The Future of Health Insurance: Medicaid Moving Forward

PLEASE NOTE: This is an unedited transcript. Please refer to the video of this event to confirm exact quotes.

MARILYN SERAFINI: So, welcome back. We are now going to take a deeper dig into Medicaid. With the failure to pass the bill in Congress, some states are looking to expand Medicaid, some additional states. Many states are talking to CMS about what might be possible in the way of – they’re talking about waivers, what can be done. And so today we’re going to talk about – our goal for this panel is to both talk about where we are going into this next year, so where we are, what the ACA did, where we are with Medicaid, what’s under discussion, and we’re going to talk about the considerations and possible implications moving forward.

We are lucky to have with us today three exceptional panelists. You’ll notice there is one empty seat, and that seat belongs to Trish Riley of NASHP. Unfortunately, because of the crazy weather we have in D.C., Trisha’s not going to be able to get into town, and so she will not be with us. But fear not, our three other panelists here watch what’s happening in the states very closely and will be able to give us a full picture of what’s happening.

So first, to my left, we have Diane Rowland. She is Executive Vice President of the Kaiser Family Foundation. Diane was also the inaugural chair of MACPAC, which advises Congress on Medicaid policy. To her left is Josh Archambault. He is Senior Fellow for the Foundation for Government Accountability. Josh spent some time here in D.C. with the Heritage Foundation and he’s up in Massachusetts where he also worked for former Governor Mitt Romney. And, at the end of the panel, we have Judith Solomon. Judy is Vice President for Health Policy at the Center on Budget and Policy Priorities. I won’t go into further detail. You have their full bios in your packet.

What I’d like to start off doing is I’d like to ask Diane if you would please help everyone in the room to understand what’s our starting point here? What happened with what was created by the ACA and just where are we? What is our starting?

DIANE ROWLAND: Well, we spent much of the last few years talking about Medicaid in a very narrow way. We’ve been talking primarily because of the Affordable Care Act about Medicaid’s role as an expansion program to cover additional adults who are very low income but who didn’t previously qualify for the program. And I think, to remind you, that goes back, really, to the history of Medicaid, enacted in 1965, as the program that was intended to provide coverage, at that time, to the welfare population, since expanded tremendously. But in that era, the deserving poor were considered the aged, blind, and disabled, children, and adults with dependent children, initially just single adults with dependent children. And as we’ve seen over time, we’ve expanded the role of Medicaid to be more of an insurer for many children, help with long term services and supports for the elderly and the disabled as well as children with special health needs. But states were unable to obtain the federal matching funds if they wanted to afford coverage to adults without dependent children because they were not one of the categories of Medicaid. And what the Affordable Care Act did was to say eligibility should no longer be based on whether or not you fit a category, but instead, should be based on whether or not you are truly low income and defined that as 138% of the federal poverty level, or about $23,000 for a family of three. So the big change in the Affordable Care Act was to really reframe Medicaid as a program for low income individuals that would provide health insurance and healthcare. And they intended to build on the mandate that was already in place in the Medicaid statute of covering all children up to 100% of poverty, and for younger children 138%, by extending that to adults which would have raised eligibility for the parents of many of the children who were well below the poverty level in terms of their state coverage, and also to try and provide for a national standard of how many low income people would be covered. Obviously, when the Supreme Court weighed in, it weighed in to say that that should be, for adult coverage, a state option rather than a requirement even though initially the federal funding was 100%.

And so, I think much of the discussion is about which states are going to expand, which states did expand, what was the impact of the expansion, who did it really cover, what kind of individuals were covered by this expansion and we know that, in the 32 states, it expanded some 11 million individuals became really eligible for coverage. But when we look at where the debate is going today, it’s not just stopping at what should we do about the expansion population, but instead, in the GOP House Bill that we just saw brought to the committees and then possibly some day to the floor, it’s now taking on the entire Medicaid program, and I want to remind everyone here that Medicaid is a far bigger program than the expansion. It is our largest health insurance program that takes care of some 74 million Americans including many of the 20% who are Medicare beneficiaries, who need Medicaid to help supplement Medicare, as well as to provide for long term services and supports. It takes care of many of the mental health and other challenges. It’s been one of the front line programs today on the opioid addiction program, and it has been structured over time to provide states with the ability to draw down federal matching funds to cover the population that they are covering, as long as they abide by some basic federal rules about who they can cover, what they can cover, but a lot of built in optional services and optional coverage. So the proposals to change that open-ended federal financing to some sort of a per capita cap have been introduced over time. The federal government seems, periodically, to like to say we’ll give states more flexibility in return for being able to limit the federal government’s commitment to this program. And that was part of the other debate that was going on around the GOP House proposals. So we have two issues here: what happens to the expansion and the expansion population, and then, what happens to the broader Medicaid program and its role as our health safety.

MARILYN SERAFINI: So let’s take that one at a time, those two pieces. One is the broader conversation of do we move to a per capita cap, or do we move to a block grant; what do we do in the long term, if anything? But first let’s talk about the more immediate question. Is, without that broader conversation, we are, here and now, looking at some states thinking about waivers, some states deciding now whether or not they are going to join the expansion, and so I’d like to ask all of our panelists where are we now and what are we likely to see happen? Why don’t we start with Josh on that one, and then others can weigh in.

