Forty-two states (plus DC) face budget shortfalls in fiscal year 2012, placing extraordinary pressure on state policymakers to cut public spending. As a result, many states are considering harmful Medicaid cuts: eliminating coverage for vulnerable Americans, restricting critical benefits like prescription drug coverage, imposing premiums on those who can't afford them, and slashing already-low provider reimbursement rates.
These cuts jeopardize the health and financial security of millions of seniors, people living with disabilities, children, and low-income parents that rely on Medicaid today. And the Affordable Care Act (ACA) elevates the importance of protecting state Medicaid programs by expanding Medicaid to 16 million new enrollees starting in 2014.
Fortunately, the ACA also includes new tools to help protect against Medicaid cuts. It's "Maintenance of Effort" (MOE) provision requires states to maintain their current eligibility criteria in Medicaid for adults until 2014 and for children until 2019. But the MOE doesn't offer complete protection: it has a major loophole for states that provide coverage for adults above 133 percent FPL, and it leaves the door open to provider rate cuts, new limits on optional benefits, and cost-sharing increases (click here for more detailed information on the MOE requirement).
To prevent harm from these types of Medicaid cuts and to preserve the Medicaid program for its 2014 expansion, defenders must persuade policymakers that:
This guide distills lessons from Medicaid defense work in a number of states and provides tools to fight cuts and introduce the most promising alternatives.
Building a case against Medicaid cuts
Four arguments demonstrate that Medicaid cuts are harmful and counterproductive:
Children, people with disabilities, and low-income seniors - groups that invoke sympathy - make up the majority of people served under Medicaid. Although there may be slightly less support for covering parents, the public generally recognizes that very low-income people cannot afford health care on their own. The public opposes the idea that people should be denied medical care because they are unable to pay.
Highlight the harm to Medicaid consumers:
Organizing efforts: Use consumer helplines and existing grassroots organizations to find consumers to speak about health care provided by Medicaid. Organize postcard campaigns with real life stories and pictures of individual consumers.
Media outreach: Target media outlets in areas where there are high levels of Medicaid participation, but also where employment may be sagging and working families may soon have to turn to public programs. Use press conferences or call reporters and news directors. Alternative media, such as digital story telling and recorded testimony, can be distributed on CD or uploaded to YouTube and other web-based distribution channels.
Testimony in public hearings and meetings with public officials: Testimony by individual consumers who have benefited from Medicaid provides a powerful message about the program.
Resources:
The New Mexico Center on Law and Poverty created a Facebook page to highlight videos featuring New Mexicans who rely on Medicaid.
Massachusetts postcards from Health Care for All's Medicaid defense campaign: Example 1 and Example 2
Op. Ed. about the importance of Medicaid by a woman living with disabilities in Rhode Island
Health Care Providers
Medicaid cuts often translate into job losses for nurses, technicians and other workers in facilities that serve Medicaid patients. Safety-net hospitals, community health centers, and nursing homes are major employers in many communities. In fact, 64 percent of nursing home residents rely on Medicaid to pay their long-term care bills. These organizations also provide critical services to the community that extend well beyond people enrolled in Medicaid. For instance, many safety-net hospitals also serve as major trauma centers for accident victims. Sometimes providers prefer to speak out on behalf of their patients who will be harmed, rather than point out the more direct impact on their own funding.
Show Medicaid cuts weaken providers:
Organizing efforts: Engage hospitals, community health centers, physicians groups, nurses associations, mental health providers and other health practitioners in a coalition. Seek common cause in protecting Medicaid payments to providers.
Media outreach: Create template op-eds and letters to the editor for hospital and community health leaders to place in local news outlets
Testimony in public hearings and meetings with public officials: Individual testimony and lobbying visits by doctors, nurses, hospital administrators and community health center staff can make a strong case that cuts will hurt these institutions and the broader community.
Create reports: Prepare reports on the importance of Medicaid funds to employment in specific communities or legislative districts.
Medicaid cuts hurt employers in two major ways. If employees and their families rely on Medicaid for insurance coverage, cuts to programs lead to uninsured workers. Without health insurance, workers are typically less healthy and therefore less productive. In addition, cuts to Medicaid result in shifting the costs of caring for the uninsured onto people with private insurance, leading to higher premiums.
