The Unwinding of Medicaid

Congress has recently passed a spending bill that will "unwind" a requirement for states to maintain continuous enrollment in Medicaid in order to receive additional federal pandemic funds. The policy shift is likely to have wide-reaching impacts on the healthcare system, with far more immediate impact on lower-income households. 

In this episode of CareTalk, John and David analyze the rapid growth of Medicaid and the decision to unwind it.

ABOUT CARETALK
CareTalk is a weekly podcast that provides an incisive, no B.S. view of the US healthcare industry. Join co-hosts John Driscoll (President U.S. Healthcare and EVP, Walgreens Boots Alliance) and David Williams (President, Health Business Group) as they debate the latest in US healthcare news, business and policy.

TOPICS:
(0:45) Why did Medicaid grow so much during the pandemic?
(3:45) What has been the impact of Medicaid's rapid growth?
(4:00) Why is the continuous coverage provision ending?
(6:00) What will happen to people currently on Medicaid?
(9:17) Are the states ready to deal with this?

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Chapters

• 0:45 Why did Medicaid grow so much during the pandemic?
• 3:45 What has been the impact of Medicaid's rapid growth?
• 4:00 Why is the continuous coverage provision ending?
• 6:00 What will happen to people currently on Medicaid?
• 9:17 Are the states ready to deal with this?

Transcript

David: 0:01

Did you know that Medicaid enrollment grew by a whopping 28% during the pandemic boosting the number? You would if

John: 0:09

you listen to Care Talk

David: 0:10

boosting the number of enrolls by 20 million, well hold onto your hats because much of that growth will be unwound starting on April Fool's Day. A k a John Driscoll Day, thanks to the Omnibus spending. Bill signed at the end of 2022. Welcome to Care Talk America's home for incisive debate about healthcare, business and policy. A talk rated show that is definitely not unwinding. I'm David Williams, president of Health Business Group.

John: 0:33

And I'm John Driscoll, the president of Walgreens Health. So David, if you were listening to your own podcast, you goes, we were talking about Medicaid expansion. What's the big

David: 0:44

deal here? I mean, I guess the question is, you know, why did Medicaid grow so much during the pandemic? There's the usual economic reasons. Right at the start of the pandemic, a lot of people lost their jobs. Uh, there was also Medicaid expansion in Nebraska, Missouri, Oklahoma. But the main reason John was the so-called continuous enrollment provisions in the Family First Coronavirus Response Act. Some people call it fka, I call it frea, but it prevented the states from disenrolling, anybody. And for that, the states got an extra 6.2 percentage point increase in the federal match rate to offset the higher cost

John: 1:14

slow down partner. So during the public health emergency where, um, unemployment went through the. and we needed to capture and cover as much of America as possible to protect the health of Americans. What happened?

David: 1:35

Well, what happened is a lot of people enrolled in Medicaid, but then nobody disenrolled, so it's sort of like a black hole, right? Everybody came in. and nothing was coming out. Usually there's a lot of churn in Medicaid. People come on, they come off. But there was just this big swelling, John, it's sort of like, you know, I won't give an anatomical analogy, but basically, well, stuff is coming in. It's not going

John: 1:55

out. So think about it in terms of Medicaid, which is the public's program. The, the, the public health program that covers the poor, uh, it's not Medicaid, which Medicare, which is for the elderly. It's a state and federal program. where the, the, the Feds pay about half of it, and we've got about 90 million people. in the country. I mean, it's, uh, in a, a massive number of people on Medicaid and just under 20 million, I think it's 19.8 of that 90 all joined during the public health emergency. And, and to your point, they have stayed enrolled, be, they're typically pretty high barriers and regular, uh, um, reconsiderations where you have to. uh, your status on Medicaid, which is you get there for two reasons, because either you are, you're poor and, and you don't have any health insurance or you're disabled. Uh, the disabled piece is of small percentage of the total, and so this massive, uh, increase in Medicaid.. Uh, but w and and it's, and it's true. I think it's, it's a 50 state phenomenon has been this, a, a, a pretty major investment in public health. And it, and actually to your point, lower churn, everybody covered. Ha ha. This is, this is I think, what I would consider a public health success. And frankly, when the economy craters and a lot of people are getting sick, I think it was really, it was, it was sound. Policy. It started under the Trump administration and it stayed under Biden. This is a bipartisan, massive expansion of public health spend that was really an investment in the Health of America at a time when we were all kind of worried. So that's how we got here. David. What's happening now?

