What’s In Store for Medicaid

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PLEASE NOTE: This is an unedited transcript. Please refer to the audio recording, above, to confirm exact quotes.

Marilyn Serafini: Let me first introduce our panelists. We’re really lucky today. We have a crazy expert panel with us. To my right it Trish Riley. She is Executive Director of the National Academy for State Health Policy and President of its corporate board. She has had two stints at NASHP. She helped to build it in the ’80s and up to 2003, then she was the Director of the Governor’s office of Health Policy and Financing in Maine and now she is back at NASHP.

To her right is Josh Archambault. He is a Senior Fellow at the Foundation for Government Accountability. So previously he spent some time in Washington as a fellow at the Heritage Foundation and also he did some work in Massachusetts to then Governor Mitt Romney.

To my far right is Joan Alker. She is Executive Director of the Center for Children and Families. She is also a research professor at the Georgetown University McCourt School of Public Policy. She focuses on health coverage for low income children and families with emphasis on Medicaid and CHIP and the ACA.

Just very briefly could we just go around the room and could you just say your name and your affiliation so our speakers know who they are talking to today and they can assess how in depth to get.

[Reporters attending the briefing identify themselves]

Marilyn Serafini: Great. Good. Okay. So Trish, take it away.

Trish Riley: Okay. Given who is in the room, let me just talk a little bit about level set a little bit. My job is to level set and hopefully we will engage in a conversation with you so let me just spend a few minutes reminding you of course of what we know. Medicaid now covers 73 million people. It’s bigger than Medicare. The states have an enormous responsibility for a very complex program that is really four programs. It represents pregnant women and kids, people with disabilities both physical and mental, the elderly, and now the expansion adults. It is a profoundly complex program but it has been extremely facile in its life. When the aids epidemic occurred, it was the Medicaid program who covered when insurance companies were redlining. Katrina. Zika. Flint. This is a program that is able to turn on a dime as big and bulky and complex as it is.

Let’s jump into the current debate because I think it is a two-fold discussion. One is a debate about federalism in itself and the other is about the role of the program. What is Medicaid’s primary function? In the end, though, I think the discussion is about the money. Who pays and how much? So I think that’s the core question before us sometimes disguised under other discussions.

In the federalism debate, the notion of flexibility and block granting and per capita caps is really met at the state level. States have always asked for flexibility; I was a Medicaid director in the ’80s and I asked for flexibility. But it’s a tension. How much flexibility versus how much cutting and how much can you really save from flexibility? So the per capita cap proposal had a 25% cut in the program. The only kind of flexibility that would get you those kind of savings is to remove people from eligibility or profoundly restructure the program to be something quite different. So those are discussions about sort of the balancing act and the reality is even though the per capita cap would have been inflation adjusted by the medical CPI, the medial costs have always exceeded that. So it would have been significant cuts.

The second is the role of the program and this is not a new discussion either. Here we hear the program not to cover able-bodied people, it ought to cover the most vulnerable. It reminds me of the debates about the deserving poor. Who really is the program for? Its roots were indeed in welfare but it moved in the welfare reform act and in the ACA to become a low-income program, a program for low income health insurance.

This debate isn’t new and I think we have to sort of think back on some of that. The notion of the able bodied ought not to be covered by the Medicaid program, they’re higher income, they ought to buy health insurance. Certainly the Medicaid program serves high-income people. Look at those in long-term services and supports. They have incomes that are twice the poverty level. We sometimes forget that.

In the waiver initiatives, the waivers are a big part of the discussion, of course, everywhere at the moment. The earliest waiver that I remember was in the Regan administration in ’82, the Katie Becket waivers. Here again the discussion, the rub, who is the program for? Is it for low income people no matter what or is it a program for those who are very vulnerable? The Katie Becket waiver, the first really big waiver, was around allowing families, regardless of their income, to qualify their profoundly disabled children for the Medicaid program. That was an important first step and it was an argument in the states about whether we can charge premiums. No, this was a Medicaid program no matter the wealth of the parents. But then it switched.

So then you saw the next wave of waivers in Oregon. Legislator Dr. Kitzhaber, then Governor, was a needy doctor and he said, “Something is wrong here. I keep seeing people in the emergency department who are the working poor and they have nothing and it is Medicaid program that has rich benefits for some people but not for everybody.” Thus was born the priorities list in Oregon and then very controversial 1115 waiver where they basically set criteria about what were appropriate services, what were evidence based services, limiting services in order to expand?

The Tenn-care waiver where they moved the Tennessee Medicaid program into managed care was also an attempt to expand coverage as were all the managed care waivers in the ’90s. It was to reduce and make more efficient the program so that it could cover more people.

So this debate about able-bodied and who should get Medicaid is not a new one and certainly Secretary Price has signaled to the governors more flexibility for the states. When we look at the base we see today, the program is complex in large part because of its flexibility because of the extraordinary number of waivers that exist in the states. There are 1950, all kinds of different waivers, let’s focus on the 1115 that are the comprehensive reform waivers that are supposed to be research and testing of new ideas. There are currently 33 of those waivers operating in 41 states. So there is great flexibility going on in the states.

The majority of them are around delivery system payment reform. Medicaid is alive. They are a big, big payer. They are alive with activities to really move from volume to value and buy what matters. So they by far and away the most waivers and often they are by the ACA, through the CMMI systems proposals. So even governors who deeply resent the ACA and wouldn’t expand have embraced the funding for payment and delivery reform. Seven of then are the private option expansions, and I think Josh is going to talk more about the wave of those coming forward, 12 are long term services and supports to turn long term services and supports into a managed care program, 12 are for behavioral health, often with an opioid focus.

In Oregon, we see a new model emerging. In Oregon, Colorado, Illinois, New York. These continuing key organizations. It’s sort of the new wave of managed care. The notion that we as Medicaid programs have been buying healthcare but the population needs more than that. Recognizing the social determinants, the frustration of seeing kids with asthma constantly in the ED and returning to homes that are moldy. So the notion that we can somehow invest and begin to pay for some of the social determinants.

There is a new round coming. Josh will talk about those. We will see some, I think, around pharmacy. We will see more around IMD, Institutes of Medical Diseases, so mental health diseases, so that we can see more focus on opioids. But just let me close with sort of the state of the states and, again, returning to it’s always about the money, 31 Medicaid agencies are reporting serious budget problems. Governor’s budgets this year, while they did rise, they rose less than the 5.5% we’ve seen over the last couple of years. That’s particularly true in the states that are fossil fuel dependent. They are in deep, deep budget troubles. We need to always remind people states have balance budget requirements. They budget usually for two years and they have to balance that budget. Medicaid is always the challenge and more so now as states confront the uncertainty before us. It’s really hard to meet with your legislature and try to figure out a budget around a time when you don’t know what the Medicaid program is going to look like in the future.

