States start unwinding Medicaid

Jun 15, 2023

By DANIEL PAYNE and KRISTA MAHR

03/31/2023 10:00 AM EDT

Presented by

With Megan Messerly, Megan R. Wilson and Carmen Paun

Starting in April, states can begin to cut Medicaid coverage for participants they deem no longer eligible for the program. | Lynne Sladky/AP Photo

CLEANING OUT THE ROLLS — Tomorrow marks the beginning of the end of the Medicaid continuous coverage requirement, Megan Messerly reports.

Five states — Arizona, Arkansas, Idaho, New Hampshire and South Dakota — plan to begin terminating coverage in April for some of the tens of millions of people who have remained covered under the low-income health insurance program during the pandemic. Fourteen more states will start terminating enrollees in May, followed by 20 in June and 10 in July. Oregon will be the last to start, in October.

CMS estimates that more than 15 million of the 92 million people enrolled in Medicaid will lose coverage throughout the process. Of the former, 7 million are expected to be eligible for the program but still lose their coverage because of what's known as "administrative churn," or bureaucratic hurdles that lead to lost coverage because of missed notices, incorrect paperwork or other reasons.

Another 8.6 million are projected to be ineligible and may need help connecting with employer-sponsored coverage or a plan on their state's health insurance exchange.

In preparing for the redetermination process, CMS is working with states to develop so-called mitigation plans and preempt problems that might arise. But Daniel Tsai, the deputy administrator and director of CMS’ Center for Medicaid and Children's Health Insurance Program Services, said that doesn't mean CMS won't hold states’ "feet to the fire."

"We’re going to be watching [the data] like a hawk," Tsai said. "We will not hesitate to use compliance in every lever that we have a statutory obligation to exercise when we are finding that, at the end of the day, enrollees are not being afforded the process that they are being entitled to."

Health care advocates are closely watching the process — which could go awry differently in each state. Workforce shortages, poorly written renewal notices, long call center wait times and a lack of accessibility for people who have disabilities or don't speak English are just a handful of factors that could complicate participants’ ability to renew.

But advocates’ efforts to monitor the process could be complicated because CMS doesn't expect to release its first unwinding data until the summer.

"There are a bunch of questions about the timeline of problems starting, being identified and then addressed by states or CMS," Elizabeth Edwards, a senior attorney with the National Health Law Program, told POLITICO.

WELCOME TO FRIDAY PULSE. You can put lipstick on a pig — and a Tyrannosaurus rex, apparently. The dinosaurs, often depicted with teeth sticking out of their closed mouths, actually had lips, paleontologists recently argued.

What other strange discoveries are on their way? Let us know at [email protected] and [email protected].

TODAY ON OUR PULSE CHECK PODCAST, host Megan Messerly talks with Alice Miranda Ollstein about the proposals that some Republican governors and lawmakers in staunchly conservative states have referred to as a "new pro-life agenda" for the post-Roe era — promoting sex education, government welfare and more birth control.

Some free preventive services covered by the Affordable Care Act, such as mammograms, could be on the line. | Getty / Getty Images

A BIG HIT TO THE ACA — A federal judge on Thursday struck down a key provision of the Affordable Care Act that required free preventive care, POLITICO's Alice Miranda Ollstein reports, jeopardizing free coverage of a wide range of preventive services, including mammograms, colonoscopies and mental health screenings for nearly 168 million people on employer health insurance and Obamacare's individual market.

The judge also ruled that the requirement to cover the HIV prevention drug PrEP, or pre-exposure prophylaxis, violated the religious rights of the employers and could not be enforced against them.

But that decision may be temporary, as many stakeholders expect an appeal in the near future.

"For over a decade, the Affordable Care Act has ensured that millions of Americans have access to critical preventative health care," a Justice Department spokesperson said in a statement. "We’re currently reviewing the Court's decision and will be assessing our options."

Still, patient advocates attacked the ruling as overreaching and putting Americans’ health at risk.

The president of America's Health Insurance Plans responded to the ruling as well, saying, "Americans should have peace of mind there will be no immediate disruption in care or coverage."

PBMS IN THE SENATE — The Senate HELP Committee, led by Sen. Bernie Sanders (I-Vt.), plans to crack down on pharmacy benefit managers — the latest in a string of hits the industry is taking from Capitol Hill, Megan R. Wilson reports.

Megan confirmed that Sanders and the panel's ranking member, Sen. Bill Cassidy (R-La.), plan to hold a hearing on PBMs, the pharmaceutical middlemen that negotiate drug discounts with drugmakers and design prescription drug benefits for health plans. But what will come from that hearing is still unclear — raising more questions among Capitol Hill staff and lobbyists who work on the issue.

