Simple but Not Easy

Medicaid waivers: the bigger health care fight to come

Jake Auchincloss Oct 9

Health care is the pivotal issue of the shutdown debate. In particular: enhanced premium tax credits for Affordable Care Act plans. The health insurance policy details are wearisomely complicated – and important.

But not as complicated and important as Medicaid waivers. These wonky waivers are the best chance Democrats have to govern well on health care during the Trump administration. They should be central to our health care agenda.

The waivers are formally called Section 1115 Demonstrations. They are state-by-state agreements with Washington that give state Medicaid agencies flexibility in how they deliver and pay for health care. More than 40 states are up for re-negotiation during the Trump administration.

Under the wrong terms of negotiation, there will be cuts and cruelty. Premiums for the middle class in group insurance markets will go up even more. Per-patient spending is already climbing by double-digit percentage rates. Health premiums are rising twice as fast as wages.

Under better terms, the negotiations could be a starting point to lower costs and reduce bureaucracy. Using Massachusetts as an example, I wrote recently for The Boston Globe about how state & federal Democrats can seize these waiver negotiations to deliver on better health care.

Here are excerpts:

President Trump’s One Big Beautiful Bill slashes at least $2 billion annually in federal funding for MassHealth [and] adds... eligibility paperwork that will kick hundreds of thousands of adults off coverage. This will raise emergency room wait times and insurance premiums by hundreds of dollars a month for all of us.

Rather than accept less money and more rules, MassHealth’s new [Section 1115] proposal should offer a radical deal:

1. MassHealth accepts an inflation-protected grant from Washington.

2. In return, MassHealth gets to make its own decisions about how to reduce costs and increase quality. And,

3. MassHealth gets bonus payments if its interventions reduce costs for Medicare, the federal health insurer for Americans over 65.

...

There’s risk, but the rewards are greater. MassHealth could deliver better care, particularly primary, behavioral, and elder services. And it could contain costs.

Freed from federal rules and bureaucracy, MassHealth could braid together benefits. Medicaid, welfare, food stamps, home-heating relief, and rental assistance all put federal dollars in reach of the same population. MassHealth could streamline eligibility and enrollment. It could laser focus on impact for children. It already insures 4 in 10 children in Massachusetts, so MassHealth is well-positioned to quarterback the full playbook of services that improve children’s health and wellness.

Fewer restrictions from Medicaid would also unlock pilot programs. MassHealth is the primary payer for mental health and addiction services in the state. Massachusetts is home to world-leading innovation in both...

MassHealth is already making strides in paying for value instead of volume. It is two years into a program in which it pays the state’s 17 accountable care organizations (ACOs) for patients’ total cost of care. ACOs are organizations led by doctors and other health care providers, and they are financially accountable for the quality and cost of the care. This experiment is meant to drive a shift away from fee-for-service medicine toward more investment in primary and preventive care, in particular... MassHealth could experiment and improve faster with more flexibility than the federal government allows now.

Some of those improvements will save Medicare money. Medicare Part A pays for hospital care for the over-65 population. Part B pays for outpatient treatment, like doctor visits or ambulance services. MassHealth pays for long-term services and supports (LTSS), either at home or in nursing facilities, for that same population. When MassHealth innovates with LTSS to reduce hospital visits, Medicare saves money. But MassHealth gets no share in those savings.

Massachusetts has always been at the cutting edge of health care. Democrats have always prioritized health care. Democrats in Massachusetts... can show the nation a better way on health care — just as we did with the Affordable Care Act — that delivers quality primary, behavioral, and elder care, at lower cost.