Protecting Medicaid: Finding and Working with Allies

Protecting Medicaid: Finding and Working with Allies

Medicaid is squarely in the crosshairs of the incoming Trump administration and 119th Congress. With a simple majority vote, Republicans can make substantial changes to Medicaid using the budget reconciliation process. Past proposals again being discussed include radically restructuring Medicaid financing through block grants or per capita caps. Other proposals include reducing federal funding for Medicaid expansion and imposing work requirements. These proposals all lead to the same results – funding cuts and coverage losses.

With slim majorities in both the House and Senate and a two-year window before the mid-term elections in 2026, Republicans are expected to push for big changes in Medicaid in 2025. Protecting Medicaid may ultimately come down to finding support from just a few Members in the House and/or Senate who support Medicaid and the millions of enrollees who depend on it.

Health care advocates must prepare for the expected attacks. One key strategy is to reach out to allies of the Medicaid program, both traditional and nontraditional. These important Medicaid stakeholders have considerable influence in Congress and state government, and could be key in protecting Medicaid.

Managed care companies – More than two thirds of Medicaid enrollees nationally receive their health care services from managed care organizations (MCOs), which operate in forty-two states and the District of Columbia. The combined revenues of the top three Medicaid managed care companies totaled $181.8 billion in 2022. Sometimes, advocates and MCOs are at odds, for example over care denials. However, MCOs have also proven to be powerful allies on issues ranging from continuous eligibility to state adoption of Medicaid expansion. Centene, which operates Medicaid MCOs in thirty states, has already started lobbying Republicans to preserve federal health care programs.

Advocates should reach out to MCOs in their states to discuss the harms of Medicaid funding cuts, and start strategizing. Some advocates may already have effective working relationships with MCOs through their state Medicaid Advisory Committees. MCOs face not only a loss in enrollee and revenue amid cuts in Medicaid eligibility and services. The increase in the number of uninsured and underinsured persons destabilizes the broader health insurance market, increasing uncompensated care, emergency department use, and medical debt.

Health insurers have a strong presence in Congress and state capitols across the country. Their influence could be instrumental in defeating Medicaid funding cuts, often offered under the guise of “flexibility.”

School districts – Medicaid is an important source of funding for health care services provided in schools. For more than 30 years, Medicaid has paid for eligible school health services included in students’ Individualized Education Programs (IEP) or Individualized Family Service Plan (IFSP). According to a survey by the AASA, The School Superintendents Association, almost 70% of school districts use Medicaid to support the salaries of the health professionals who provide services for students. Schools also use Medicaid funding to provide assistive technology and to support transporting students with disabilities. Proposals to cut Medicaid funding could significantly impact local school districts that are already coping with budget constraints.

A study of the 2017 Republican proposals to impose Medicaid block grants or per-capita caps found that districts would lose much of their funding for Medicaid. The biggest impact would be felt by children with disabilities who rely on school-based services. Medicaid also pays for mental health supports for children, including crisis interventions responding to school shootings.

Cuts in federal Medicaid funding could lead localities to scale back other educational services and/or increase property taxes to help offset the funding loss. Advocates should reach out to their local school boards and superintendents to alert them of the looming threat to Medicaid funding. Concerns raised by local school districts can carry great weight with members of Congress who need to consider the community impact of federal Medicaid cuts.

Health care professionals – State medical societies and other health care provider groups are highly influential in state capitols and state congressional delegations. The American Medical Association (AMA), which coordinates with state affiliates, stated emphatically: “The AMA opposes caps on federal Medicaid funding, such as block grants, because they would increase the number of uninsured and undermine Medicaid’s role as an indispensable safety net.”

The American Academy of Pediatrics and its state affiliates have long opposed proposals to impose Medicaid funding cuts. The National Rural Health Association and American Hospital Association also opposed Medicaid block grants.

Advocates should reach out to their state medical societies and other health care professional organizations to urge them to oppose Medicaid funding cuts and share concerns with state and federal elected officials.

Governors and state insurance commissioners

Governors and state insurance commissioners often have significant influence with state congressional delegations. If these officials oppose proposals to cut Medicaid due to, for example, the impact of cuts on states’ budgets or health insurance rates, or at lease raise concerns, that could be enough to convince a Member of Congress or Senator to vote no.