Here is this program of 556 billion dollars and 73 million people and it looks a lot-the administration looks a lot like it did when I ran a Medicaid program in the ’80s. We did not spend an adequate amount of time thinking about what it takes to administer this program. It’s phenomenal what the states have been able to do with this program, the change, its adaptability, but the reality is the tenure of a Medicaid director is 19 months. The vacancy rate in Medicaid programs is 14%. It’s a program where we don’t invest in the management. We invest in program integrity, fraud, and abuse, boy oh boy, we’ll pay that, but we don’t invest in the management of the program.

Finally, I think we will see some changes and so new discussions emerge this year and next. It’s important to keep in mind the face of states is very red. The states are Republican, governors and legislators, 33 governors are Republicans, 16 Democrats and independent. In 2018, 36 of them are up for re-election and of those, 28 are Republicans, 15 are open seats, 9 Democrats, 6 open seats. So I think the discussion about Medicaid and whatever the congress and the administration does around it will be fast and furious in those elections.

Marilyn Serafini: Great, thank you. Josh.

Josh Archambault: Well thank you all so much for having me this morning. For those of you who aren’t as familiar with FGA, we are a relatively unknown entity in DC although we are playing here a little bit more these days. We are active in about 37 states. We are a think tank and we work just on health and welfare issues. So we have been involved in DC more recently obviously because of the connection to states and as we’ve talked to state leaders around the country and their frustration with I don’t want to say the lack of dialogue but the lack of understanding at times of federal policy makers of what some of the state realities are, particularly around Medicaid in particular.

I think I’m on this panel to represent a slightly different perspective so let me do that. We hear a lot of frustration from states about flexibility in Medicaid. While I don’t disagree with what Trish said, the flexibility potential is there, I think a lot of states are frustrated for a variety of reasons.

One, they have to come ask. They partially fund this program or half in some states fund this program and they have to come ask father or mother government in DC, “Can I do this on my Medicaid program?” They have to balance their budget. When they come to Washington and they are on a ten year budget window, and some states are on an annual budget, some are on every two years, those conversations aren’t the same conversation about flexibility in a program and how quickly you can change something, enrollment levels or benefit levels or whatever it might be that a state might be looking for. I think the average 1115 waiver takes over a year to get approval, which, again, is a problem when you’re budgeting on a year-to-year basis and you want to try and change your program.

With that being said, I think with the new administration here in DC, it really is a whole new world for a lot of these republican governors in particular as they’re thinking through what do they want to ask for and there is a fundamental question here, do governors view Medicaid as a welfare program or a health insurance program? Depending on how they answer that question probably influences what they are going to ask for.

So there is a number of governors who view it as a welfare program so they are going to ask for things like time limits and work requirements, which, again, sound very familiar based on the welfare reform discussion. If they view it as a health insurance program, they might ask for more co-pays or penalties for not showing up to appointments or higher penalties for non-emergency medical visits or you can’t have unlimited mandatory non-medical transport.

So these are the sorts of things that governors are thinking through and Governor Bevin in Kentucky already has a waiver in for work requirements for his expansion population. Governor Ducey in Arizona will follow shortly. Kansas and Maine are actively working on and have already been public about major waivers that will be put in in the next probably five to six months with a lot of these elements. Sometimes they will be a blend of them, of the kind of health insurance and welfare things and at times it will be different for different populations because as Trish said, this is a-there are different silos within Medicaid. It is not a uniform program.

With that all being said, what happens with the repeal bill certainly is on a number of their minds and expansion states in particular, I think there is a couple of things they are looking at. There is probably two camps on the expansion population with what’s in the repeal bill. Some who actually view it as a good off-ramp if they don’t want to cover the able-bodied adult population for a variety of reasons. They are starting to feel the pinch in their state budgets of their share of the expansion populations. We pulled together data, every state where there is public available data, enrollment was on average 110% of projections so the cost of that is starting to be felt in these expansion states as these have to start to pick up their share. So for them, they want to know how is the financing going to change in the future and how much flexibility are they going to be given on plan design? Can they do things like grandfathering? So think about pension reform. The current enrollees are held harmless but every new person that comes on is under a different scenario or different plan design. Or can we cap enrollment? Can we freeze enrollment? These are things that are happening in CHIP and other areas but haven’t been as widely applied in these other populations.

So those are-that is some of the thinking that is happening at the state level. I also know that a bunch of governors have actually expressed concern that Medicaid is the public health response to Zika and opioids and others so I think that-I’m not sure that they have a response yet on what to do differently but I think they want the federal government to think that Medicaid isn’t the default for all of those things.

The elephant in the room that will not go away, and I’m not sure where we go from here, is long-term care. It is an issue that is just crushing state’s budgets. Moving people out of nursing homes and starting to pay family members isn’t always a silver bullet. There is a couple of anecdotal examples in Minnesota where they actually started spending more money because family members were taking care of elderly family members in their home for no compensation so all of a sudden you started paying for it.

So certainly it saves a lot of money in most cases but not always so I think states really are just scratching their head trying to figure out how do you get out of this? Is there a tradeoff with the federal government where they take all long-term care and states take all other populations?

This is the sort of out of the box thinking that I think is there and the block grant per capita cap proposal in conversation is a little bit more nuanced at the state level. I’m not sure it will be more nuanced here but at the state level it is about what populations are in it versus out, what is the growth. I know we have been part of some of those conversations and seeing documents governors trying to really think that through for the first time in a long time. Trying to, again, influence DC people’s thinking and it’s a long, messy process, as you all know but that is kind of what we’re hearing at the state level.

Marilyn Serafini: Good. Okay. Thank you. Joan.

Joan Alker: Well thanks so much and it’s great to put a name to some of the faces that I’ve emailed with and spoken with on the phone. I’m going to try to just step back and offer some observations on some of these themes that we’ve been hearing about. It’s a nice opportunity to do that rather than dive deeply into some of these specific states.

I want to really second Trish’s point. I think a lot of this debate is really about the money. I’m not going to actually talk about the money. I’m going to talk about the debate but I think at the end of the day it really is about the money and clearly we could see from the exercise of the American Healthcare Act that Medicaid became the piggy bank. Medicaid was the source for enormous cuts, 840 billion in the final version. That was by far the largest source of cuts. So I think that tends to get obscured sometimes by this debate about state flexibility.

I want to spend some time on packing that a little bit. Unfortunately, like many things, a lot of debates typically about health policy but really about anything, the facts get obscured by the ideology and the objectives that may be hidden. Again, here I think it’s about money.

So the reason I think the state flexibility debate is flawed and really you all have to question some of the assumptions that you hear is there is a couple of reasons. First of all, for those of you who don’t cover Medicaid all the time and many of you do cover it a lot, but I think those that have been around Medicaid for any period of time, there is sort of a famous saying, “If you’ve seen one Medicaid program, you’ve seen one Medicaid program.” How many of you have heard that? Yes. I think mostly everybody and that’s because Medicaid is already very flexible. That’s because states have a lot of options not only through waivers which we’re talking about today but also through simply state amendments and choices they make every day, every month, every year in their programs and as a result, their programs look different across the states. So that’s critical.

