Medicaid Plans Urge Continued Funding For Program in Letter to Senate

26 Jun Medicaid Plans Urge Continued Funding For Program in Letter to Senate

The newly released Senate health care plan, if passed, would drastically scale back Medicaid funding. This would decimate the program that provides healthcare to a large portion of the population. Reforming the program is vital; however, the recent proposal has brought the health insurance industry to their feet. Leaders in the industry have submitted a joint letter to the Senate imploring them to reconsider their plan for funding Medicaid. The letter requests that Senators carefully consider the consequences of drastically modifying Medicaid funding. CEO’s from the countries largest Medicaid plans signed the letter. They argue that the ACA, along with its underlying structure to finance Medicaid, should be changed in ways that encourage savings instead of cutting funding to the states.

“This year’s discussion began with a focus on the ACA’s individual insurance market, but current healthcare proposals go further and do not enact meaningful, needed repairs to the ACA,” the letter says.

“However, our primary concerns lie in the impacts these policies will have on the 74 million low-income, disabled and elderly Americans whose healthcare coverage through Medicaid rests in the hands of the Senate as you craft new legislation and policy options.”

Instead of the funding cuts under consideration, the letter urges Senators to incorporate other possibilities to maintain access to quality care:

• Reduce regulation to increase efficiency
• Waiver flexibility for states
• Restructure the pharmacy program
• Value-based pricing
• Alternative payment methods for healthcare providers based on population
• Flexibility in utilizing Medicaid funds
• Consolidation of administration and benefit design for the dual-eligible

These health plan leaders universally support Medicaid reform, but they are united in opposition to the current proposal from the Senate.

“We are not advocating to maintain the status quo; rather we are advocating for meaningful Medicaid reform,” the letter says.

The letter recognizes that the policies currently being deliberated in Congress, the federal government would institute a limit on the funding it would offer to states each year starting in 2020, and in place of actuarial calculations the government would use 2016 Medicaid costs trended forward by the Medical Consumer Price Index. That approach is projected to diminish the federal share of Medicaid funding by more than $800 billion over 10 years, amounting to a 25% shortfall in covering the actual cost of Medicaid.

“While this may appear positive from an immediate budgetary perspective, these amounts spell deep cuts, not state flexibilities, in Medicaid. There are no hidden efficiencies that states can use to address gaps of this magnitude without harming beneficiaries or imposing undue burden to our health care system and all U.S. taxpayers,” the letter says.

“Reducing the federal government’s share of Medicaid in this manner is not meaningful reform to bend the cost curve. It is simply an enormous cost shift to the states. It does nothing to address underlying drivers of the cost of care, like expensive new drugs and therapies, and an aging population living longer with disability.”

In order to compensate for the reduction in funding, States would have to increase taxes, reduce benefits, cut reimbursement, and eliminate some eligible beneficiaries.