JOSH ARCHAMBAULT: Sure. So thank you so much for having me this morning. First, I would say, with the new Administration, from a state perspective, it’s a whole new world when it comes to what they ask for flexibility for. So we have been involved in a number of conversations and heard from a number of governors and Medicaid offices that they are thinking very differently than they have in the past about what they’re going to ask for for flexibility from the federal government. That’s certainly, we can unpack that a little bit as we go, but there is a big discussion about planned designs and how you set up these programs outside of the financing.

The second question on Medicaid expansion, you know, we have seen already a couple states look at expanding. Kansas, being the most recent one. That is a multi-year campaign by hospitals and insurers in the state to find candidates who are more sympathetic to that, so that should not be viewed in isolation. What I think ultimately it comes down to is if the House Bill moves. If the House Bill moves as it is currently structured, and the Senate makes tweaks but it largely stays the same, I actually don’t – well, first of all the first manager’s amendment restricted new states from expanding. So that would kind of end that conversation if it became law. But then, we move to that bigger question about financing so the expansion debate, I think, is active in a couple states at the moment, not as active in others, because they’re still just waiting to see will this House Bill actually move as its currently conceived or how much will that change.

JUDITH SOLOMON: And also, thanks for having me. I don’t know, just to step back a little bit on waivers because I think, you know, we go full steam into that conversation without really thinking about what they are and what they’re supposed to do in the Medicaid program. And if we think about Medicaid, it has numerous options that don’t require a waiver. It is a very flexible program. And waivers are really on top of that, to give some additional things states can do, but what they really are is saying, you know, we have a Medicaid statute that was passed by Congress and amended over the years, and in some cases, if a state wants to try something and wants to try something that is going to pursue the objectives of the statute, which is essentially to provide healthcare to low income and vulnerable people in this country, then we’ll let you try that and we’ll let you try it for a limited period of time and we’ll look at it and we’ll test it. And so, if we start there, then I think it’s a good framework for thinking about some of the things that are coming up, as Josh said. A lot of new things are coming up, things that have never been allowed and things that have never been tried. And among those things are work requirements, and we can get into sort of the details of why we believe very strongly that these are a bad idea for Medicaid and the rejection of them in the past has been right. There’s really no evidence base. But even things like, you know, premiums where the Medicaid statute says, we have low income people we’re covering here that can’t afford to pay premiums, so you shouldn’t charge them premiums, so giving a waiver when we know and we’ve tried this in other situations and we’ve actually seen that waivers keep people from participating in the program.

So if you go back to really the beginning and when the ACA was passed, as Diane described, why we have the expansion, it was to have a continuum of health options for, you know, low income people, particularly working people in jobs that didn’t provide healthcare. And to say now we’re going to do something that we know will decrease participation I think is not really consistent with the purposes of the waivers, and I think it’s just really always important to think about these as demonstration projects and that they are supposed to pursue the objectives of the program.

DIANE ROWLAND: You know, I think it’s really interesting that sometimes waivers proceed legislation and that certainly is the case with the Affordable Care Act expansion because prior to that, 11 states have come in for waivers saying, “Can’t we please cover some of these adults without dependent children, many of them have a lot of disabilities but they don’t yet need the disability threshold for coverage,” and so it was really a series of demonstrations that led to the argument that maybe extending coverage through the legislation would be possible. And I think that is generally one of the purposes of the waivers, both to see if states can test new methods, but to see if those methods are things that ought to be made available more broadly, maybe through legislative change or at least through broader adoption by the states.

JUDITH SOLOMON: And the Family Planning waivers are even, I think, a really good example of that where states were allowed to provide family planning services to adults that weren’t otherwise eligible for the program and that was shown to prevent pregnancies that were not desired at the time and also that was in the statue. So that’s the kind of approaches and that requires rigorous evaluation.

JOSH ARCHAMBAULT: Perhaps I could offer a slightly different perspective here on waivers. In our experience, regardless of the political stripes of a state, you can find a blue state Medicaid director that will gripe, at least privately, about the whole waiver process for a variety of reasons. And it is important to realize that there are a couple different ways states can get flexibility, whether it’s a state planned amendment, which is usually a shorter process and kind of rules around that, or the 1115 waiver process, which usually is the bigger Medicaid waivers. But what is not told about the flexibility is usually it takes – the average is well over a year for approval for those sorts of waivers, so if I’m a Medicaid director and I’m at the state level and I have to balance my budget every year, unlike Congress, I know, but at the state level I have to balance my budget and it takes me a year to get a yes or a no on whether I can do something dramatically different? That’s not flexibility from their standpoint. The other thing is, I have to go to D.C. to ask if I can do something yes or no, when I’m funding the – at least partially funding the program.

DIANE ROWLAND: But not fully.

JOSH ARCHAMBAUILT: It depends on the state, but again, this is a state-federal partnership. So I’m just – I want to reflect that there’s a lot of frustration at the state level with how this process has played out over the years, and the fact that they simply have to come. And you have states, and why probably more Republican governors are interested in a block grant conversation, for instance, is just to say, look, let me wash my hands of this whole process. Let me determine how I want to do it. If it means I have to put more state dollars on the table, I’ll consider it, because at least I can design the program that I want to design for my low income residents and cover the populations that I want to cover. So I know there’s a big federalism discussion here happening, and we’re bouncing around the funding piece of this because that largely drives this conversation, but I do want it to be heard that a lot of people at the state level don’t think it’s actually that flexible of a process. Even though they can ask for a lot, it just takes a long time.