I think the second reason that I think it is very important to question he state flexibility debate is because state flexibility sounds benign and it is one of those sort of apple pie terms. Who wouldn’t want states to have flexibility? Well, again, if you unpack this from a policies perspective and think about it this way because Medicaid is very complicated. We all know that. But if you think about what Medicaid is spending money on, it’s really coming from three things: who you cover, what you cover for them, and how much do you pay the providers to provide those services. So those are sort of the-very simply, those are the three things that you are spending money on.

The last of these three things, how much you’re paying the providers to provide those services, states already decide that by and large. They decide how much they pay the providers.

So that leaves you the first two areas, who you cover and what you give them, as the areas I which the federal government is now being approached for more flexibility. So you can see.as Josh has just alluded to, explicit requests we can see to limit enrollment, things like enrollment freezes and caps. That’s a very clear limit on enrollment that will result in fewer people being covered. You can see less explicit but also, at the end of the day, restrictions on enrollment like work requirements, like time limits. And then you can see restrictions on what you cover, both potentially benefit limitations, we have seen the transportation benefit was actually waived by the Obama administration. I think we can expect to see more requests to waive certain benefits and the costs that families absorb in accessing those benefits, both higher cost sharing as well as higher premium which really fall in both categories because we know from plenty of research that the higher the premium is, the fewer people get coverage.

So really these new areas of state flexibility, when you unpack them by and large and the action we’re going to see in the months going forward as this becomes increasingly important in the Medicaid program, is in restricting the number of people who are able to be on the Medicaid program, stay on the Medicaid program, and limiting of what they get or increasing the cost.

So I, as folks know, have a lot of concern of these approaches. I think fundamentally, they reduce access to care. I think that is short sighted both is it unfortunate for the beneficiary and the vulnerable folks who rely on this program but I think from a healthcare policy perspective it’s short sighted simply because we limit somebodies access to care does not mean their healthcare needs to go away and in fact their healthcare needs get worse and their prime conditions get worse and they wind up in the emergency room, which is the worst place to deliver care.

The other aspect of these kinds of approaches like Indiana, like Kentucky, and others we will see coming forward is that they are extraordinarily complicated and involve very considerable administrative outlays, new systems, new contractors to run all of the aspects of these programs, and really, frankly, on the ground, nobody understands them. You are starting to see more research about that but to imagine that a system as complicated as Indiana, I think at one point we counted six different benefit packages under the waiver, to imagine that it is not just the beneficiaries that don’t understand it, it is the providers, it is the eligibility workers, and then people who have to make the program run. So this is a problem.

So fundamentally, I don’t think that these programs actually meet their stated objectives in a number of ways as well.

So with that, I think just to note that we will continue to see more and more waiver activity I think although at the moment, I would say the real activity is emanating from those states that are red states that did expand already but they had a waiver approach and now they want to modify their waiver approach and it’s worth noting that some of these states, these changes are not actually emanating from the governor, they’re emanating from the legislature where opponents of expansion originally lost and they keep coming back and saying, “We want to make changes. We want to nibble around the edges.” We see that in Ohio. We see that in Arizona and Kentucky of course where Governor Bevin ran on an anti-ACA platform and inherited the Medicaid expansion.

So a lot of these tensions is, as I said before, the election is true now. The Medicaid expansion itself is a purely a Republican fight within the Republican Party. It is not a partisan issue. It is a fight within the Republican Party and I think you are going to continue to see that playing out and particularly, if congress ultimately does not act with respect to repeal and replace, with respect to Medicaid reforms, most of the locust of the activity around Medicaid will focus on the waiver process. This is exactly what we saw happen in the Bush administration. Early on in the Bush years, there was an attempt to block grant the Medicaid program. It didn’t get very far at all in congress and as a result, they moved to waiver strategy. So that is certainly something we could see here.

So with that, I’m probably out of time. I’m going to hand it back.

Marilyn Serafini: That’s great. Thank you. In a moment I am going to turn it over to you all for your questions but I-we’ve spoken-I’m going to just take the opportunity to ask the first question and dig a little bit deeper. We’ve been talking in general terms about what states generally are looking for, what we’re seeing generally. Specifically, who is doing what right now? Are we seeing a handful of states that are still looking to expand? Is that going to happen? Is that impossible? Do we have-are there particular kinds of waivers? Can you give us an example of where we are seeing this and who may be moving forward? Can we just try to get a little more specific?

Joan Alker: I can quickly answer that. I was sort of getting there when I was talking about we have this group of states. It’s under ten states who did expand and who already had approached their expansion through a waiver but who may be coming back to make some modifications. So I will give an example of Arkansas. They are going to have a special session, I think next week, to make some changes. It will appear in a waiver. Arizona has an amendment that will be coming in shortly. It is receive public ______[00:29:29] at the state level. It does have work requirement, time limit, things like that. That was something is that the Arizona legislature passed a few years ago and they said to the governor, “You must submit this waiver every single year. If it is denied, you’ve got to go back the next year.” So that is why Arizona is doing that. Kentucky, of course, I think Josh mentioned this. Kentucky is pending. That came in in the last administration. Basically, after the election, the last administration decided they weren’t going to decide on that until the new administration came in. So Kentucky is pending and I think Kentucky may be the first significant waiver decision we see. I would be curious to hear both of your opinions on that. And then we have a few others as well but I think that gives you the flavor.

Trish Riley: Indiana’s renewal.

Joan Alker: Indiana’s renewal. Yep. We have a couple of states that are really fascinating that are looking at moving forward on expansion potentially, even in this very uncertain climate with the possible appeal. I think folks probably saw Kansas, the republican legislature voted to expand right around the time repeal and replace was being debated, which I though was really pretty interesting. They are having a special session and that issue is going to come up again. North Carolina is I think more of a long shot but we did see some republican legislators there, particularly interest from the rural health community there, to think about some kind of expansion. So we do have a couple of states, again, they’re all Republican states, who are, despite where the national climate is, having some pretty active debates about picking up expansion and I expect both of those would approach it through a waiver.

Josh Archambault: Yeah, I actually don’t know if I agree with your assessment that it’s just expansion states asking. Governor Walker is putting together a waiver request. Maine and Kansas who have not expanded to this date are putting together requests. I think what’s interesting about this is that Kansas is not in a vacuum. That was a concerted effort by the hospitals to fund candidates who said they would vote for expansion. So I think what happens here in DC makes a big difference, obviously. As we have been saying, the funding. But you also have states like Oregon saying on the tables may be ending expansion because of the budget crisis. Is that likely to happen in Oregon? Probably not but it’s an active discussion and that should tell you something about the pressure that states are starting to feel on the budget side. So again, we can cherry pick back and forth, I don’t expect a ton of action on expansion over the next year or so, Kansas being one of the exceptions because of the small campaign by the hospitals, because I think folks are starting to look around the country.

