Honey, I shrunk the budget
As states grapple with proposed Medicaid cuts, Manatt Health has a new tool to help Medicaid directors model the financial impact on their states.
It’s Day 94 of the Trump administration, and the House Energy & Commerce Committee (E&C) is hard at work drafting reconciliation legislation that it hopes will yield at least $880 billion in federal savings, including substantial cuts to Medicaid. House leadership has promised members that any impacts to Medicaid funding would be in the form of policy changes to root out fraud, waste, and abuse, but a group of 13 moderate Congressional Republicans wrote to Speaker Johnson that they could not support legislation that included Medicaid funding cuts citing the impacts on their constituents.
Running the Numbers: The 50-State Impacts of Potential Medicaid Cuts
Over the last few months, we have dedicated several 80 Million articles to the $880 billion in Medicaid cuts under consideration in Congress, explaining the threat they pose to the program and the latest twists and turns in the budget reconciliation process. Today, we are all about the numbers. Drawing on Manatt Health’s 50-State Medicaid Financing Model and a new toolkit that we recently prepared for states in partnership with the Robert Wood Johnson Foundation funded State Health Value Strategies program, we explore what several key proposals to cut Medicaid would mean nationally and for each of the 50 states and D.C.
Before we dive into the results, here is what you should know about Manatt’s 50-State Medicaid Financing Model. The model uses publicly available data sources supplemented by Manatt research and Congressional Budget Office (CBO) projections to establish a “baseline” of how we expect Medicaid expenditures and enrollment to change over time under current law (that is, if Congress made no changes to Medicaid). We develop this baseline for each of the 50 states and D.C., and for each of five key Medicaid eligibility groups: seniors, people with disabilities, children, expansion adults and other adults. (For a detailed explanation of methodology, see Section 3, page 2 of the toolkit). We then assess what happens to expenditures and enrollment if any one of several proposals under consideration in Congress is adopted. Since we do not know how states will respond to any given proposal, we model a number of different scenarios for state responses, allowing states and stakeholders to determine what they think is most likely.
For the purposes of running the numbers, we look at four of the major proposals that seem most likely to advance through budget reconciliation, at least based on the latest news articles plus a touch of tea leaf reading.
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ICYMI: In Ambiguous Guidance, CMS Suggests Restrictions on Medicaid Coverage of Gender-Affirming Care for Youth
On April 11, the Centers for Medicare & Medicaid Services (CMS) issued guidance to state Medicaid directors implying that Medicaid programs may no longer cover gender-affirming medications and surgeries for youth. It’s the latest step by the Department of Health & Human Services (HHS) to implement President Trump’s January 28 executive order (EO), which directed agencies to prohibit access to gender-affirming care for transgender individuals under the age of 19.
The guidance does not expressly define any new mandates or prohibitions, but in an accompanying statement, CMS Administrator Dr. Mehmet Oz declared that “Medicaid dollars are not to be used for gender reassignment surgeries or hormone treatments in minors.” CMS has rarely defined concrete coverage exclusions without express statutory authorization.
As with prior HHS letters, CMS’ new guidance describes the Trump administration’s position that gender-affirming medications and surgery “lack reliable evidence of long-term benefits for minors, and for some children, these interventions are now known to cause long-term and irreparable harm.”
A significant minority of states cover gender-affirming care for youth. Faced with ambiguous CMS guidance, these states may choose to continue covering these services while awaiting additional clarity as to whether CMS intends to disallow federal payments (and if so, starting when and as to what age group of Medicaid enrollees) — or they may choose to challenge CMS’ guidance in court.
Keep reading at The 80 Million.
Louisiana’s new Health Secretary announced the state will use a University of Louisiana at Lafayette AI and data analysis tool to detect Medicaid fraud.
Michigan Gov. Gretchen Whitmer signed an executive order directing the state’s Department of Health and Human Services to prepare a report detailing how cuts to Medicaid funding might impact the state.
Missouri, Oklahoma, and South Dakota, the only three states in the Union that enshrined Medicaid expansion in their respective state Constitutions, face potential budget challenges if Congress were to cut Medicaid expansion funding. If that occurs, the three states would be required to find alternative funding sources to make up for the lack of federal dollars.
Manatt is hosting a webinar with Dr. Monica Soni, chief medical officer of Covered California, on population health April 28. Register here.
Status of State Medicaid Expansion Decisions – Kaiser Family Foundation
Florida Health Centers Win Medicaid Funding Fight With State - Bloomberg
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