Trump officials draw a red line on state Medicaid cuts

The Trump administration has drawn a red line on Medicaid cuts. There are some proposals that the Centers for Medicare and Medicaid Services won’t approve.

In a letter on Monday, CMS Administrator Seema Verma told Kansas officials that her agency would not approve the state’s request to impose lifetime limits, which would have capped a person’s eligibility at three years, after which they could no longer be covered by the program.

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Verma noted that the administration had approved proposals by other states to cut off benefits for Medicaid enrollees only if they fail to meet certain work requirements.

”In every case, these incentive structures are designed to engage beneficiaries in ways that promote positive health and well-being,” she wrote, perhaps indicating that cutting off a person’s Medicaid for nothing other than the length of time they had been covered would not meet that standard.

Verma elaborated in a speech Monday to the American Hospital Association: “We seek to create a pathway out of poverty, but we also understand that people’s circumstances change, and we must ensure that our programs are sustainable and available to them when they need and qualify for them.”

The CMS decision to reject Kansas’s waiver is a very big deal: Lifetime limits have not gotten the same amount of attention as work requirements, but they would have signaled an equally important shift in Medicaid, away from an entitlement for all eligible Americans toward a shrinking program actively culling people from the rolls.

Even if work requirements are allowed, it matters that the administration is not going to let states to kick people off Medicaid simply because they have been on the program for a long time.

”I do think it is significant that CMS has decided to say no to one of the pending requests that cut people off of Medicaid,” Joan Alker, executive director at Georgetown University’s Center for Children and Families, told me.

Verma’s announcement also likely spells doom for similar proposals in Arizona and Utah, which sought to place a hard cap on how long people could be covered by Medicaid.

This wasn’t a given, after the administration opened the door for work requirements, which many progressives also saw as a violation of the core tenets of Medicaid.

”It’s a big deal. There was real uncertainty where the administration would come down and time limits would have a large impact on enrollment,” Eliot Fishman at Families USA, who oversaw Medicaid waivers under President Obama, said in an email.

Don’t be mistaken: The Trump administration’s willingness to permit states to impose work requirements, to end retroactive eligibility, etc., will still drive down enrollment and cut benefits. We also saw in Michigan last week how work requirements could disproportionately affect black beneficiaries, while rural white enrollees receive exemptions.

The CMS letter also did not speak to the Kansas request to institute a work requirement for parents with very low incomes — a situation that Alker has written could leave those recipients in a Catch-22.

If they don’t meet these requirements, they could lose their coverage. But if they do find work, they may end up making too much money to qualify for Medicaid in a state like Kansas, which has refused to expand Medicaid under Obamacare and therefore still only covers nonelderly, nondisabled parents who make very little money.

Nevertheless, this was a big day for Medicaid advocates. The Trump administration is not granting carte blanche for states to roll back Medicaid eligibility as much as they want. It sets an important precedent.

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