Designing for dollars

By now, it is no surprise which states have said they won’t expand Medicaid as outlined under the Affordable Care Act. And while there are still a handful of states on the fence, it’s a given that states like Texas, Louisiana, Mississippi and Georgia, among others, were not going to budge.
But a funny thing has happened in these states on the long road to 2014. While many still oppose the idea of expanding Medicaid ideologically, they suddenly find themselves four-square in favor of getting their hands on the umpteen billion dollars HHS is making available to states to expand the insurance program for the poor.
In Texas, the state with the highest rate of uninsured in the nation, proponents of expansion remain somewhat hopeful that the state can design a unique program that would qualify for an HHS 1115 program waiver.
Ironically, of all the states in the country, Texas may be best prepared to move forward with the kind of expansion spelled out under ACA. As of this year, nearly 85 percent of all people in the Medicaid program there are enrolled in some form of managed care, a model that is being pursued in numerous states across the country as one method of getting a handle on escalating program costs.
Other states are also looking at alternate models for expanding Medicaid and one of the most controversial (and perhaps most innovative) ideas has come out of Arkansas. There, Democratic Gov. Mike Beebe has proposed setting up a system loosely based on the Medicare voucher system favored by Republicans and touted twice in House Budget Chairman Paul Ryan’s budget proposals.
The idea would be to provide vouchers to the population targeted for Medicaid expansion (those living between 100 percent and 133 percent of the federal poverty level) to buy subsidized private health insurance through the state health insurance exchange. Essentially the state would use Medicaid expansion funds to make up the difference of the federal subsidy and move these folks into private health plans. That should be privatization Nirvana to Republicans.
Well, not so fast.
Long-time Medicaid expansion opponent, South Carolina Medicaid director Tony Keck – among others – has essentially called into question the credibility of Republicans who support this idea.
“If Republicans are for this plan, I don’t know what exactly they were against before,” Keck told the Washington Post’s Wonkblog. “It covers the same number of people, with the same benefits and is more expensive. I have a hard time understanding what it is that some of these Republican legislators like about that.”
To come full circle, it’s probably the money and the fact that some states have always wanted more control over the Medicaid money provided by the federal government.
Of course, none of this kind of flexibility was supposed to exist until 2017, the date when federal funding for the expanded Medicaid population was set to slowly step away from 100 percent funding. But early in 2011, as Vermont set on it’s path to become a single-payer state, HHS indicated they would grant waivers for innovative solutions, like Vermont’s, for covering the uninsured.
To some, it may seem the original opponents to Medicaid expansion are simply using this willingness of HHS to be flexible as a way to save face. But those trying to find ways to cover the poor couldn’t care less.
As one state official recently put it: “I don’t care how coverage is extended, as long as it is. It needs to happen and needs to happen now.”