As Coronavirus spreads in the US in the shadow of an election year, universal healthcare coverage has returned as a key issue in the 2020 election. Polls across the political spectrum show that healthcare is Americans’ top concern. Unfortunately, important issues — especially complex ones — often get distorted in political discussions. So it’s important for everyone concerned with healthcare in American to understand the basics of Medicaid and the role of Medicaid in American healthcare.
Medicaid has long stood in the shadow of its kin programs, Social Security and Medicare, as unseen as the people it was designed to protect: the most poor and vulnerable Americans. Structured as a federal-state partnership, Medicaid is administered by states, which have the flexibility — subject to federal standards — to determine who and what services are covered and how care delivery and payment models work. States are guaranteed federal matching dollars of at least 50 percent (higher for poorer states), without a cap, for qualified services provided to eligible enrollees.
Since Medicaid’s inception in 1965, the costs and complexity of healthcare have skyrocketed. As a result, programs have expanded beyond poor children, pregnant women, and people with disabilities to include supplemental coverage for nursing home residents, patients requiring long-term care, and children with significant disabilities in higher-income families. The Affordable Care Act (ACA) in 2010 expanded Medicaid even further.
Medicaid is a vital – and growing – part of our healthcare system, and few realize the extent of its impact across the nation. Some facts about Medicaid that may surprise many:
· More than 70 million Americans are covered by Medicaid – 10 million more than the number of people covered by Medicare and Medicare Advantage.
· More than half of all babies born in the U.S. are covered by Medicaid. Meaning that medical advances in cellular and genetic therapies which are emerging rapidly in the US will be considered and scrutinized by the Medicaid program.
· Nearly 80 percent of Medicaid recipients live in a family where someone works.
· In many states, Medicaid covers far more than doctor visits, hospital stays and prescriptions: think eyeglasses, dental care, physical therapy, wheelchairs, walkers, hearing aids and more.
· A recent Kaiser poll found that 71 percent of Americans have been covered by Medicaid themselves, had a child covered, or know a close friend or family member who was covered through the program.
Medicaid protects the health of 1 in 5 Americans. It is the default high-risk pool for the private insurance market — and a powerful engine that fuels more than 20 percent of the entire healthcare system, financing hospitals, community health centers, physicians, nursing homes, and the many jobs within them.
Medicaid programs are evolving along with the rest of our healthcare system, migrating toward value-based payment and care delivery models. States are seeking ways to improve the health and better meet the needs of beneficiaries. Reducing healthcare costs remains a key objective for many states, but other goals emphasize reducing fragmentation, improving access and quality, and supporting social needs that bear on the use of healthcare resources.
How do those eligible for Medicaid get coverage? Typically, through the same kinds of health plans that serve commercially insured Americans. Medicaid managed care programs are growing, presenting opportunities for providers to forge strategic partnerships offering high quality, cost-efficient care in the value-based care paradigm. This includes providing services to address social determinants of health — transportation, housing, food security — that benefit communities historically dependent on Medicaid in many ways related, but not limited to, health.
The Healthy Adult Opportunity
Additional changes and opportunities for change will continue to be on Medicaid’s horizon. One notable potential change is CMS’ Healthy Adult Opportunity (HAO). Announced in January 2020, the HAO is a new Section 1115 demonstration initiative that would allow states to shift toward capped Medicaid financing models with an opportunity for shared savings. A recent analysis estimates that states would need to generate up to 8 percent of total Medicaid savings to stay below an aggregate cap, or up to 6 percent under a per-capita cap, over the 5-year life of the demonstration.
States also could implement closed drug formularies, with a minimum coverage requirement of the greater of either one drug per class, or the same number of drugs in each category and class as a selected Essential Health Benefit (EHB) benchmark plan. Currently, states are required to cover virtually all drugs for Medicaid beneficiaries. The HAO plan would include protections to cover “substantially all” drugs for mental health (antipsychotics and antidepressants), HIV (antiretrovirals) and products treating opioid use disorder, consistent with Medicare Part D requirements.
Allowing states to set their own drug formularies and negotiate, like commercial plans do, with drug manufacturers could improve efficiencies, especially as Medicaid becomes increasingly integral to more Americans’ coverage. By offering states a share of the savings, the HAO plan incentivizes states to partner in the effort to reduce the mounting costs of healthcare. But states will also need to ensure that in doing so they are protecting Medicaid populations and enabling access to necessary medical treatment.
Moving Forward, Together
Medicaid is a vital safety net program, and in covering over 70 million Americans, is likely to be central aspect of the discussions around coverage expansion in the future. It also entails a delicate between the Federal government and states – so requires coordination to ensure that vulnerable Americans at risk of higher medical costs have strong access without undue eligibility requirements.
Getting this right is in all our interests and can especially be seen in times of public health emergencies such as the spread of the Coronavirus. We want all Americans to be able to access appropriate care, and ensuring that access is also strongly in our own best interests so that the medical care system can function properly.
The work of reforming healthcare lies with us — systems, providers, payers and government. It’s on us to build value-based partnerships into a robust, resilient system for patients. As we move into the 2020 election, we are being presented with yet another opportunity to move towards universal coverage. A strong Medicaid program is a key element of that outcome, regardless of politics.