JUDITH SOLOMON: Well, the waiver process is different from the process for asking – for not even having to ask – for indicating which options you want to adopt in the Medicaid program and there’s multiple options in terms of the benefits that are provided. What kinds of – how you want to design your delivery systems. Well, we’re talking about these waivers that take time and have to be requested, it’s because you’re asking to change the law, essentially. You’re asking for permission to do something that is different than what the law allows, and it would be pretty untoward if we were going to say that, you know, states could just do that and not have to come to Washington or write to Washington and just do it. We want to protect the people that are the intended beneficiaries of these programs, and these are really important protections around premiums, cost sharing, continuous coverage—all of that—who’s covered, how long they’re covered. And I don’t think anyone should apologize for the fact that permission needs to be requested.

MARILYN SERAFINI: Let’s take a half step back now and talk about flexibility and how much flexibility already exists. What can states do currently, and well, let’s start there. How flexible is the program to begin with at the baseline?

DIANE ROWLAND: Well, one of the most stressful areas of the program is really what can be done for home and community based services and for a lot of the services to the elderly and the disabled. I mean, you can get special – it’s a waiver, it’s on 1115, to be able to cover children with special needs for whom private insurance is not sufficient to help cover those children. A lot of states have liked to use waivers in that case because they can limit the population, they can have slots for how many community-based services, and not have to open it statewide. So that’s, I think, an area that it’s very important to really only requirements for the elderly and the disabled for benefits or more nursing home care and states have really broadly used their ability for optional services and for some waivers to expand what they can do around keeping people in the community, rebalancing long term services and support.

MARILYN SERAFINI: Give us an idea of how widely waivers are currently used. If I’m not mistaken, every state has them.

DIANE ROWLAND: Every state has multiple waivers.

JUDITH SOLOMON: Certainly for the home and community based services, multiple waivers targeted at different populations, and the reason is there are waivers is because basically, as Diane said, nursing home care is a required service in Medicaid, providing services in the home, which is more advantageous, more desired by people that now is more than half of long term services and support is basically optional and what the waivers do is allow states to design packages of services that are specifically targeted to the population. So they may have, you know, waivers for people with intellectual disabilities, seniors, children with special needs, different packages of services, some of things that are not normally covered by Medicaid such as respite care. There’s a lot of flexibility there. There’s a lot of flexibility in how you provide services whether it is managed care, different forms of managed care. We’re now seeing things like a kind of a accountable care organizations similar to what Medicare is doing. So all of those things, and a tremendous amount of innovation that has taken place over the last years, and a lot of that has been facilitated by states being able to get some up front federal dollars to allow them to improve their delivery system, set up better means of coordinating across providers, integration of behavioral and mental health services—all of that improving delivery for people with substance use disorders. That’s what’s going on and that is what would be at risk if the federal matching system is changed to a capped funding stream because then we’d be down to just paying for doctors and hospitals.

MARILYN SERAFINI: So, Josh, what is it that some Republican governors are looking for to do with waivers moving forward now?

JOSH ARCHAMBAULT: So I think this gets at a bigger issue about Medicaid is, is it health insurance or is it a welfare program? And depending on how you answer that question, it’s how you think about how you design it. And so you have a lot of Republican governors, in particular, although you have some Democrats—the governor in West Virginia comes to mind—where they look at it a little bit more like a welfare entitlement program. So if you’re going to follow that logic then things like work requirements, time limits, become things that you want to look at for certain populations on Medicaid. So I think there’s actually a decent amount of research on other welfare programs showing that, for certain populations, it’s tremendously beneficial. Food stamps, in particular, for everybody, the adults without dependents, and we’ve done some great research on that. But if you view it more like health insurance, then you’re going to want it to look a little bit more like health insurance, so this discussion about plan design, deductibles, premiums, co-pays that, when you show up to the Emergency Room and it’s not an emergency you have some financial skin in the game. And then, when it comes to the actual benefits that are mandated, there are a lot of states—just to give one micro example—non emergency medical transport, tremendously expensive. Non emergency medical transport. So do states have flexibility in how they set that up? Could they work with Uber or Lift? Could they say, for certain things, you know what, you live near a bus route, you’ve got to take the bus unfortunately, or you’ve got to take the subway. But there’s not a lot of flexibility in how states imagine around those. The authority is quite wide, but for the Obama Administration, in particular, and really the bigger problem, and I’m not trying to knock the Obama Administration, it’s what’s the interpretation at CMS, at that moment for what you can do? And that’s, I think, the bigger criticism. But I do think Republican governors are thinking a little bit wider, a little bit broader than they have in the past. They’re seeing a political window here to ask for things. I know the CMS folks, there now, have been welcoming that. They’ve sent out letters saying we’d like to grant additional state flexibility, come to us with your ideas. We’ll just have to wait and see how flexible they are or whether they end up putting a lot of stipulations. And I should mention, waivers are temporary, and perhaps some see that as a good thing, but perhaps others see it as a bad thing because political winds change in D.C., and so, oh! I object to that for ideological reasons. Take it off. You don’t get it anymore on your next waiver request. If it’s proven to work, then I think we’d want it to continue, not be ideologically driven. So I think those are the sorts of conversations that we’re hearing in state capitols and you’ve already started to see. Kentucky already has a waiver in, it involves work requirements for their expansion population. Arizona is about to put in one, it has time limits and work requirements. Maine and Kansas are working on waiver requests. They’re going to come in with a bunch of different new things. So I think very shortly we’re going to actually start to see those details flushed out in actual waiver requests.

