Medicaid Alert: How New Changes Will Affect America’s Healthcare Expenses

Medicaid plays a critical role in extending critical healthcare services to underprivileged Americans. According to recent data from Medicaid’s official website, more than 72 million Americans, including adults as well as children, receive health coverage through Medicaid and CHIP (Children’s Health Insurance Program).

Medicaid provides health coverage to the most vulnerable segments of the society, including pregnant women, children, economically weak families (as per the norms of the Affordable Care Act).

However, under the Trump administration, Medicaid is undergoing some -proposed- seismic changes, making it harder for states to fund Medicaid programs, making it tough for people to enroll, and introducing new work requirements to curb new enrollments, but at the same time, expanding coverage to add more beneficiaries.

Whether these changes are for the greater good or bad is an entirely different question, and we’ll let you decide that. Let’s find out how Medicaid is about to change under the new proposed rules.

What are the new proposed changes to Medicaid

Medicaid Expansion

2020 is a crucial year for states planning to adopt Medicaid Expansion as per the provisions of the Affordable Care Act. One must note that as many as 37 states have already adopted Medicaid Expansion. The primary intent behind the expansion is to offer health coverage to families below the poverty line, children, elderly, and individuals with special medical needs.

However, the Trump administration has made it slightly challenging for states to adopt Medicaid expansion by introducing “Block Grant” waivers. Under these waivers, the federal government will be able to cap federal spending on Medicaid, adding more fiscal pressure on states to fund their Medicaid programs. At the same time, these waivers come with new authorities and rules, giving states the authority to limit health coverage to many of the beneficiaries, citing one or the other eligibility rules.

Change in how states can fund Medicaid programs

Under the existing laws, states can use different financing options to fund their share of Medicaid expenses, including provider taxes, certified public expenditures (CPEs), and intergovernmental transfers (IGTs).

According to the proposed rule, the Medicaid Fiscal Accountability Regulation (MFAR), states can expect a series of technical changes in the way they finance Medicaid expenses, with the primary intent of boosting transparency and integrity of the program. Experts are opined that these rules will make it harder for states to finance their share of Medicaid expenses.

Introducing strict immigration rules preventing Medicaid enrollments

The Trump Administration announced a string of new immigration rules in 2019, dubbed under public charge rule, that could limit immigrants from applying for any of the state or federal run assistance programs including Medicaid. As per the proposed rules, DHS (Department of Homeland Security) officials will be able to reject immigration applications if the applicant has received any kind of assistance or is a potential candidate to receive such assistance, including Medicaid, in the future.

Ability to charge premiums for health coverage from BPL families

Multiple pieces of research indicate that low-income households are more likely to drop health cover if a premium is introduced for Medicaid. Under the new rules, states can take away coverage from adults who are unable to pay this premium. Wisconsin is one of the first states to charge a monthly $8 ($10) premium for Medicaid, and as a result, program enrollees were 12 percentage points less likely to maintain coverage for the entire year. A similar trend is expected across different states, especially those with a higher percentage of poor or underprivileged families, once the premium payment is made mandatory.

Introducing new work requirements for eligibility

The new proposed rules have set forth work requirements for Medicaid eligibility. As mentioned in the January 2018 guidelines, states have the right to take away health coverage if an adult fails to satisfy work requirements.

Arkansas, New Hampshire, and Kentucky are examples of states where thousands of people lost their health coverage because of these work requirements, either because they didn’t qualify or because they were unable to follow-up with the filing requirements. The intervention of a Federal Judge gave some respite to those who either lost or were likely to lose Medicaid coverage.

Understanding the implications of new proposed Medicaid rules

The new proposed rules have serious implications for Americans throughout the country. Here is what we expect to happen if all the proposed rules become law.

  • Added financial burden on states to fund Medicaid: Under the proposed rules, it’d become difficult for states to use their existing financing mechanisms for funding Medicaid costs, thereby limiting their ability to offer benefits to more individuals.

  • States likely to impose premiums for health coverage: Since the proposed rules give states the authority to charge a premium for health coverage or take away the coverage in case of non-payment, we’re more likely to Wisconsin-like results across the country.

  • Work requirements likely to widen coverage gap: The new work requirements will further widen the coverage gap going forward. Things could get even worse if the unemployment rate rises in the future.

  • More immigrants will be left out of Medicaid despite having a need: Immigrants will either opt-out of critical benefits, such as Medicaid or lose their chances of getting American citizenship.

Bottom Line

Medicaid is nothing short of a lifeline for underprivileged Americans, and the proposed rules will introduce some fundamental changes in the way Medicaid is structured.

What are your thoughts on the matter? Tell us in the comments section!


© 2019 by Jacob C Reeves, The Broke Broker.