Trump’s administration has an unending war on Medicaid

September 2018

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Throughout his presidential bid, Donald Trump promised not to cut Medicaid — a source of public health insurance for millions of people — including his own supporters.

But the president became the most prominent booster of the congressional effort to repeal and replace the Affordable Care Act, which included a virtual end to Medicaid as it has existed for over 50 years, despite the fact that the program covers over 70 million children and adults.

When the legislative battering finally ended, the administration turned to Section 1115 of the Social Security Act.

Predating Medicaid’s enactment by three years, 1115 empowers the U.S. Department of Health and Human Services Secretary to test innovations in social security programs for the poor that are “likely to promote” the objectives of the program covered by the experiment.
As described for the court in a public health scholars amicus brief in Stewart v. Azar (D.D.C., 2018), Congress enacted 1115 to improve the performance of programs for the poor, not undermine them.

Despite both the express terms of 1115 and its underlying purpose, the administration has persisted in using this experimental authority to advance its stated position to the Governors, while arguing that insuring poor adults through Medicaid — enabled by an act of Congress and adopted by 32 states and the District of Columbia — is contrary to public policy.

In November 2017, under the guise of an effort to “break the chains of poverty,” Centers for Medicare and Medicaid Services Administrator Seema Verma announced plans to permit states to terminate, withhold, or lock people out of Medicaid if they failed to meet “community engagement” requirements and other restrictions, such as escalating premiums and additional reporting rules.

On Jan. 11, 2018, CMS’ State Medicaid directors’ letter codified these policies and approvals began the next day. Kentucky became the first state approved, followed by Arkansas, New Hampshire and Indiana. More state proposals are pending.

The basis of approval was that work improves health, but no evidence was offered on this point. Not surprisingly, of course, there is evidence that healthy people work more, a very different matter.

But crucially, the administration offered no estimates of the number of people at risk of losing coverage, the number who actually would lose coverage, or the actual coverage gains that would be realized as a result of its claims regarding more work, rising income and access to employer coverage.

Nor did officials estimate the potential spillover impact of widespread coverage destabilization on children, other family members, community and safety net providers, or population health. In sum, the administration offered no explanation of how work experiments would – or would not — promote Medicaid’s central objective of insuring the poor and medically vulnerable.

In June, the court vacated the Kentucky approval in Stewart v. Azar (D.D.C), a decision specific to that state’s proposal. In a lengthy and thoughtful ruling, the court essentially concluded that the secretary exceeded his 1115 powers precisely because he never did what he is obligated to do — consider the coverage impact or how loss of coverage would promote Medicaid’s objectives. While recognizing the secretary’s discretion under 1115, the court emphasized that ignoring the legal obligations is not part of this broad grant of powers.

Rather than appealing the decision, the administration chose to reopen the public comment period for Kentucky along with the public comment period for Mississippi’s pending work application. What it hoped to learn is unclear; its public notice simply requested comments on decision and the issues raised by the court.

The latest reporting is that nearly 12,000 new comments have come in, overwhelmingly in opposition to a new approval. But the working assumption at this point is a new, quick approval and then back to court for Stewart, round two.

In the meantime, a new front has opened, with a second lawsuit filed against the administration over its approval of Arkansas work demonstration. The three plaintiffs are on the verge of losing their coverage because they cannot find enough work or because they lack computer access and the know-how needed to navigate an online, complex monthly reporting system. One early estimate is that a quarter of those subject to the state’s new requirements for keeping Medicaid are unable to meet them.

The administration likely will continue to move work demonstrations forward. But given the absence of evidence to justify them, expect more litigation.

Sara Rosenbaum is the Harold and Jane Hirsh professor of health law and policy at the George Washington University Milken Institute School of Public Health.