Congress has pondered several PBM measures over the last several years, but it's unclear whether any of them could be a foundation for what policymakers will consider. Sanders’ office didn't respond to a request for comment about the plans, and Cassidy's office simply confirmed the hearing would happen. The Senate is in recess until April 17.

The news comes as the Senate Finance Committee held a hearing about PBMs on Thursday, with members of each party taking shots at the industry. PBMs, which blame drugmakers for high prices, are also up against oversight and bipartisan legislative action in the House.

A message from PhRMA:

‘A DIFFERENT WAY OF DELIVERING HEALTH CARE’ — What can be considered a health care expense? That's the question the Biden administration has been considering as it pushes states to use the Medicaid waiver process — which allows states to experiment with new types of Medicaid care — to expand health care coverage and access, reduce disparities, improve innovation and emphasize "whole-person care."

In line with that goal, CMS approved on Thursday New Jersey's plan to provide housing and nutrition benefits to certain Medicaid recipients, as initially reported by Megan Messerly. The move is the agency's first major approval since late last year when it started formally pushing states to consider policies similar to those it greenlit in Arizona, Arkansas, Massachusetts and Oregon.

"Ten years ago, the thought of Medicaid being able to move in this way was a discussion that many of us had and hoped for but seemed to be very distant," Daniel Tsai told POLITICO. "We are really looking for folks to think about a different way of delivering health care."

The administration hopes New Jersey will be one of many states to receive similar approvals. Seven other states — Maine, Montana, New York, North Carolina, Oregon, Washington and West Virginia — have pending waivers related to so-called social determinants of health, according to the Kaiser Family Foundation.

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WHAT NURSE SHORTAGE? National Nurses United, the country's largest union of registered nurses, was on Capitol Hill Thursday praising the reintroduction of a bill that would set national staffing requirements — and weighing in on what Congress should do about the health workforce.

Two of NNU's presidents, Deborah Burger and Jean Ross, told Pulse that hospitals themselves are manufacturing nurse shortages by hiring too few nurses and allowing dangerous working conditions.

NNU leaders argued there are enough nurses to go around — should working conditions improve and hospitals pay for additional staff.

Resolving health labor force issues are key for providers and Congress alike, as the Senate HELP Committee considers legislative solutions and hospitals argue there's potential for a serious economic risk.

Hospitals have disputed NNU's claims in their responses to HELP's request for information, suggesting the issue is largely driven by a shortage of health workers.

The dispute over the cause of the health workforce problems will be at the center of drafting a bill to address it.

A message from PhRMA:

PBMs control your health care. Pharmacy benefit managers (PBMs) decide if medicines get covered and what you pay, regardless of what your doctor prescribes. They say they want lower prices, yet they often deny or limit coverage of lower-cost generics and biosimilars, instead covering medicines with higher prices so they make more money. This business model allows PBM profits to soar and can lead to higher costs for everyone. What else are they hiding?

GAO RAISES FOREIGN ANIMAL RESEARCH CONCERNS — The National Institutes of Health should check whether foreign research facilities it funds follow U.S. or international animal welfare standards when experimenting on animals, the Government Accountability Office recommended in a report released Thursday.

The NIH relies on annual reports from funding recipients to verify compliance, but it doesn't verify the reliability of the information through a third party or direct visits, the GAO said. The NIH provided $2.2 billion in contracts or grants between 2011 and 2021 to foreign organizations for research involving animals, with most money going to Denmark, the Netherlands and the U.K., according to the report.

Why it matters: The NIH's funding of animal research in foreign laboratories has been under political scrutiny since the pandemic's beginning. The scrutiny has only intensified in the GOP-controlled House. Republicans are again investigating whether the pandemic started as a result of an accident at the Wuhan virology laboratory, which the NIH indirectly funded for research on bats and coronaviruses.

NPR reports on states getting opioid settlement cash — but not sharing how they spend it.

Stat reports on the White House's fuzzy math for its Covid-19 budget.

DON’T MISS POLITICO’S HEALTH CARE SUMMIT: The Covid-19 pandemic helped spur innovation in health care, from the wide adoption of telemedicine, health apps and online pharmacies to mRNA vaccines. But what will the next health care innovations look like? Join POLITICO on Wednesday June 7 for our Health Care Summit to explore how tech and innovation are transforming care and the challenges ahead for access and delivery in the United States. REGISTER NOW.