Let me just make one side point here that I think almost never gets covered. This is not purely an ideological issue or even a partisan issue. There are people at the state levee who have waiting lists that are concerned about disabled populations or they have public education concerns or they have infrastructure concerns and let’s not kid ourselves to say that you can spend one dollar twice. If you expand and you have state dollars on the table, that is one less dollar to be spent on something else. So there are genuine people who are not mean who are concerned about these things at the state level and they have to write this budget every year and make really hard decisions and the expansion discussion makes that conversation even harder going forward with the caveat, let’s see what happens at the federal level.

Trish Riley: I think the federal discussion has somewhat of a chilling effect on those states that want to do really creative reforms. I think we have to be cautious about leaping to-the Oregon discussion is a legislature-in Maine-Maine is a great example. I live there so I watch this every day. The governor very much has proposed a waiver that is very much like the Arkansas one, work time limits, work requirements, the works. The legislature is about to consider expansion proposal that has been vetoed six times because it’s going for citizen’s referendum, a citizen referendum to expand coverage. So it’s the yin and yang across all of the states. The issue of waiting lists that you do hear often from conservative states who very much favor limits to the Medicaid program. Keep in mind, the waiting lists are for expanded services. They’re for waiver services. Those populations of disabled people still get regular Medicaid benefits. So it’s not a waiting list for services.

I would just finally end on the CHIP example that Joan talked to us about. CHIP is a program that had waiting lists because of it was block grant but looked what happened. Every time there was a waiting list in CHIP, the congress expanded the appropriation for it. So, hmm, isn’t that interesting that every time there was a real rubber hits the road where people weren’t getting covered, there was a new appropriation. So effectively, it didn’t work quite as one would expect a block grant to work.

Joan Alker: If I can just jump in on this expansion creating these waiting lists, I think that is a very flawed argument. There is not only…

Josh Archambault: I didn’t say creating waiting list. I said complicates the situation.

Trish Riley: Yeah.

Joan Alker: Okay. I guess what I will just raise for everybody is that if you’re concerned about pitting vulnerable populations against each other, the worst proposal that would create such a situation would be to block grant and per capita cap the program federally. That is exactly what the American Healthcare Act did and that would pit vulnerable populations against each other with declining federal funds and states having more ability to make cuts, which would have to do with the cost shift. So to me, that’s the worst nightmare is to cap the block grant. That will lead to pitting vulnerable populations against each other. We just had a new study last week in Health Affairs that showed that the Medicaid expansion had not impacted state budgets, frankly positively…

Josh Archambault: It was 100% federal dollars. Of course not.

Joan Alker: And it wasn’t pitting it against education funding.

Josh Archambault: Let’s just put that aside for a second. I just think it’s a broader question here that do we believe that Medicaid delivers value? What is the point of Medicaid? Is it to get as many people on it as possible or is it to make sure that the people who are on it have good access and good quality outcomes and the people that shouldn’t be on it aren’t or the people that can be on some other source of coverage should be there instead.

I think that’s the ultimate question and I think we instead, right and left, have a Medicaid is amazing on the left and on the right, it’s terrible and never delivers value. That’s the dynamic we have frequently in these conversations and I would like to at least think that we could somewhere end up in the middle with some sort of compromise to say, “Okay, for the truly needy, this is the commitment we are going to make to them.”

The 13 year old in Arkansas who can’t speak and has ten seizures a day and who is waiting for, yes, additional services but her mother can’t basically leave her, that we’re not going to be able to fund services for her versus our goal is to make people work oriented and get people back into private coverage which in a lot of these expansion states, a lot of these folks were on private coverage previously, and allowing states to have some flexibility there or CHIP.

Why do we have kids on Medicaid when their parents have private insurance? Put them on the same coverage at least. Those are the sorts of conversations that I would like to be having about what’s the future of Medicaid versus we need as many people on and if it looks different then we’re throwing all of those people off and it’s terrible. Yeah, we should have conversations about consequences of course, but I don’t think it happens in a vacuum. We have to look at kind of the private market in relation to Medicaid.

Trish Riley: I’m going to couple that with the reality that America has a great poverty problem. The question of these populations and where populations who are the working poor, and most of the expansion population work, where they can afford coverage. So you either lose the Medicaid program or you deeply increase the subsidies available to buy private coverage.

Marilyn Serafini: Okay, let’s start here and then-okay, we’ve got lots of questions.

Audience Question: You guys have already touched on this but can you talk a little bit more about Arkansas, what it is they’re doing now and what it is they want to change.

Josh Archambault: I don’t know if they’re voting on it but is it what the Governor proposed a couple of weeks ago?

Joan Alker: So I think there are three things if I can remember them.

Audience Question: Start with what they’re doing now because I forget.

Joan Alker: Okay. Yeah.

Josh Archambault: You can start. Go ahead.

Joan Alker: Okay, so Arkansas decided they are doing something called the private option and what they decided to do was to buy coverage in the marketplace for their expanded Medicaid population. So it was kind of a unique situation I think because Arkansas didn’t have managed care and I think that was one of the reasons that they did this. So they have been buying marketplace coverage.

So one of the things that the governor has said that he wants to do is roll back coverage to 100% of poverty and maintain his enhanced match and then those people can go into the marketplace 100 to 138%, which…

Audience Question: Isn’t that what they are already doing? That’s why I keep getting confused. Aren’t we buying…?

Joan Alker: But he wouldn’t pay for them. He wouldn’t pay any more of the state share. They would become eligible for federal subsidies.

Audience Question: So we really would be cutting…

Joan Alker: So they really would be out of Medicaid.

Audience Question:Thank you.

Joan Alker: It’s ironic to have this discussion at the time of repeal happening and there is a few other things including…

Josh Archambault: Yeah, there are some work search type requirements that he has talked about and I think what’s interesting in Arkansas is that this has remained a contentious issue its entire life. Almost every session, there is at least one or two bills to defund or end the program and I do think-and again, you can say it’s by the people who lost but it’s not settled is my point and there continues to be-we saw some of the mailers for the last campaign cycle for the legislative races and it’s popping up in mailers for state legislative races. So it is very much alive and well as a debate.

Audience Question: In Kansas it was down to the last vote last time.

Josh Archambault: Correct. Correct.

Joan Alker: Well it’s unique in that every single year they have to appropriate the state funds.

Josh Archambault: Funds, yeah.

Joan Alker: And that’s a unique situation.

Josh Archambault: So it comes up as a discussion.

Joan Alker: Yeah, you’re right.

Josh Archambault: That’s correct.

Audience Question: Two questions about the waivers. One is it clear what CMS can do on its own without changes to the law such as for work requirements and two, you mentioned that there were so many of these waivers already out there and the waivers are supposed to be testing theories about better ways to run the program How good is the evaluation of whether the waivers-whether the things that we tested work or not? Have we learned anything from all of these waivers about what works and what doesn’t?

Josh Archambault: It depends on who you ask I think [laughter].