David: 3:44

So what's happened is, you know, as a result of this large increase of people on Medicaid, the total percentage of people uninsured in the country. Down to 8.6%, which is the lowest it's been since the end of the Obama administration. So that's what's happened. But now what's gonna happen is the public health emergency is still in effect. However, the omnibus spending bill at the end of 2022 decoupled this continuous enrollment provision from the public health emergency. So starting in April, All the people that were on Medicaid, now, they are going to have to go through that process and be this sort of, this redetermination about whether they remain eligible and that could affect John about five to 15 million people. So it's a big deal.

John: 4:29

Well, I, I think that that, what's interesting is I don't think anybody's paying attention to it. I mean, it's the great sort of, uh, sucking sound of Medicaid shrink because we can't afford, I mean, what you need to do in a crisis isn't necessarily what you, what you should be doing without a crisis. I mean, the whole notion of checking whether you are actually one is still eligible based on income or work status does make a lot of sense. That's the way Medicaid was set.. I mean, if we are, we're very close to the end, end of the public health emergency. And also, to be fair, unemployment has fallen like Iraq. We actually have a lot more jobs than people. There's plenty of, uh, jobs available. I mean, if, if there's ever a time, I think the, the health system is stable while covid, COVID illnesses and deaths are up a little bit. It's a trivial fraction of it was, of what it was in 2020. We're, we're in a position, I think, to go back to sort of normal order here, but I, but I think when you think, start thinking about numbers of like five to 15 million people losing healthcare coverage, it's sort of shocking that there hasn't been more coverage about it, because it will, and just be clear, it'll affect every state in the.

David: 5:45

That's right, John. So I think the real question is, you know, is there gonna be some sort of chaos as a result of all this happening at the beginning of April? Now most people haven't been thinking about it, and even if health wants like, uh, uh, like us haven't been thinking about it. However, the states have started to think about it. And the way that the rule is designed is to try to avoid chaos. There is a transition period through the end of the. The states continue to get, uh, their boost in their so-called fmap that's a federal match rate. Well, just,

John: 6:10

just as long as they follow certain rules. Just like, let's just, just, just to be clear, while there was like a 20 to 30% increase in the number of people covered in Medicaid, um, by, in, in the States, the, the increase of spending wasn't just on the spending for the new members. It was really a generalized ramp. Of the total. Total dollars available in state Medicaid budgets. And, you know, the feds can't afford that. That was simply to, I think, create a, a clear on-ramp for all states, red and blue to get more money, but whatever you call it with your fancy highfalutin government acronyms, David, um, it was a lot of money and it's now going to be reduced. I, I think as of April one, correct?

David: 7:02

It is, but John, the match rate, uh, this, uh, Boost of the 6.2 percentage points, it declines over time, first to five and a half, and then down to one and a half percent toward the end of the year for states that that take steps, uh, in order to make the transition, uh, less chaotic. So there's a few things that are being done, John. Um, one is, you know, medic, people on Medicaid tend to move around a fair amount. And so states are making plans in order to update the mailing addresses, taking longer to do the reprocessing, following up with enrolls if they don't take action. And you know, we're in the information era now, John, so a lot can be done, uh, to streamline the renewal process. Now, you, you made fun of me last time. John, we talked general.

John: 7:44

I make, I make fun of you because you like, you wanna live in the

David: 7:47

paper. Well, I wanna live in the Latin era, John, cuz we talked about locum tenons last time. I, I got a new one for you, John. Ex-party renewals ex, how do you like ex parte ? You know, you sound like, uh, you sound like the guys from uh, buck Rub Bonzai. You know, John Big bk or a big booty, so I will call it Ex-Party Focus renewals focus. And what that means, John, is means one party doing something. So that means instead of hauling somebody in and making them share all their tax returns and W2 documents and so on, can verify eligibility through data sources they already have available like the state wage databases and disability information. And actually John 11 states already do more than half of the renewals in. Exparte ex parte way, but another 11 states do less than a quarter that way. So it's much more hassle for, uh, the recipients. And then I know you don't like, uh, the Magi John, but the Maggie Mod those, you've got some people that are, that

John: 8:44

get mostly I'm a big fan of the

David: 8:46

Magi. Okay, so that's modified adjustable, gross, not the man guy.. Yeah. Modified adjustable gross income. What that means is, That's the income test for Medicaid. It's income. Yeah, income. Most people get, uh, Medicaid based

