensure the broadest coverage possible,” Dr. Siegel said.

States decry inflexible stance

Some states continue to question the merit of any expansion, however, citing budget concerns and a perceived lack of flexibility on the federal government’s part for the states to tailor their eligibility levels.

This process involves the blanket expansion of an outdated entitlement program, said Bruce Greenstein, secretary of the Louisiana Dept. of Health and Hospitals, during a Dec. 13 hearing of the House Energy and Commerce health subcommittee. Medicaid first needs substantial reform to improve health outcomes and lower costs. “Having a Medicaid card does not necessarily translate into better health,” he told the House panel.

Gary Alexander, Pennsylvania’s public welfare secretary, said the Obama administration’s rigid stance on partial expansions showed a lack of interest by the White House in working with states on innovative solutions. Even with the enhanced federal matching rates under a full expansion, Pennsylvania would incur a projected $964 million in costs over the first three years. In years to follow, as the federal share of the expansion costs drops to 90%, “we estimate a cost of $883 million by state fiscal year 2020-21 as a consequence,” he said. States also expect to take on additional costs when federal funds used to finance the ACA’s temporary Medicaid pay increase to primary care doctors expires after two years, he added.

As a result of these factors, Pennsylvania will hold off on expansion until it’s given the flexibility to develop a program that’s both cost effective and affordable, Alexander said.

But amid the largely partisan backlash to the guidance, one Republican governor decided it was in his state’s best interest to follow the law’s provisions. In a move applauded by the state’s medical society, Nevada Gov. Brian Sandoval on Dec. 11 announced that his state would expand Medicaid fully, covering 78,000 additional people in 2014. “My decision to opt in assists the neediest Nevadans and helps some avoid paying a health care tax penalty. As part of my proposal, I will also call upon the Legislature to pass Medicaid patient responsibility cost-sharing measures,” he said in a statement.

The announcement was “a politically courageous step” by the governor, said Larry Matheis, executive director of the Nevada State Medical Assn. The decision ensures that there won’t be newly eligible state populations under the ACA that will remain uninsured in 2014, he said. The association has pledged to work with the governor, his staff and the Legislature to improve the state’s Medicaid program further.

Sandoval, the first GOP governor to announce that he would expand Medicaid, said he might alter his decision “if there is any sign of change at the state or federal level” during the upcoming legislative sessions.