Demonstrate Medicaid cuts harm employers:
Organizing efforts: Engage businesses to work as partners in supporting Medicaid through local Chambers of Commerce, small business organizations and progressive businesses. Demonstrate the critical health services Medicaid funds, and show how many people in the community rely on Medicaid. Find businesspeople to speak publicly about supporting Medicaid.
Media outreach: Employers are not the usual suspects in defending Medicaid. Opposition to cuts from employers will likely attract more attention from policymakers and the media. Train small business spokespeople for interviews and outreach.
Testimony in public hearings and meetings with public officials: Medicaid's relevance to businesses has more resonance when employers themselves argue the case, rather than advocates. Have credible business spokespeople provide testimony and meet with officials about the importance of Medicaid.
The Institute of Medicine has documented problems high rates of uninsurance cause for the entire community, including people with insurance. These problems include emergency department overcrowding, losses in productivity, and even higher premiums.
Organizing efforts: Engage grassroots groups that are working to build stronger communities, like faith-based organizers who are engaging religious congregations in improving their communities. Make the case for Medicaid's importance in the larger health system. Another tactic is to reach out to mayors and other local public officials concerned about their communities.
Media outreach: Organize letters to the editor and public events such as press conferences to elevate Medicaid as a critical part of the community safety net.
Testimony in public hearings and meetings with public officials: Show strong community support for the Medicaid program by bringing large numbers of people to the capitol through rallies and meetings.
Create reports: Commission reports or use reports from national groups to show the harm uninsurance causes for everyone. State-specific data can be particularly effective for use with elected officials and the media.
Medicaid cuts hurt the economy, are inefficient and ineffective
The federal government matches every dollar a state invests in its Medicaid program, at a minimum of a 1:1 ratio. This means that as states cut their Medicaid programs, they will lose more federal dollars. Available tools can help advocates demonstrate this harm.
Due to the Maintenance of Effort requirement passed in the Affordable Care Act, certain types of Medicaid cuts - such as most eligibility cuts and new barriers to enrollment - can put a state in jeopardy of loosing all of its federal matching dollars. Because states typically get more money from the federal government than they spend in state-only dollars on their Medicaid programs, eligibility cuts that violate the Maintenance of Effort requirements would leave a state far worse off fiscally than making no cuts at all.
In addition to forfeiting matching funds, the state loses tax revenue because economic activity promoted by federal health spending declines. At the same time, costs to the state and to private businesses rise as more people become uninsured and the cost of emergency health care for the newly uninsured is shifted to other payers. All-in-all, cutting public health programs at best saves pennies on the dollar, and at worst actually costs the state money. Medicaid cuts are an ineffective and inefficient approach to balancing state budgets.
Advocates have an opportunity in the current economic crisis to change the way policymakers think about managing Medicaid. Rather than periodically hitting the panic button, policymakers could move to a rational, progressive approach to sustaining the Medicaid program. Making these changes will likely require a sustained focus in both the short and long term.
Ensure that your state doesn't jeopardize federal funds by violating Maintenance of Effort (MOE) Requirements in the Affordable Care Act
Increase provider and HMO taxes, and use this revenue to bring more federal Medicaid matching funds to the state to support Medicaid and health care.
Increase tobacco taxes, alcohol taxes, or taxes on sweetened beverages, and earmark the revenue for Medicaid. This is a smart strategy especially where tobacco (or alcohol) taxes are low and federal matching rates are high.
Encourage policymakers to scour the state budget and identify current state services that could bring in additional federal matching payments.
States can strengthen Medicaid by improving quality in ways that also reduce costs. Strategies advocates can promote include:
Increase effective use of prescription drugs
Implement evidence-based drug selection and purchasing. A well-designed preferred drug list (PDL) uses the best evidence to design a recommended list and management tools, such as prior approval, to encourage provider adherence.
Evidence-supported prescriber education. Doctors and other prescribers need up-to-date information about theeffectiveness of different medications and alternative approaches (e.g talk therapy, exercise, etc.). "Academic detailing" programs in nine states provide effective consults and materials using social marketing principles. Another initiative in six states consults with providers to reduce inappropriate prescribing of psychotropic drugs to children.