DIANE ROWLAND: But those are all about a very narrow part of the role Medicaid plays. I mean, that’s about adults. It’s not about children and it’s not about the aged, blind, and disabled who really are where the bulk of the dollars in Medicaid are spent. Where I think most of the innovation needs to be, how to better deliver services to those high need populations rather than trying to focus on looking at just this narrow slice and saying this is what the whole program is about. And certainly, the issues that we were raising around home and community based services and all of those kinds of innovations are ones that we want and we see that. I’m going to channel Trish, who’s not here, we see a lot of innovation going on in the payment and delivery and organization of care, and I think everyone’s always poised that the states are backward because they don’t have enough doctors seeing patients, yet we’ve seen them move tremendously into managed care, into better quality measures now around some of that managed care services, and to trying to do better coordination across the board. So I think that’s where the promising future of Medicaid is and, you know, we can look at who could work and isn’t working. When we tried to look at the expansion population, the majority of them were working. They were just working in such low wage jobs that they didn’t have health insurance and/or they were ill and couldn’t work. And I think we really need to look more at, you know, how broadly – if work requirements are put into effect, how broadly would they actually apply to that huge population that now depends on Medicaid.

JUDITH SOLOMON: And how much money would we spend administering that? Because even if we sort of leave out our, you know, ideological difference here, I think we should be able to agree that spending huge amounts of money—the Kentucky waiver’s a great example. So three months you don’t have a work requirement and then, at three months, you have to work, I think it’s, you know, five hours a week or three hours a week, and it keeps going up each month. And certain kinds of activities count and certain kinds don’t, and that’s going to have to be monitored. That’s going to have to be sort of interacting with people. Why didn’t you work? Was it because of child care? All of that, not really good use of funds, same thing for a lot of these very complicated systems of accounts. You know, they say they’re HSA’s but they’re not because the government funds them and, you know, and then there’s supposed to be incentives, if you can roll over part of the money. But what we see very clearly, in several states that have used these, is that they’re not understood. So if you don’t understand you have this account and you can use some of the money later for something else, it’s not an incentive to do anything because it really is hard to explain to people exactly how these things work. They’re extremely complicated. Yes, we have vendor contracts, big vendor contracts, administering these accounts and, you know, pan out and making sure that people are not being charged more than the law requires, monitoring whether they’re making the payments. So, I mean, I think it really is sort of narrowly focusing on a small part of the population for purposes that are not really consistent with what Medicaid’s supposed to do, and taking away from the ability to innovate and spend time on really improving the delivery of care and the quality and outcomes.

DIANE ROWLAND: But I think Josh is really pointing out where we do have a big philosophical debate going on, especially with the adult population, of whether this is a welfare program or whether it’s a health program. Obviously many of us see Medicaid’s roots as being based in welfare, but having evolved more and more to be the healthcare program for the low income population. And ironically, the place where it’s still closer to welfare is for the aged, blind, and disabled where there’s mandatory coverage of the SSI population which does have work disincentives built into it. But I think that is the debate that’s going on: what should we be doing? And I think I look at it as saying let’s try to figure out, in the continuum, of how to give the American population affordable healthcare and how does this program fit with the next layer up of tax credits or what we’re doing. And so I think that’s an important part of why I see it as a healthcare debate rather than a welfare debate, but I do understand some of the concerns that have come up in the state legislatures around the country. This is not an issue that Josh has made up. It’s an issue that’s very real for many of the governors and legislators.

JOSH ARCHAMBAULT: And I would just say, you know, a couple of points here on work requirements. This is an 80/20 issue. Eighty percent of the public supports it for able bodied adults. So regardless of how your own personal feeling is, there’s political wind behind this. And I think one of the questions for us to ask is: if states want to do this, what is actually the administrative left? Many of these states already have experience in TANF and SNAP following compliance. So it’s actually not that big of a lift for them to do that. But really the issue is: do we want folks to move off of Medicaid? Is that a goal? Is that success or is it how many people are on the program is the goal? And you’re going to get different answers in different states on that. And for those that say no, one of the outcomes we want to track is how many people get back into the labor force, you know, the best way to get somebody back in the labor force is? Encourage them to work, or volunteer, or get education. That’s one of the lessons that we have learned from welfare reform over the years is that folks can work their way off the boat. That they’re able. I’m not saying it should apply to everybody. I don’t want anybody to think I’m saying kids should have a work requirement or something like that. But for the populations that are – and in the expansion population in Ohio, 60% report no income in the expansion population. Shouldn’t we look a little closer? Do we want them to remain on Medicaid? I don’t think so. I think we ultimately want them on a tax credit or on employer-based insurance. So how do we wire our program to point in that direction for the populations that should? But, your point is right. This is one subset of the Medicaid population so there’s another discussion to be had. CHIP reauthorization is coming up this year. There are a lot of governors who would be interested in trying to move I think women or kids off of the program. It’s a little bit crazy to them that you have families on a private insurance but their kids are on Medicaid. Why wouldn’t you have them on the same plan? So those sorts of discussions of being able to move people off or kids, in particular, off, even though they’re relatively cheap to cover, but at least you get a little bit more of a handle on your program. Long term care services, nursing home services—this is probably when you go into a Medicaid agency, the area where they want to bang their head against the wall. There have been some innovations around trying to get people out of nursing homes into home based care, but ultimately, what is the fundamental problem? We don’t have a robust private long term care insurance market. This has become the default. And so you have all of these, this whole industry—many of you in the room probably know this—of lawyers and other financial planners that basically help families take advantage of the system. Is that what we want ultimately? It’s costing us a fortune. And so should we be thinking differently about this? What do we need to change about Medicaid so that we actually do have a robust insurance program for people who end up needing this end-of-life care, which is so important and so expansive, but we have to crack that nut and we haven’t gotten there yet, and I don’t hear a ton of conversation about it, and the ACA’s attempt was shut down right away because it was ill conceived. But what else can we try? What are other alternatives?

