With Some Flexibility, Medicaid’s Future Seems Bright in a Polarized America

By Rene Macapinlac

Medicaid reform is as contentious as the upcoming presidential election. Critics abound questioning the expansion’s impact on state budgets and Medicaid’s effectiveness in delivering quality care.

What will happen to Obamacare soon after Obama leaves office? Will states reject Medicaid expansion? Len M. Nichols, director of the Center for Health Policy Research and Ethics (CHPRE) and a professor of health policy at George Mason University, believes that will not be the case. 

Nichols is confident that states will see expansion for what it is -- good for the budget, and good for the health of their residents. 

Waivers, including section 1332 of the Affordable Care Act (ACA), will play a key role to states that have yet to expand Medicaid. Section 1332 of the ACA allows a state to apply for a waiver to opt out of certain portions of the ACA in order to engage in innovative strategies for providing access to high quality, affordable health insurance. It gives states the latitude to pursue their own kind of health reform.

Although it will not be until January 2017 until the first of these waivers can be filed, states are beginning to see the potential for designing a health care program that will work specifically for their state. They may modify the rules governing covered benefits and subsidies, or make changes to the requirement for maintaining minimum essential coverage.

Some states are also now beginning to implement innovative programs reforming how care is delivered and paid for.  Part of the broader Section 1115 Waiver programs, the Delivery System Reform Incentive Payment (DSRIP) provides states with significant funding that can be used to support hospitals and other providers in changing how they provide care to Medicaid beneficiaries.

Under DSRIP initiatives, funds to providers are tied to meeting performance milestones or metrics.  DSRIP waivers generally focus on infrastructure development and system redesign, and clinical outcome improvements and population-focused improvements. Funding for DSRIP initiatives varies across states, but it can be significant.  

In the days ahead, there will be negotiations between states and the federal government over policy and budget. Some states have become so politically polarized to the point that anything linked to Obamacare has been deemed ineffective by some residents. But there are facts to support the case for Medicaid expansion. 

A recent study found that in states that expanded Medicaid, insurance coverage increased for low-income adults. The study, published by the Annals of Internal Medicine, also found better healthcare usage and diagnosis rates for chronic diseases.

Nichols believes it is not impossible to find a common ground on the issue of Medicaid expansion. It will no doubt take a lot of effort, but it can be done. After all, history has shown us that despite contentious politics, we have always been able to make programs work.

Rene Macapinlac is the Director of Operations at ManagedCareBiz, an online resource for managed care professionals who need to stay up-to-date on industry news, analysis and commentary.