Trish Riley: Indiana is a perfect example where then Governor Pence, there is a requirement for independent evaluation. The independent evaluation by an organization that the governor pointed out that criticized the private option. Therefore, he has his own evaluation in place and most states do. So what you often have is dualing data and it becomes pretty unclear what the data necessarily tells you. The evaluations often take a long time and the reality of pragmatic states, the evaluation might happen years later or too late and the legislature already makes a decision. They make a decision without the evaluation based on what they think people are achieving, what the costs are, and what the value is. So as much as I love data driven policy-what is the plural of anecdote? Policy [laughter] and I think that’s the reality on the ground. These evaluations do a great job trying to get real-time data but it’s very hard, not the least of which is some of the data problems that exist currently.

Joan Alker: Yeah, I would second that. I would go out on a limb, I certainly don’t think this is going to happen but I think if you congress came in and included some language to have stronger evaluation requirements for these waivers. As you say, they are intended to be demonstrating something new and they really-frequently when you have the state paying the evaluator, there is an obvious conflict of interest there for the evaluator but if you don’t have the state paying the evaluator, a lot of times the state won’t hand over the data the evaluator needs. So it’s a difficult situation.

Trish Riley: And the states do want to know what works. You can’t be so cynical.

Joan Alker: Absolutely. Yes.

Trish Riley: There are real needs. The states need to know what works.

Joan Alker: Many of these evaluators I think are doing a good job. They are trying and there is either political constraints or time constraints or data constraint.

Trish Riley: But there is also, to Josh’s point, the notion that the states have-Arizona became a Medicaid program with the 1115 waiver. It’s been going for decades. So when does it prove that it works. So there are some discussions that we know what works and those should not be waivers and they should be simply applied as a state plan amendment.

Josh Archambault: I’m just going to say two quick things. I can’t underscore enough, I don’t know how many of you have had a chance to go to a Medicaid agency. The data challenges in some of these agencies-I think I was in one that effectively they were running their program, and this is a little glib, but off an Excel spreadsheet, but it wasn’t far from that as far as the IT and some of that is changing. They are spending hundreds of millions of dollars in most of these states, to change some of that. Hopefully it gets better.

To answer your first question, and chime in if you disagree, I think the ability for CMS or HHS for what they can waive is broad. There are some general kind of principles by which they are supposed to meet to authorize waivers but it’s pretty big and I think this is actually some of the frustration by states in saying in theory, we should be able to do a lot but it depends on the bureaucrat who is sitting in those offices at that moment and it’s temporary. So you authorize our 1115 waiver, well maybe three to five years from now you change your mind or an administration changes and all of a sudden you may not have that ability to do the same thing.

So I do think that that’s a consideration for states and a frustration for them often and that’s not just a red state frustration. I’ve heard it in blue states and purple states for them to just say, “Oh, a new administration is in. I wonder what they’re going to do.” Now they don’t frequently poll them but they can poll them anytime and so, again, that for them is just feeling like we really feel like a partner when you can do whatever you want or the three or five people making these decisions can say, “We don’t agree with that so we’re not going to authorize it even though you are putting money on the table to pay for this program too.”

Joan Alker: I would just add a couple of things to that. First, I generally agree with Josh and I’m going to propose something that maybe we can agree on going forward as a reform. But there are limitations for what you can waive. The way the statute is structured it references certain parts of the Medicaid statute so there are certain parts of the Medicaid statute that are outside of that. For example, the matching rate and the matching structure are not a part of the statute that you can waive. I think that there are a lot of questions about certain issues, which not being a lawyer, I’m not going to impinge on but for example whether work requirement is something you can impose, whether that is consistent with the objectives Medicaid program, which is the broad authorization. I imagine we will see these legal questions play out.

So I guess the one issue I was going to propose, Josh, that maybe we could find some common ground on is I think we can all agree that there is a data problem. I think that has been getting better. There have been efforts to make that better but I also think there needs to be resources, to Trisha’s point earlier, to focus on management of the program but something we’ve been very interested, for example, is the child core indicators that were included in CHIPRA but they are not mandatory. So not even all states report them so you can’t compare across states.

That’s going to require some mandatory actions on states, which, again, may be problematic in your view but we would love to have 50 plus DC states where we can look at the data and compare it but I think that’s going to require resources and it’s also going to require states to put that as a higher priority, which I don’t think that they should be asked to do unless they get the resources.

Audience Question: I have a two-part question. First is you talked about work requirements and it seems like all of it state that gets one approved. How much of a fight like legal, whatever fight do you think that this is all going to result in if CMS approves something for the waivers? So if you could just talk about what you anticipate on that.

The second part is we, myself included, tend to focus on the expansion population a lot but of course that’s not nearly what the cost driver of the program is. So could you talk about what you think-is there anything new happening in the states on trying to contain for the elderly, disabled, the populations that are really the most expensive in the program?

Josh Archambault: I assume there will be a legal challenge on the work requirements side. I honestly think this is an 80/20 issue. 80% of the public supports it. So for what that’s worth. I think the other thing is I actually don’t think it’s that complex. States have a history of a work requirement for SNAP and for TANF. What’s in the American Healthcare Act is something that looks more like TANF.

One of those thresholds is work search. I don’t honestly think that that’s that big of a hurdle that for most populations that it would apply to, and let’s, again, be very clear, this is not a work requirement for children of anything like that or somebody in a nursing home. It is not applied across the whole program but for individuals, if we believe, again, if the goal and if one of the takeaways from welfare reform-perhaps we will have disagreement on this too on the panel-one of the takeaways was that work is really important to getting people out of poverty, then it would make sense that some sort of work orientation of some kind could also work to get people out of poverty and off of Medicaid.

So I think that there is a strong policy case to be made of saying if we believe it works for single moms on TANF, why do we believe that able-bodied adults without dependents, which is most of the expansion population, shouldn’t have this? Or if they’re on food stamps, they have a work requirement but not on Medicaid. I think there is a legitimate policy discussion to be had there at the legal questions. We will just have to wait and see how that plays out.

Audience Question: Doesn’t this go back to your question of is this a welfare program or an insurance program?

Trish Riley: Right, right.

Josh Archambault: Yeah, yeah, sure, but or not because it also applies to health insurance because the data-the research is pretty clear that people who are working are healthier and that work is a really important piece of recovery and there is a massive literature review out of the UK looking at the value of work in all of these different sub-populations, folks that we don’t tend to think of and you meet some-just go to states and talk to the disabled advocacy community. They view work as a huge, huge part of kind of for folks that they’re advocating for that community and you talk to folks in addiction and talk to folks in mental health areas so I think there is an openness here from some state health and human services and Medicaid directors to say we need to think about this differently and work might be part of that or work orientation or whatever you want to call it.

Trish Riley: I think when you’re a Medicaid director you are sued all the time and it’s the reality of the life and I think we will see suits but I don’t think that the work requirement is as contentious as the limits would be as time limits on a health program. So I think we ought to take a hard look at it and it depends on how it plays out and how it’s crafted and among the kinds of issues that keep Medicaid directors up at night, I’m not sure work requirements would be one of them at the top of the list. Certainly you hit on, and I think Julie hits at the point, is it welfare or is it healthcare and what do we do?