MARILYN SERAFINI: So we clearly have eased into the discussion of what is the purpose of Medicaid? So we’re looking a little longer term now, and so Josh, you raised the question of long term services and support, and I’d love to hear from one of you what some of the facts are about numbers and costs for people with LTSS and, clearly, the Affordable Care Act did pass the Class Act, which was supposed to be a self sustaining program that was eventually killed after passage because it was determined that it would not be self sustaining. So let’s talk just a little bit about some of the other purposes, whether we’re talking about it being insurance or a welfare program. We have groups like the long term care group. Is it a high risk pool? Is it a safety net? What about population health?

DIANE ROWLAND: Well, certainly the long term care debate has gone on for as long as I’ve been, it’s a long time trying to do healthcare policy, and we’ve had commission after commission try and figure out what an alternative is. We’ve had demonstrations and investment in trying to develop the private long term care market, which has never really developed. We’ve tried partnerships between Medicaid and private long term care insurance. And I think part of the problem is just that it’s a very hard market to create a risk pool in and people, in public opinion polling, think that Medicare is going to cover those services when they need them so they’re not exactly investing in those kinds of plans, though there has been some broken them over time, but they’re mostly related to nursing home care, not to care in the community which is the preferred care. And then we have, in Medicaid, that you have to spend down to get onto the program and we do have issues over time to try to tighten on the asset rules but basically, as a country, we’re failing in having a comprehensive public-private partnership that provides for long term services and supports and so I think we keep ending up with Medicaid as the default, but for those who need those services, it’s a very important default. But I personally am concerned that, as we see, and we’ve been talking about the Baby Boomers aging forever, and now they really are, and it’s time to really try and say how do we provide that continuum of care so that the Alzheimer’s population and those with really severe needs who could be, I think, many could be maintained in the community, but people in the community need some support to do that. And we’re a very different society now with so many people working that there’s no one at home to take care of some of the frail elders. So, it’s a policy dilemma still to be solved in my mind.

JUDITH SOLOMON: I think, in some ways, it’s where the biggest threat of a change in the financing structure hits, for a couple reasons. First, that Baby Boomer aging, if you think about how you would structure a capped funding system, whether a block grant or per capita cap, you’re going to do it based on spending now and spending now is a population of seniors that tends on the younger side. So they’re not – and if you set your cap based on that younger old, you know, 10 years from now, 15 years from now, when you have a lot more 85- and 90-year-olds it’s going to fall short for that. I think the trend to provide – the second part is the trend to providing more care in the community, and this is not just for seniors. This is also very important, the role for people with disabilities, including, you know, physical disabilities, but also intellectual disabilities where a lot of the home and community based services are provided. Because states don’t have to provide these services, they’re optional, and it’s only the nursing home services that are optional, if you move to a capped funding system, you could see diminishment of the home and community based services, and leading to families to have to figure out what to do. And the other thing that I think is worth mentioning, it’s a little bit unrelated, but that I’ve been struck by, is the fact that, you know, we talk about that there is a coming together of these populations, the adults, and that there are a large share of caregivers of the people in home and community based services, that are actually covered by Medicaid. And whether it’s the families that have to stay at home to take care of their loved ones, or workers in home care that don’t have an offer of healthcare. So I think all of these threads, if you sort of begin to look at it, it is woven together and, you know, I think in that New York Times article that was so great on Medicaid sort of coming of age, they talk about it being part of the fabric, and I think that’s where, for me, it really is. When you put all the pieces together and see the multiple roles that it plays, and how, if you pull out one of those threads you’re going to have some unforeseen consequences.

JOSH ARCHAMBAULT: But if I could just speak from a state budget perspective, this is Pac-Manning state budgets whether you expand it or not. So the issue about how much money you have and how much you’re spending is now hitting education, is now hitting roads, is now hitting public safety because you go to a state like Massachusetts, where I live, it’s over 40% of our state budget. That’s a ton of money. And so the question, then, becomes are you getting value for every dollar that you’re spending? We’ve been talking about long term care and services—really important. That’s why so many people, well, maybe at the state level, at least, were scratching their head when the ACA came out in saying, so wait a second, we’re struggling to afford long term care and services, we have waiting lists in our state for disabled kids and others for home and community based services, and now we’re going to prioritize more federal dollars towards the able bodied adults without dependents, some of them who have employer based insurance. Why? So that’s part of the opposition in some of these states that hasn’t expanded. The media almost never tells that story, but if you talk to some state legislators that’s their awareness. And so, for them, even though they only have to pay 10% of the expansion population, that’s a ton of money when you have to balance your budget, and they’re seeing and making these tradeoffs every day that are heartbreaking. I mean, Skylar in Arkansas. A 13-year-old little disabled girl. She can’t speak. She’s in a wheelchair on a wait list for home and community based services. She’s number 600. Do you know what she is now after expansion? 700. Because they’ve had to prioritize all this money for this able bodied population. I’m not saying we don’t want to make sure that folks get coverage, but how you do it and the value you get for every dollar that you’re spending should be the conversation and just giving somebody a plastic card is not access. So we need to be a little bit more nuanced in what is our goal? Is it getting people off the program, is it getting them on? Is it getting them access, or is it getting them an insurance card?