John: 8:59

on that. Why highfalutin? There's six. Do you have a Latin word? Do you have a Latin word for way too complicated

David: 9:07

there, I, I don't have it, John. I have to look it up for, well, I, I'll, I'll bring it for the next episode. John, I'd just like to introduce one concept for, uh, procession here, but there are six states that actually do more than half of. Non-income, uh, Medicaid eligibility renewals based on ex-party approaches. And it's interesting, John, of those six states, you know, some like you would expect, like Massachusetts and Colorado are there, but also Florida and Indiana, which shows that this is actually, it's not bipartisan, but more of kind of a technocratic approach. If you can do what, it's more efficient for the. and you save money, you're more accurate, you're not wasting money. Um, and so I think there's opportunities there. Now, they can also get help John from others. The states can, and some are planning to do so. Mm-hmm. managed care organizations, community health centers, marketplace sisters, and even, you know, others, uh, can help out sisters. Anybody can help. Did you just say sisters should

John: 10:01

be helping? Sisters and brothers, like, what are you talking about us sisters? You're losing track here. Yeah.

David: 10:06

Us sisters. Us

John: 10:07

sisters. Like your sisters,

David: 10:08

your brothers. I don't have a sister, John Medicaid, a navigator, but John, you know, you could help out too. You could stand out in the corner and tell, Hey, you need a Medicaid redetermination. You could do it. John, why don't you sign up

John: 10:20

with one of the states? What's, what's, what's really important for people to think about while you're kind of meandering around the, the stage here on this on who can help, is that there are a lot of people. Our, our poor are unemployed, um, who aren't disabled, who are gonna be surprised by this, by this abrupt redetermined process. I mean, only 35 of the 50 states have actually published a plan. This is gonna start on April 1st, and I think that one of the things we want to call out is, is for managed care organizations or doctor's offices or whomever that community, community health centers hospital. Though those groups that are often, um, that have historically struggled with making sure that the services they're providing get covered, um, which haven't had to worry about that honestly, for the last few years, really lean into this process. Um, which I mean, the, I think, I think the Latin word for confusing is con fundo, which is you've, you've, you've, you've confused a great deal of people here, but David, but I think that, that, that, the simple fact is that. Third parties, parties other than the the covered eligible, a mother with kids or an unemployed. Uh, uh, uh, person, uh, kids on their own, um, can actually help make sure that those me members who should be on those on Medicaid get a chance to stay on it by making sure they lean in quickly to help those redeterminations. For folks who have many cases ongoing illness, and the reason they're on Medicaid and getting care is because they need to, and I think that this, this, this is coming up very quickly. It's a very big. and people can get help, and that, that's really, I think, the, the critical public health message, even though you've con funded a lot.

David: 12:13

Yeah. Well, John, I don't, I know my Latin, but I, I don't know my conjugation, so I won't try to do the, uh, the past tense on that one. But I will say you're right. I think you put your finger on how the states beyond kind of the bureaucracy can, can deal with this. There's a lot of others that are interested parties. These third parties used to say who. Wanna get paid, want people to have access. Uh, you named a a, a number of those. And some, many of the people who are, who are gonna have their redetermination done can stay on Medicaid. Others will be in the Obamacare exchanges, uh, or may have other coverage, even employer coverage that they're eligible for. And they're gonna need some help with the navigation to figure out what's the right approach on those. Obamacare exchanges. Many, even if they can't, Get, uh, they, they, they're not eligible for Medicaid. They'll have sign.

John: 12:56

Yeah. They may subsidies, they may not realize, they may not realize that they still may qualify for subsidies in Obamacare. You know, stepping back a second, we know that continuous insurance coverage leads to more contin continuity of care and better care. And it is particularly essential for vulnerable populations and people who are poor are disproportionately more likely. To get sick and not necessarily get care, um, to make sure they're continuously covered will create, I think, better health access and better health outcomes. So calling out the opportunity with the exchanges where tons of subsidies actually are available still is a really important. Recommendation, David. Finally, he came up with something that's simple and clear, which I appreciate.

David: 13:43

Well, good, John. Well, that's it for yet another episode of Care Talk. We may not be continuous, but we are consistent here every week. I'm David Williams, president of Health Business

John: 13:51

Group, and I'm John Driscoll, a president of Walgreens Health. If you'd like what you heard or you didn't, please subscribe on your favorite service.