For example, in 2017, Arizona’s Republican Governor Doug Ducey raised concerns with the Republican proposal to cap Medicaid funding, writing “…[T]his policy change will result in the single largest transfer of risk ever from the federal government to the states.” In fact, block grants and per capita caps actually give states less flexibility in their Medicaid programs by reducing federal funds and forcing states to make up the difference.

State insurance commissioners may share concerns that Medicaid funding cuts and coverage losses would increase the number of uninsured persons, leading to uncompensated care, increased emergency department use, and greater instability in the private insurance market. For example, Washington State’s Insurance Commissioner Mike Kreidler and Governor Jay Inslee wrote that reform proposals must “not cause our people to lose coverage and that will not destabilize our health insurance markets, raise premiums or drive up uncompensated care costs.”

State insurance regulators have also expressed concern that enhanced Premium Tax Credits (PTCs), which help subsidize health coverage through the ACA Marketplaces, are set to expire at the end of 2025. If Congress fails to extend more generous PTCs, premiums will rise significantly, and millions will lose insurance coverage. The combination of Medicaid cuts and ACA Marketplace coverage losses could upend state health insurance markets, with potentially catastrophic results.

Advocates should reach out to their Governors and State Insurance Commissioners. As one example, in 2016, over 120 Illinois advocacy organizations joined a sign on letter to Republican Governor Rauner underscoring the importance of Medicaid and opposing proposals to cut the program.

Corrections and law enforcement

Under the federal “inmate exclusion,” states cannot use federal Medicaid funds for health care services for adults and youth who are incarcerated. However, in 2018, Congress authorized the Centers for Medicare & CHIP Services (CMS) to issue guidance on using Section 1115 waivers to provide transition-related services to incarcerated individuals. States can provide enrollment assistance, case management, medication assisted treatment (MAT), behavioral health, and preventive care to persons before they are released, as well as a 30-day supply of prescribed drugs. To date, at least nineteen states have approved “re-entry” waivers while many more have waivers pending approval or in development.

The availability of Medicaid funding for re-entry services has led to an important potential ally in fight to save Medicaid – law enforcement:

  • In a 2021 letter to Congress, National Sheriffs’ Association President Sheriff Dave Mahoney stated that Medicaid services for returning citizens “is an important part of the continuum of care for those with medical needs. In the long run this will reduce recidivism and therefore ease budgetary burdens from the jail system. Our taxpayers deserve that.”
  • In comments supporting their state’s Section 1115 proposal, the Massachusetts’ Sheriffs’ Association wrote, “Expanding the health coverage for eligible incarcerated individuals can and will change lives.”
  • Vermont’s Chief of Staff for the Department of Corrections Isaac Dayno described Medicaid as “a very cost-efficient system as opposed to private, for-profit health care, which corrections systems have relied on.”

Advocates in states with approved or pending re-entry waivers should reach out to state and local law enforcement to alert them to the potential loss of federal funding if Congress cuts the Medicaid program. Law enforcement statements opposing Medicaid funding cuts could persuade key legislators to vote no.

Medicaid enrollees/disability rights advocates

Medicaid enrollees are the most important, and most effective voices in defending the program from funding cuts. In some states, Medicaid enrollees are actively organizing, such as the Nonviolent Medicaid Army. Disability rights activists, including ADAPT, were crucial in defending Medicaid during the last Republican attempt to cut the program. Other protests by HIV/AIDS activists and people with ALS brought visibility to the real life impact of Medicaid cuts. Those efforts were also bolstered by anti-poverty advocacy like the Poor People’s Campaign.

Medicaid enrollees and their caregivers can also share their stories of how important the program is. State advocacy groups can ethically collect stories to share with policymakers and the media. In addition, several national health advocacy have story collection projects, including Families USA and Community Catalyst.

Advocacy efforts to protect Medicaid should center the experiences of people enrolled in Medicaid, and their caregivers. Members of Congress return to their districts when Congress is in recess, often participating in town hall and other community events. These are prime opportunities where Medicaid enrollees and advocates can make their voices heard.

Saving the Medicaid program from draconian cuts will not happen by itself. It will take a concerted effort of enrollees, advocates, providers, and other stakeholders working together. Protect Medicaid!

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