JUDITH SOLOMON: Josh, there’s no connection between expansion and waiting lists for home and community based services, and you know that, and I think you actually admitted it at a hearing. Seriously, I mean, the states that have the biggest waiting lists are Texas and Florida that haven’t expanded.

JOSH ARCHAMBAULT: Because their Medicaid program is eating up their budget. And so I’m saying that whether it’s prioritizing, vying your wait list down, or whether it’s more money for classrooms or more money for any other public priority, there is a relationship.

DIANE ROWLAND: If they design their waivers to have a number of slots so they create the waiting list.

JOSH ARCHAMBAULT: But they’re put in that position to have to do it is my point.

DIANE ROWLAND: No, they’re not. They don’t have to – they don’t have to do the waiver.

JOSH ARCHAMBAULT: Or they have to take money from somewhere else to spend, that’s my point. Correct?

JUDITH SOLOMON: Fourteen states have no waiting lists, 10 have expanded. I mean, there really is no connection. It was given four Pinocchio’s in the Washington Post, so I think we should stop there.

DIANE ROWLAND: I think you’re correct in that there are decisions that states make every day about what to cover, how much to pay providers—

JOSH ARCHAMBAULT: Correct.

DIANE ROWLAND: —how much to do other services.

JOSH ARCHAMBAULT: And the expansion states cut provider rates. That’s how they try to afford it, it’s one of the things that they do, which is raises access issues. I’m just saying they’re connected. That’s my broader point, and for us to say there is no connection, I think, you have not spoken to state budget writers who have to make these tough decisions.

DIANE ROWLAND: Well, maybe you’re saying that the federal government should be putting more money into the program?

JOSH ARCHAMBAULT: Maybe I’m saying the federal government – that’s a policy discussion. But ultimately, I think, as a country, we also need to decide as a country with 20 trillion dollars in debt, ultimately, how do we prioritize research? And, look, this isn’t just me, okay, this isn’t just me, because you have Harvard Public School of Health professors writing in top journals saying: “Every healthcare dollar that is not delivering value for that individual is wasted and taken from some other public priority.” Kate Baker. So, this isn’t me, oh, I’m going around the state capitols, but we have to ask the value question. I don’t understand why people would object to that.

MARILYN SERAFINI: So it’s come to money. It was bound to come to money. So let’s talk about the tradeoffs because right now we’re in a place, right now, we didn’t have a big bill, we may in the future, so we’re talking about waivers, we’re talking about some states, some governors, trying to achieve what they’re saying is greater flexibility, and we’re talking about having a CMS that appears to be ready to talk to these particular governors, and what is the tradeoff between flexibility and potentially – you know, Josh, you had said that some of the states may be willing to take less federal money to gain the flexibility. So let’s talk about that tradeoff.

JUDITH SOLOMON: If we’re talking about money, I think, then we should look at where the money is, right? And I think some of the things that are being done now have been shown to show up, too, and they’re being done by blue states, red states, purple states, all states. And that is really focusing on the people with multiple kind of conditions and there are new options in the Affordable Care Act to do that and we’re seeing things, like in Missouri, their Healthcomp program, save money and have better outcomes. You know, we don’t disagree on looking for value for the dollar, but I think we do disagree on the fact that if we decide to change the structure of Medicaid and cut the federal funds, I don’t see how that helps the state budget issue. So I think around, you know, better services for people with substance use disorders, I think beginning to think more [Unintelligible], social determinants, looking at justice involved populations and a lot of things that can be done are on that value proposition and not only saving money in the Medicaid budget, but actually better coordinating other budgets. I think the [Unintelligible] spending in all of that, there’s a ton that can be done without arbitrary caps on the federal funds.

DIANE ROWLAND: I think the real place where there needs more work done, we have an opioid epidemic here. Medicaid is a place on the front lines that can help provide support for some of the counseling and treatment services and we’ve seen that that’s been an important part Governor Kasich noted in Ohio, that that was an important part of what he was able to do with the expansion funding. So I think we really need to focus on some of the things that Medicaid does that are uniquely different from what a standard private health insurance plan would do, and that really is around looking at much of the role the program plays in behavioral health and in trying to see how we can better provide those services because I think that has been one of the outstanding gaps in the entire way in which the delivery system has worked for some of the poorest and most disabled individuals with behavioral health challenges.

