Seema Verma is the administrator of the Centers for Medicare and Medicaid Services.
Unfortunately, it hasn’t taken long — even by Washington’s standards — for talking points with a dubious relationship to reality to start circulating among defenders of the status quo.
Shortly after the initiative’s release, Vice President Pence encountered an activist doctor at an Iowa diner who confidently claimed the administration had announced “cuts” to the Medicaid program. Nothing could be further from the truth. As the vice president rightly pointed out — no doubt remembering the 18 laborious months he spent navigating the labyrinthine federal waiver process as Indiana governor — states deserve the flexibility they need to deliver better care. That’s what HAO will deliver.
Let me be clear: Fearmongering notwithstanding, HAO does not cut Medicaid funding. This optional demonstration continues federal funding to states based on their historical spending with a reasonable growth rate.
Every state, either through the Children’s Health Insurance Program or an existing 1115 waiver, already operates portions of their programs under a fixed budget of federal funding. And in the case of unforeseen events outside of the state’s control — such as an economic downturn or public health emergency — the HAO guidance specifically allows for adjustments.
As always, there are those threatening to weaponize the legal system to preserve business as usual. The threat is little more than a thinly veiled attempt to intimidate governors into backing away from innovative solutions. In reality, the HAO largely draws from the same authorities that other administrations have used.
The alarming misinformation swirling about HAO is creating fear and uncertainty for millions of Medicaid beneficiaries who will never be affected. Those responsible for causing them needless worry should be ashamed. It’s worth taking some time to cut through the noise and talk about facts.
Medicaid is the largest or second-largest budget item for states, crowding out other priorities such as public safety, workforce development, infrastructure and education. It’s already the largest payer of long-term care, and as the baby boomer generation ages, costs for long-term care is projected to rise by 500 percent by 2050 — a looming crisis that threatens the viability of the program. We shouldn’t have to tell someone with a disability to get on a wait list for services because we’re diverting precious resources to cover someone who potentially doesn’t qualify. HAO can help states prioritize these finite dollars for those who need them most.
Yet for all that spending, health outcomes today remain mediocre: Slightly more than half of adults on Medicaid report that their health-care needs were met all the time; even the uninsured reported better health than those on Medicaid — discrepancies too striking to chalk up to Medicaid’s more vulnerable populations.
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The policy finally tackles structural problems in Medicaid that decades of prescriptive regulations have failed to solve and about which governors from both parties have complained. Under HAO, the administration is offering states the upfront flexibility to design a program that works for their state’s unique needs, rather than being constrained by top-down dictates from Washington.
Subject to comprehensive minimum requirements, states would have the ability to make certain program adjustments in real-time without further federal negotiations. That might mean addressing chronic disease through prevention or focusing on treatment for substance-use disorders. As the vice president and other governors who have lived through today’s bureaucratic logjam can attest, these opportunities to improve recipients’ health — rather than endlessly negotiating with the federal government — are unprecedented and welcomed.
At the same time, we recognize that the federal government has a duty to hold states to high standards. HAO includes rigorous accountability that will ensure participating states are using their new flexibility to deliver results for beneficiaries by requiring a set of quality measures that are currently optional. Participating states would also be required to maintain the key federal due process and civil rights that beneficiaries have today, in addition to important minimum benefits, eligibility protections and limits on out-of-pocket expenses.
There are two final, important points that the prophets of doom consistently fail to convey. First, this is an optional opportunity; no state is required to participate. Second, HAO is available to states for an important but limited population: working-age adults who are not eligible on the basis of a disability and for whom Medicaid coverage is optional — currently about 15 million people. The other 56 million beneficiaries will not be directly affected.
Those who are railing against the Trump administration’s “cuts” to the Medicaid program are railing against a policy that doesn’t exist. We owe it to the millions of Americans for whom Medicaid is a lifeline to face its structural problems head-on — not to recycle stale “solutions” that have already failed. Medicaid recipients have waited long enough.