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ACP Voices Opposition to Medicaid Changes

Advocate Masthead

Healthy Adult Opportunity plan allows states to apply for waivers to convert Medicaid funding in a block-grant approach

Feb. 21, 2020 (ACP) – The American College of Physicians is calling for prompt reversal of the Trump Administration's Healthy Adult Opportunity plan. The opt-in program allows states to convert part of their Medicaid funding to address the needs of adults under 65 who aren't eligible for Medicaid due to disability or the need for long-term care and for whom Medicaid coverage is optional.

To participate, states can submit a Section 1115 waiver for an aggregate payment (block grant) or a capped per-enrollee payment (per-capita cap). States that participate can obtain 25% to 50% of federal savings if spending is below the cap and quality performance benchmarks are met. In exchange for the capped funding, states may be granted exemptions from certain Medicaid requirements. Other very low-income parents, children, pregnant women, elderly adults and people eligible on the basis of a disability will not be negatively affected by the new plan, according to the U.S. Centers for Medicare & Medicaid Services.

It may sound good on paper, but Ryan Crowley, ACP senior associate of health policy, explains that both the block grant and per-capita cap options may limit the amount of federal funding that states would receive and make it difficult for states to meet the demand for coverage during economic downturns and natural disasters. “States would also be allowed to cut certain benefits, like prescription drug coverage,” he said. Instead, ACP believes that states would be better off with a straightforward Medicaid expansion that would ensure funding for coverage is available when patients need it most.

The new program could be detrimental to doctors. “If state Medicaid programs face financial pressure, physicians could see already low Medicaid payment rates drop even more,” Crowley said. “States could also choose to waive federal regulations that keep managed care organizations honest. The administration also continues to push mandatory work requirements for Medicaid, which divert money and attention away from patient care.” These requirements mandate that individuals work to be eligible for Medicaid, but the vast majority of Medicaid enrollees who are not working have a legitimate reason including being sick or disabled or taking care of a sick family member.

ACP President Dr. Robert McLean is also concerned that restricting the federal funding available to states may reduce payments to physicians under Medicaid and sabotage patient care. “Currently, many state Medicaid programs reimburse at much lower rates than Medicare and commercial payers,” he wrote in a statement. “Encouraging states to further reduce payments to physicians will have a particularly adverse impact on primary care physicians, making it more difficult for them to continue seeing Medicaid beneficiaries.”

The program will have a devastating downstream effect on patients too, McLean continued. “Medicaid programs across the country are vital in the effort to ensure that our nation's most vulnerable population has access to health coverage,” he said.

“ACP calls on the Centers for Medicare and Medicaid Services to reverse this guidance that would drastically weaken coverage under the Medicaid program for low-income adults and instead focus on policies that would strengthen it,” McLean wrote.

Seema Verma, CMS administrator, came out in defense of the plan in an op-ed in the Washington Post. The program “does not cut Medicaid funding,” she wrote. “This optional demonstration continues federal funding to states based on their historical spending with a reasonable growth rate.” She added that the plan allows for adjustments in the event of an economic downturn or public health emergency.

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Back to the February 21, 2020 issue of ACP Advocate