JOSH ARCHAMBAULT: I have many thoughts on this but I’m going to actually move in a slightly different direction. Let’s start with getting people off the program who don’t qualify. Illinois, in 2012, passed a bipartisan bill that ended up removing close to 350,000 individuals. Many of them were deceased, moved out of state, or had had a job change, never reported it. The point I’m getting at here on finance—

DIANE ROWLAND: There’s no argument there that if you’re not alive and eligible—

JOSH ARCHAMBAULT: Correct. Right, right. The concern – the concern is how many other states are doing this? I’ve known of two or three others that are starting to poke around on something like this. So there are a couple issues here. The first one is, states don’t really have a reason to do it. They lose a ton of federal money if they do it. So how about, in this discussion about getting the incentives right, they get to keep some of that money; that, if there is some sort of cap or whatever is conceived and comes from Washington, they actually now have the motivation to tackle waste, fraud, and abuse. And let me tell you, I think that this is the common sense stuff. If somebody moves, in a managed care world, which we pretty much are in Medicaid in most states, if you’re enrolled and you move across a state line you’re still eligible for Medicaid, you sign up for another Medicaid program, you’re now paying two managed care companies every month and the ACA says that you can’t check eligibility again for 12 months from when they first re-entered. Why? We’re just wasting money. There’s no way for a state – the federal databases that are set up for this are terrible. So we now have these situations where we’re just spending money out the door, and this gets at why a lot of Republicans, in particular, are saying: change the incentives because states will get really serious about these sorts of efforts. Illinois saved almost 400 million dollars. Pennsylvania did this under a previous Administration, they saved 160 million dollars in 10 months. You add that up across the whole country, it doesn’t solve the financing problem, but it certainly helps, and we can then have these conversations about where do we redirect that money, and that is why Republicans, in particular, are talking about putting something on a budget so states have the right incentives to tackle things like that.

MARILIYN SERAFINI: Let’s turn to some of your questions. Do we have a question in the audience? Okay, we have one up here in the front. Please identify yourself.

AUDIENCE MEMBER: Carl Poser, Health Policy Enlist and Disclosure. I have a client who is assisted living providers, I’ve been working for for a long time. Josh, your comment about waivers being temporary struck me since more than half of the spending for long term care is now home based or assisted living care. Are you proposing that that be made a permanent feature alongside nursing home care, or should it be? The second question is broader. If we’re going to have these block grants, are they going to be mandated benefits in that? People are talking as if the hospital care, the nursing home care would be mandated, or would states be able to choose, say, to keep home and community based and not have nursing home as a mandate? I mean, how flexible are they? Has it been written down?

JOSH ARCHAMBAULT: So your question is how flexible is the 1115 waiver authority, when it comes to—

AUDIENCE MEMBER: [Inaudible].

JOSH ARCHAMBAULT: Well, I think the discussion that I was hearing was actually about some carve outs, and so what ends up at the back end of being carved out from a per capital cap or a block grant structure makes a big difference to what you’re getting at, also the growth rate of funding. The first Manager’s Amendment had an increase for certain older populations so I think that would slightly – again, the funding would slightly influence the structure of how states would set those up.

My brief point about the timing is just that most waivers are three to five years and can be rescinded at any time, so there’s two sides of that coin. One argument is, if it’s not working it should stop and the federal government should rescind it. And I understand that, but this is not just a federal program. So, the other flip side is, well, if a state wants to do something for 10 years, or if five states have already been approved for a waiver, why does it take over a year to get approval for it too—not always, but often? You know, should there be an expedited process where if it’s already been approved and there’s been one evaluation and it’s shown some sort of positive outcome then it should be almost instantly approved without having to go through that process. That doesn’t directly get at what the nature of what you’re asking about but I do think it could apply to that population as well. There are examples where we know of individuals who, they’re on the wait list for home and community based services, the only way they could skip up the wait list is if they were institutionalized first, but that doesn’t make any sense. We don’t want that to happen, so we need to change some rules. We need to look at that. Also, community based services aren’t always cheaper. In Minnesota they switched and, by the way, there were families taking care of their own family members for free and now all of a sudden you’re paying them. So it’s not a silver bullet is my point, but I do think that there needs to be more discussion. I think, honestly, I mean, the Republicans, in general, have not given a lot of thought to long term care services. I’ll be blunt. And they need to spend more time thinking about it because, and maybe, Democratic governors haven’t either, but I do think that there needs to be some more effort and thought around that because there is so much money that’s spend, and that is needed. I mean, we want to make sure that people are taken care of at the end of life but how you deliver that is, as we’ve said, the real challenge.

DIANE ROWLAND: And the answer is that the devil is always in the details of what can be done and not done under a block grant. They sometimes have strings. The last discussion was only applying to children and adults as opposed to the elderly and the disabled. Even a per capita cap, what services are actually counted in the per capita cap so that how do you base it and where do you go forward. So lots of questions, always.

MARILYN SERAFINI: Another question? We have one, right here.

AUDIENCE MEMBER: Kim Czubaruk with the American Academy of Nursing. I just wanted to point out and raise a question with Josh, actually three things. Some comments just seem to be very much for the, like a big sound bite and it gets a great applause, but just take one layer down it’s a whole ‘nother issue. For example, you were saying about children of parents who are on insurance, but why are they on Medicaid? One perfect example is that children under 26 on parents’ insurance that do not have a job that covers insurance those children – those grandchildren, i.e., the grandchild of the person who’s providing the insurance, that grandchild has no access to insurance if it was not for Medicaid. That’s one example. Another one, you pointed out that non emergency transport—who’s to say and when what’s non emergency? Is it after the fact? An elderly person in a wheelchair with oxygen, do they call the ambulance? Do they not? Are they charged when somebody else determines it wasn’t an emergency? That’s another question. And the third issue that you just brought up was people staying home caring for people for free; let’s look at the economics there. Nobody’s doing that for free. They’re either giving up a job, taking lower hours for themselves, forfeiting future Medicare for themselves; it’s not for free. So those are all issues that have much deeper layers.