To your second questions on the cost drivers. The cost drivers are increasingly children with healthcare needs, special needs kids, children in youth who have very significant health problems and they may be the families who are putting kids into the Medicaid program because of the richness of the pediatric benefit and the care they can get. It’s people with physical and mental disabilities. Long-term service and supports the rate of growth and those costs are in check even though the population is huge and they spend a big part of the costs.

Around that long-term services and supports, the issues that Josh brought up, the trade-off, but that becomes terribly complicated but it’s an issue that surfaces all the time but it’s the issue of the dual eligible, those low income people who are eligible for both Medicare and Medicaid and this is a rub for the states. On the one hand, states have to use Medicaid dollars to buy people into Medicare coverage and that ought to be a Medicare requirement. Increasingly, states are putting folks in managed care but are having a tough time making that work because of the Medicare rules, one of which is choice that patients on Medicare get full choice. In Medicaid, you get to lock them in for a period of time in managed care.

So the managed care agencies argue how can we manage care if people can come and go? So that issue around we might see waivers and requests from states there around the duals. There is always the anger about the claw back when Part-D came into effect, Medicaid thought it would see savings. They have been paying the drug costs for dual eligibles for a long, long time but in fact they have to pay a claw back. So those are some of the issues.

The biggest area of activity around the states is around behavioral health and trying to figure out how to connect behavioral health with primary care, much activity around managed care, new discussions around the opioid crisis and you’ll see states asking for permission that is now not available to put folks in institutions for mental disorders, IMDs, mental health hospitals, to deal with substance abuse. It’s always everybody is afraid of, again, creating the mass of institutions that was so problematic in the culture. The states are saying, “No, no, given this epidemic, we need new strategies and new tools.” So I think in many respects, the behavioral health work is the most active work around the states and where we will see lots of activity.

Josh Archambault: I will just add one small thing to that. We’ve actually heard some chatter about they’re calling them mega waivers and I think Speaker Ryan and maybe opportunity accounts or something. With welfare reform likely to come up at some point here, CHIP reauthorization as well, but there might be a conversation around states getting funds across programs, so housing and others and I think the dual eligible pilots have had a real mixed record and there is some belief that could we-if we had less siloing and more flexibility around the funding for this then maybe we are able to treat people in a better way, coordinated care.

That’s going to take a real state leader to step forward. I can see somebody like Governor Walker or something. I don’t see a lot of governors positioned right now to be able to take that but you might see a Democrat or Republican see an opportunity and at least make the argument that these three or four programs we want to braid funding together so that we can better take care of people. We will see.

Audience Question: So a question about high drug prices and how they fit into the reforms you were talking about like block grants and everything. Isn’t that-do block grants and per capita caps really take into account the strain that high drug prices have on Medicaid budget and how would that impact the overall debate too?

Trish Riley: Next question [laughter]. I think they have obviously been an enormous driver. You look at the Hep-C example where it’s disproportionate numbers of people on Medicaid obviously have Hepatitis and could have been saved by those drugs and there were court challenges, there were all kinds of activities. So it is a very high and unpredictable cost driver in the Medicaid program complicated by the way the Medicaid program, federally and in the states, deals with drug prices, which is a very complex rebate system. So the notion is, “I’ll give you a rebate and you put my drug on your formulary,” and states get supplemental rebates as well.

We are seeing more and more states start to think about, “Maybe we want to think differently about this. Maybe we really want to be able to constrain our formularies.” I think that there needs to be more discussion about whether and how the Medicaid rules around pharmacy and there will undoubtedly be some waiver requests to change that. And the Medicaid program is required-the pharmaceutical manufacturers are required to pay best price to Medicaid programs and as other state agencies get engaged, and we’re pretty active with them trying to reduce drug prices for employers where it has really been an enormous challenge. They get into challenges with the Medicaid program because you don’t want to conflict with Medicaid’s best price rules. So it’s a really complex array of policy issues that make it really tough for states to address the issue.

Joan Alker: I think it speaks to exactly why the issue is not Medicaid, it is a healthcare systemic issue. Drug prices. If anything, Medicaid is probably doing better because of the rebate than other payers and the reality is that Medicaid is an extremely cost effective program. That’s the good news and the bad news about Medicaid. It is the lowest per capita spender in our healthcare system so when you hear Medicaid costs are out of control, they are not. Our healthcare costs are out of control. It’s not Medicaid’s. Medicaid’s are lower than everybody else’s and, again, that’s the good news and the bad news because sometimes we have access problems in Medicaid because those costs are low.

So these questions, like the prescription drug question, is really something that has to be thought of across pairs in my view and frankly, getting back to the previous issue, I think all of us here would agree, and Josh said right up front, that long-term care is the elephant in the room. That’s the deficiency in the Medicare program that Medicaid has had to pick up.

So these are broad questions. Unfortunately, I worry that the capacity of our political system is unable to respond to them but really these are the kinds of broader issues that we need to address.

Audience Question: Can we speak to the tensions over the _____[00:57:29] in the deep south, particularly how you see it playing out in a state like Louisiana with a Democratic governor and a very Republican legislature and congressional delegation.

Josh Archambault: Louisiana is an interesting case because it was a republican legislature that actively gave the go ahead to whoever won the election next and it was a Democrat in that case. I think this is a situation where, again, we’re going to be a broken record, where the financing matters. So if the financing changes at the federal level as kind of currently envisioned, starting in 2020, I can very well see Louisiana saying they’re not going to roll any new people on expansion. If you’re on expansion, you stay at the enhanced match rate, no new enrollees if the state has the flexibility to do that.

I think they are a good case study of kind of kind of-there wasn’t-and we watched the Louisiana debate a little bit, there wasn’t actually really a public debate about it. It kind of just happened whereas in other states it was very public. It was on the front page all the time, it was very contentious in the legislature. It just kind of petered out and the authority was granted in Louisiana effectively. I think that’s where the dollars and cents discussion is going to come in Louisiana to play out.

Joan Alker: I think the governor ran on it.

Josh Archambault: Well the governor ran on it, correct. Sure. So when he is in office, he will do what he can to try to say we want to keep it.

Audience Question: I have a waiver question. I can’t-I’m trying to think of which state it was. It was a Midwest state that did not expand dealing with the coverage gap and there was an analysis done at the state level recommending to use 1332s to let-to basically bring the expansion population from other states into more better subsidized exchange plans. I also heard kind of the idea going around and letting people with bronze plans who aren’t getting the coverage that they want with low income buy into Medicaid managed care plans using 1115s. Do you have thoughts on those proposals?

Trish Riley: They are real. I think the 1332 challenge will be-it will likely be more open and opportunistic in this administration but the challenge is two-fold. One is it still has the statutory requirement not to increase the federal deficit, which is kind of a challenge for state because we don’t really understand how the budget works let alone being able to achieve that. But I think the bigger issue would be the money. Right now those folks have Medicaid money and you can only get the money through expansion. Will there be some kind of-could there be some kind of middle ground where instead of the Medicaid expansion money, it can go to a 1332 kind of option in which case that’s-like the basic health plan model that some states are playing with. But it’s all about can you make the money work and can you make the subsidies deep enough so that people can really afford the coverage.

