Red states find there’s no free pass on Medicaid changes from Trump

Red states are getting a reality check from the Trump administration in just how conservative they can remake their Medicaid programs.

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) rejected a request from Kansas to limit Medicaid eligibility to just three years.

CMS Administrator Seema Verma followed up on the Kansas decision by saying the administration will not allow any states to impose lifetime limits on Medicaid.

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“We’ve indicated that we would not approve lifetime limits and I think we’ve made that pretty clear to states,” Verma said last week at a Washington Post event on health care.

The Trump administration has made state innovation a priority and has promised to fast-track Medicaid waivers, especially those that will impose work requirements on beneficiaries.

Four states have been granted permission to do so — Arkansas, Kentucky, Indiana and New Hampshire — and six others have pending waivers.

States have also been allowed to impose lockout periods if beneficiaries can’t meet the work requirements and to charge higher premiums than the Obama administration allowed.

But the decision on lifetime limits marks the first time the administration completely rejected a policy favored by conservatives and shows there is no blank check for red states.

Verma never promised automatic approvals of conservative ideas, though some might have interpreted it that way, according to Jeff Myers, president and CEO of the Medicaid Health Plans of America.

He said it’s becoming clear that what the Trump administration wants is to construct policies that will make Medicaid beneficiaries self-sufficient, but that will not take away their benefits entirely.

Verma has long argued that promoting self-sufficiency is key to any changes states make to Medicaid. In explaining the decision to reject lifetime limits, Verma noted that states only temporarily suspend benefits if work requirements aren’t met.

“An individual may not comply with a requirement around cost-sharing and they could potentially lose coverage. But we want to make sure that there’s a pathway back into the program … if they’re compliant with the requirements,” Verma said last week.

Medicaid experts said officials in Kansas and other red states were mistaken if they thought they could get the Trump administration to approve changes just because they happen to be conservative.

“Contrary to some states’ expectations, there really is a waiver approval process,” said Joe Antos, a health policy expert at the American Enterprise Forum, a conservative think tank.

“Decisions will move more rapidly than they were … [but] that doesn’t mean approvals,” he said.

Matt Salo, executive director of the National Association of Medicaid Directors, said any time there’s a change in administration, states jockey to see what policies they can get approved.

“There’s a lot of pent-up interest in pursuing flexibility and changes that the Obama administration would not entertain, [but] I don’t think anyone thought it was a blank check, do whatever you want,” Salo said.

The administration has yet to make a decision on other conservative wish list policies, such as Wisconsin’s proposal for drug testing Medicaid recipients, and partial Medicaid expansion, which would let states expand coverage for only a fraction of the population and still receive full federal funding under ObamaCare.

Salo said federal officials want to make sure that any waivers they approve will survive the inevitable lawsuits that follow.

“People are pretty savvy … if you’re just going to approve something that gets torn down in the courts, you’re wasting everyone’s time,” Salo said. “The granting of a wish list that gets trounced doesn’t do any good, and even sets the agenda back somewhat. Everyone’s better off if there’s a real rationale.”

CMS recently declined to issue a decision on a request by Arkansas to roll back the eligibility levels for Medicaid beneficiaries. The agency also declined to rule on Kansas’s request to impose work requirements, which experts have speculated could be an implicit rejection of the proposals.

Unlike the other four states that have been approved, Kansas is not a Medicaid expansion state, and the administration has not approved work requirements in any nonexpansion states.

Kansas officials indicated they were still working with federal officials.

“While we will not be moving forward with lifetime caps, we are pleased that the Administration has been supportive of our efforts to include a work requirement in the 1115 waiver. This important provision will help improve outcomes and ensure that Kansans are empowered to achieve self-sufficiency,” Gov. Jeff Colyer (R) said in a statement.