JOSH ARCHAMBAULT: Thank you for your comments. I’m not trying to be glib, and I don’t think, in this audience, I’m saying it for applause, but I think my broader point is just that do states – can they explore different things? So the example of a grandparent. It’s a valid concern. But are there cases where it could apply, and we should move the child off? Sure. So why aren’t we having that discussion? And, again, I don’t know if we should go point by point with these, I’m just raising the issue. I’m not trying to say let’s take a broad brush approach here. I’m actually articulating let’s allow for a nuanced discussion. Let’s allow for a state, and sometimes states aren’t allowed to have that nuanced discussion, to dive a little bit deeper on it. Non emergency transport, again, my point, when I said it was, are you near public transit? Are there other options? Yeah, sure. The devil’s in the details on how you structure this stuff, of course. But, having that conversation about flexibility or saying, you know what, you have had 150 rides this year and 40 missed medical appointments. That’s a real example. So what do we do about that? How do we allow states to say, look, no! We’re spending all this money, we’re not getting value. You’re not even showing up to the doctor’s appointment.

JUDITH SOLOMON: So, I sent most of my career at the state level, and I would say that on just those two examples, all of that can be, and is, addressed. The transportation benefit for people who can use public transportation, that’s what they get. They don’t get, you know, a cab or something. But, in some cases, we’re talking about people who need to get to dialysis. It’s not an emergency. If we don’t provide that it will become an emergency. So the devil is in the details for sure. I think for kids, you know, Medicaid provides—for poor kids in particular—a benefit that is really critical to their healthy development and we now have evidence to show, as these children are now adults, that it is paying off. They’re paying more taxes, they’re getting more education. So I think there are some sort of sound bites, I think particularly on the work, on the drug testing, all of those, and I really appreciated your comments because I think they are attempting to look at, you know, people, because this is at the end of the day, there’s real people here and it isn’t so simple to just say, yeah, you can work, and you should, and then, if you don’t, you shouldn’t get your health coverage.

DIANE ROWLAND: And I would just say that there have been some waivers granted around non emergency transportation and that one of the important things about waivers is sometimes to also have the evaluation of what the impact has been so we can make better informed choices. Maybe we will see from these demos of eliminating that that there’s a better way to do it. So let’s learn from experimentation and not just try and make decisions without some of the facts because I, I guess, as a researcher I believe facts do sometimes matter.

MARILYN SERAFINI: We have one more question up here. Let’s go ahead and take that and then we’ll think about transitioning to our next panel.

AUDIENCE MEMBER: Thank you. David Schulke with Health Quality Strategies. There’s been a lot of growth in managed Medicaid long term services and supports contractors, taking on the burdens of this population around these heavy burdens, and they’ve had a lot of flexibility at the community level to reallocate the money and to meet social determinants, and to move people out of institutions and do unusual things that states have not been able to do in the past to keep people out of institutional service. What do we know about the impact that these contracting arrangements and these care arrangements on quality and access where they’ve been implemented?

DIANE ROWLAND: I think we’re still learning and we’re still evaluating. I mean, those are some of the waivers that the states found to be the most difficult to negotiate because they had to negotiate Medicaid and Medicare together, which is always a challenge for the eligible population. I think in some places they’ve seen that the savings are not there; that there’s a lot of need that gets met, but I think we’re still looking at really the impact on that population because, as Judy said, that is the high need, chronically ill population that need services but we want to get the best value for those services and we want to be sure that those services are also being effectively integrated so we’re not paying for duplication.

MARILYN SERAFINI: Okay, so I’m going to ask the next panel to start working their way up here while I ask our panelists one final question, and I’d like to know from each of you, what is the one thing you’ll be watching from the Administration, whether you think it’s a great move or a horrible move, what is the one thing that the Administration could potentially do that would either trouble you or you would applaud?

JUDITH SOLOMON: Well, we’ll certainly be watching the types of waivers that will be approved around, and the details, and the evaluation plans and really trying to, you know, just see what develops and try to really make the case that these are, you know, whether or not they’re evidence based. It’s all about the waivers right now, I think.

JOSH ARCHAMBAULT: Yes, I generally agree with that. One of the things, one in particular, though, do they allow grandfathering? Do they allow waivers where you hold one population harmless and a new regime to come on – I’m thinking about pension reform, is often where we think this through—do they allow that in Medicaid and how quickly do they allow it in waivers.

DIANE ROWLAND: And I’ll be watching to see what happens with the CHIP reauthorization and how children are addressed in the coming months. Since we know CHIP expires in September there needs to be some action sooner rather than later, but also watching, especially, what happens to the role that Medicaid for people with disabilities and the disability population because I think there is a lot of great need to provide services in a more cost effective way and to meet the needs of that population, yet I know there are others who are even challenging what defines someone as disabled, and there may be an ongoing discussion of the disability programs more broadly and how that will affect their healthcare.

MARILYN SERAFINI: Ladies and gentlemen, please join me in thanking our panel for a very rich discussion.