I think those are some of the kinds of middle ground discussions that need to happen. Could you-in the ACA, could you think about a provision where you more deeply subsidize some basic plans, the young adult plans, and a reinsurance provision to protect the pool when they come in for real care? All of those things are possible, but in this environment, it seems to me nobody is talking about how you could have repairs.

Josh Archambault: I will just say on the 1332s, we’ve heard a lot of chatter about that at the state level mainly by consultants who want to get paid to do reports for states quite frankly. I think it is very difficult for states to do anything meaningful other than single payer through them and because the four statutory guard rails require certain things that unless you are getting a ton more money-well, let me put one caveat, if a state were allowed to-I don’t think they are allowed to do this but this has been the argument made at the states, if a state were to reform using an 1115 waiver and take some of the savings and apply it to a 1332 tight population, that might work in the statutory guard rails. I don’t think that’s allowed so that’s a challenge to be able to make that a reality so therefore, you just have a lot of stated nibbling around the edges on 1332s. Nothing that is really that big.

Now, if the Patient and State Stabilization Fund that is in the American Healthcare Act were to pass, it changes the discussion.

Trish Riley: It does.

Josh Archambault: 130 billion dollars over a few year period changes the discussion. But, that money is not forever. So the discussion would just resurface again about who is paying for it in a couple of years.

Trish Riley: And it may not be enough.

Audience Question: It is also supposed to go to high-risk pools.

Audience Question: Or reinsurance right?

Trish Riley: Reinsurance. It can go to reinsurance. It could do the invisible insurance.

Audience Question: Do you have any sense of when we will see the decision on the Kentucky waiver and then what happens next? Will there be a fight, they wouldn’t be able to implement the work rules right away?

Joan Alker: I don’t know what you’ve heard.

Josh Archambault: We were originally told by the Bevin administration they expected a decision in August or September of last year. Or they applied and they were expecting like a month or so and I said, “Yeah, unlikely,” for a variety of reasons. So no. I don’t think we have any idea when they are going to rule on that. I do probably think it will be the fist one though because it has been sitting there for so long and yeah, CMS has been actively making calls to states and saying, “We’re really open. Please send us your ideas.” So there is one sitting right in front of them on their desk so I don’t think they really have an option. Maybe Arizona will push them to rule on it quicker.

As far as the legal terms, you’d have to have standing, so it would have to go into effect first. Somebody would have to fail the work requirement I think or work whatever it is before they could sue. That would probably take quite a while. So it would be up and running, I would think, for quite a while before you have some legal resolution.

Audience Question: States can sue if they want based on what they have to do to set it up but ….

Trish Riley: Well seeing as they asked for it, probably not unless there was a change of logic.

Joan Alker: Yeah. I think we’re going to see it in the next couple of months. I think it seems like there is a log jam right now at CMS because it has been sort of slow to have new folks coming in and folks-I know Elliot Fishman who has been with the waiver division is leaving I think next week. So these things take time to write the terms and conditions so we had heard very quickly but now we’ve heard slower but I would say in the next few months.

I guess I do want to make a radical suggestion that please don’t just cover the work requirement. I get a little frustrated about the amount of discourse on the work requirement. I think as a practical matter, I think the work requirement is a bad idea. I can go into why but I won’t at the moment in the interest of time.

Having said that, I think at the end of the day, it is sucking all of the oxygen out of the room and there are other really important issues that are not getting addressed and I am going to give one example.

Florida legislature, the house, just moved a bill a couple of weeks ago that literally this came out of nowhere. Okay, it was a managed care bill. They were doing things that they had kind of prepared and moved along. In like the middle of the night, the chair of the committee seemed to add a work requirement for-they don’t have expansion in Florida so sort of like who are you going to apply the work requirement to? Well, you’re going to apply it-apparently, he was going to apply it to the TANF parents there that are below 34% of poverty. So we are talking about homeless and near-homeless very poor parents. More dramatically, the bill includes premiums of $10 for every person on the program in Florida starting at 50% of poverty, $15 starting at 101% of poverty. There were no exclusions written into the language. Now maybe they are going to change it along the way.

This would-I would hazard to say this would throw off thousands if not hundreds of thousands of children from Florida’s Medicaid program. Children are half of the enrollees in Florida’s Medicaid program. Nobody talked about that. Everybody talked about the work requirement and this is what I mean when it is really important to think about some of these other kinds of issues that I mentioned in my sort of outline about ways in which enrollment will be explicitly limited or implicitly limited through things like premiums.

Audience Question: Can you give other examples?

Joan Alker: Of things to watch? Sure. So I think along with the premiums, other provisions that we have seen, one provision, which I find especially troubling, is something called the lockout. This is in Indiana’s proposal. It’s also being proposed in a few other states and it is-in Indiana right now, it is where you have premium and you don’t pay your premium, you miss the premium, and you are then locked out for six months although the state used to do twelve months.

So essentially what it is saying is if you miss your premium payment, which these are very vulnerable families living below the poverty line, these things happen, even if it was paid back, you’re still locked out.

Josh Archambault: If you are below the poverty level in Indiana, you are not locked out. You can only be locked out if you are above the poverty level.

Joan Alker: You’re right. It’s 100 to 138 but I believe there are efforts to apply that below the poverty level in other states coming and Indiana wants to go to twelve months and they also want to expand it to apply to failure to renew in a timely manner. So the lockout issue is getting bigger and bigger.

Josh Archambault: But again, this comes down to is this a welfare program or not and if you look at data from welfare programs, when sanctions-I call them sanctions-when the stricter sanction you have, typically the less frequently states use it. It’s counter-intuitive, but I think there is some thinking along those lines that if you have an actual penalty, then you will use it less and folks will follow through. If you believe that it is a helpful provision of leading to success in that program, however you are defining success, then if you have an actually penalty, and you will use it less is what the takeaway from the welfare side of things is. You might disagree with that. I’m just explaining the rationale for why these sorts of things exist and why they are implemented.

Joan Alker: In my view, the lock-out, which we’re seeing more and more of in different contexts is a very damaging policy to impose in a healthcare environment. It means that people who are falling on troubles or hard times for whatever reason are being forced to be uninsured for a period of time. Their conditions will worsen and will be more expensive. It is counter productive.

Josh Archambault: I think you are assuming that.

Trish Riley: But you have to get inside the lives of these families. The notion of personal responsibility, breaking the cycle of poverty, teaching new habits and the Indiana thing is kind of interesting because there are incentives if you-you don’t have to pay if you participate in a wellness program. You can argue that those are all commendable goals.

What you have to think about-I ran a subsidized health insurance program in Maine. These families, when the car breaks, there is no money to pay. They can’t go to work. The kinds of-the heating bill goes up. When you live on the edge, making a monthly payment every single month at the same time is really hard.

So the issue is even if you believe that these payments are important and they are parts of personal responsibilities, the reality of these lives is being able to make that payment on the tenth of every month when your rent check is due and when the car breaks down or something happens in the house or the kid is sick and needs prescriptions that aren’t covered, you can’t make the payment. It’s not that you don’t want to and it’s not that you can’t a couple of weeks later. So there is grace periods attached to many of these kinds of provisions and that is an administrative expense. So many states, what you’ll do if you see some kind of requirement, there is a grace period to pay up but then you have to manage the grace period.

Josh Archambault: I just want to suggest that you have to think about this a little bit more holistically. Giving homeless people Medicaid cards that only show up to the ER. I want folks to get access to care but I also want a homeless person to have a home first. So my point is, how you structure the program to get value in what you spend dollars on first and how people actually interact with the program-Ask Medicaid departments to ask for their ER utilization rates. It’s terrible. It’s terrible and there is a variety of reasons, and you know this so well, reasons why. So are we getting value?

Let’s not just make this a purely emotional argument, which look, I have had family members on Medicaid. This isn’t like some distant thing for me. But I also know that there is a lot of problems with this program and how it’s structured so for us to just say, “You tweak here, oh the world ends,” versus actually stepping back and saying, “Well, maybe we need to reprioritize. Maybe we do need to change dramatically the structure of the program for different people.” I think that’s a fair discussion to be had and we frequently don’t have that.

Marilyn Serafini: So Chris and then we will start to wrap up.

Audience Question: This goes back to some of the things that have already been said but it struck me listening to this last discussion, it really seems like there are sort of two different points that are being made. There is this point that it seems almost indisputable that you need to find some way to sort of look holistically at people’s live and to de-silo and this almost becomes sort of altruism and sort of a social policy debate but the problem, it seems like, in this Medicaid discussion is that that’s always coupled when people say, “Oh, let’s have these mega waivers,” that always needs to be coupled with, “And let’s cut 25%.” The question I guess I have is how do you find a way, maybe there is no way politically, how do you find a way to decouple those two conversations so that you can have sort of an everybody in discussion to do the kinds of tweaks you were just talking about without having people feel like, “Well wait a minute. If I sort of grant that we’re going to have these tweaks, I’m going to sort of make things more flexible, then I am in for, but we’re also going to cut the resources when states are already stretched, there is already this poverty program.” How do you decouple these two discussions?

Trish Riley: I think the waivers do. Look at Washington and Oregon particularly. They have very comprehensive waivers around these community care organizations where for the first time, they will be able to use Medicaid funds to fund some of the social determinants to deal with homelessness. So it’s a beginning step.

Medicaid can’t be the piggy bank for the social determinants of health. So it’s a beginning step and then the next step is, and I think Josh had a great idea, you need to end the silos federally of the housing agencies and the social supports that have fundamentally different rules and regulations about who is eligible for services. So you need to braid those funds in different ways and I think this administration might actually allow that to happen.

Marilyn Serafini: So let’s wrap up by just-I want to ask you all just about that because we have been talking about the states and the waivers and what the states can do because we didn’t pass this federal legislation but every time-I’ve heard so many times during this conversation, “But it depends on what the federal government does,” because that could change everything. So I’d love to know what all three of you know and are thinking about how we move forward on the federal front. Josh, you talked about the mega waivers and you said that that is something that Paul Ryan could support potentially. So what are you all hearing about, if we come back to another piece of legislation, are we talking about something that looks like the last piece of legislation, have we grown since then, have we moved beyond that? Where are we? Where do you think we’re going?

Josh Archambault: So, yeah, I think it’s going to look a lot-it’s going to move through the house in a very similar way that it looks now. There will be some more tweaks, probably not on the Medicaid side though because there is a very delicate balance from a financing standpoint and with tax reform coming, that relies somewhat on the Medicaid provisions. So I don’t think you can do much there.

The other thing to be aware of is that in the senate, you have more Republicans who are from non-expansion states as a percentage of their caucus than you have in the house, which is a 50/50 split. It is a different dynamic over there. I realize there are big differences between the chambers but I think it’s going to look pretty similar. I think the real discussion we’re all interested in is does the per capita cap proposal change and how does it change and there has already been some chatter on the senate side, a couple expansion state senators weighing in about it but not being overly specific about what they want. We’ve got some folks already saying I’m concerned about the growth of Medicaid so that will be pressure. So I’m not sure there is a clear path, as there frequently isn’t in the senate on what tweaks there are but it cant change much if they actually want it to pass in a timely manner and get to tax reform.

Joan Alker: So on the legislative side, I would say I am certainly not going to prognosticate on what is going to happen with the bill. I would agree with Josh. I don’t think the Medicaid provisions will change that much. I think the fundamental question when you’re thinking about Medicaid policy going forward is if we have a legislative change, we’re talking about huge cuts to Medicaid. If states are operating in a context where we don’t have a legislative change and they’re operating in the waiver world, then it’s a very different story because typically governors come and ask for more money and waivers, not less. So it’s just a whole different dynamic depending on whether you’re looking at a very significant cut and radical restructuring of financing legislature context versus the waiver.

I would just throw out to you CHIP is up. It needs to be extended by September 30th this year as Trish and I were discussing. That’s extremely late and unhelpful for states for it to happen that way. But the point is that’s something that congress must do. It is my hope that congress can move together in a bipartisan way to keep it separate from these other contentious issues like Medicaid, like the ACA and just do something-there is a lot of bipartisan support for CHIP so just do a clean and quite extension. I don’t know if we’re going to see that and whether or not the CHIP debate will become-also get enmeshed in these Medicaid issues we have been discussion.

Trish Riley: If it doesn’t happen in the summer, states will have no choice but to start to dis-enroll children because you can’t wait til October when the program-the funds end. You have to give notice.

Joan Alker: That’s right.

Trish Riley: You have to deal with your contracts. You have lots of work to do to unbundle a program if it is-so waiting is not an option to states that late. I can’t predict-I am a statey. This is-it’s just confusing. I think states want certainty. It’s just, “Decide and give us some kind of certainty about where we’re headed congressionally,” because it’s just too frustrating and it makes it really difficult for states to negotiate it with their legislatures over budgets and to try to plan the programs in a place with such gross uncertainty. But I do think we can expect states and the administration to be creative and active in the waiver realm and we’ll see significant action there I suspect.

Marilyn Serafini: All right. So two quick things. First of all, in your packet on the right side, you have an expert’s list that tells you how to contact our speakers today and it also has a list of other experts if you would like to follow up. Also, you have a little blue sheet. We make this evaluation as short and painless as we possibly can and we really do look at it to see who you want to hear from and what topics you would like us to bring to you in these discussions. We will continue these discussions thanks to Ted Giovanis, the JKTG Foundation. So be on the lookout for more advisories from us.

Thank you so much to our panel today for a really, really rich and helpful discussion and we realize we just scratched the surface so more to come. Thank you everybody and thank you so much for being here.