Increase use of generic drugs. The above strategies result in increased use of generics. Generic substitution laws also make it easier for pharmacists to appropriately substitute a prescribed brand name drug with a generic. Information campaigns about the effectiveness of and savings from using generics can minimize the influence of brand name marketing on providers and consumers.
Ensure Medicaid is not overpaying for drugs.Implement policies to reimburse only for the actual and fair cost of drugs. A goal would be to pay pharmacies for actual acquisition cost plus a dispensing fee and minimize the use of inflated price benchmarks such as average wholesale price (AWP) that have led to overpayment of manufacturers and pharmacies. Require disclosure of prices by manufacturers and of contract terms of pharmacy benefit managers (PBMs) that may act as middlemen in some Medicaid systems and profit inappropriately.
Implement conflict of interest policies to shield Medicaid decision making and contracting bodies from industry influence (e.g. in pharmacy and therapeutics committees that design preferred drug lists).
Monitor industry ties with Medicaid providers through existing state disclosure laws (such as those in place in Minnesota, Massachusetts, Vermont), and court mandated industry disclosures. Starting in 2013, the ACA will provide another avenue for monitoring industry ties: it requires that pharmaceutical, device and biotech companies report all payments (and their purposes) made to physicians and teaching hospitals. These will be displayed on a public, searchable database, and can inform drug utilization review programs or other interventions.
Limit or eliminate payments for care that harms patients, such as preventable errors, hospital-acquired infections and preventable readmissions to hospitals. Starting July 1, 2012, the federal government will stop paying states for Medicaid services related to a limited set of health care-acquired conditions. States can go further by limiting payment for an even broader set of health care acquired conditions than the standard set by the federal government and for potentially preventable readmissions.
Offer incentives for improved quality and for reduction of racial and ethnic disparities in treatment and outcomes.
Seek federal match for language access services, including interpreters and translation of materials, which are required under federal law. This can help reduce medical errors caused by miscommunication and language barriers.
Watch for demonstration and pilot programs emerging from the federal Center for Medicare and Medicaid Innovation aimed at creating new ways of paying for quality care.
Expand the number of primary care doctors by increasing training and creating loan forgiveness programs
Increase reimbursement for primary care and management of all services that affect patients' health. The Affordable Care Act increases reimbursement for Medicaid primary care services to Medicare rates, but only for 2013 and 2014. Consumers will need to advocate for federal or state funds to maintain those rates beyond 2014.
Broaden the opportunities for nurse practitioners and physician assistants to serve as primary care providers
Create medical homes, central facilities that often coordinate care and provide a full range of services for members from preventive visits through hospitalization. The Affordable Care Act creates an opportunity for states to get enhanced federal dollars for setting up medical homes for especially frail Medicaid beneficiaries.
Expand use of community health workers as part of health care teams, as encouraged by the Affordable Care Act.
Provide more effective and better coordinated care for high cost and chronically ill beneficiaries
The majority of Medicaid costs are concentrated in a small proportion of people with chronic health problems, such as asthma, diabetes and behavioral health issues, who are often hospitalized or institutionalized due to lack of coordinated care and support in the community.
Create care delivery models that integrate care for people eligible for both state Medicaid and federal Medicare programs.
Expand care options for people with chronic illnesses through enhanced medical homes, which provide a central place for all care, from primary care visits and screening to more acute care services. The Affordable Care Act gives states the option of receiving enhanced federal matching dollars to create medical homes for beneficiaries with two or more chronic conditions.
Empower consumers to better manage their chronic illnesses through tools that help patients understand and weigh treatment options and through home monitoring of conditions.
Help Medicaid beneficiaries needing long-term care and supports to stay at home longer, through home- and community-based services. The Affordable Care Act creates new incentives for states to rebalance their Medicaid program's long-term care services towards community-based care and away from institutional care.
Watch for demonstration and pilot programs emerging from the federal Center for Medicare and Medicaid Innovation aimed at improving care for chronically ill beneficiaries.
Take advantage of new strategies coming from the Federal Coordinated Health Care Office to better align benefits for dually eligible beneficiaries.
Investments in a healthier population will pay dividends in reduced health spending and higher productivity in the future. Strategies include:
Reduce tobacco use and alcohol and sugar consumption through increased tobacco, alcohol, and sweetend beverage taxes, bans on tobacco sales at certain stores, and smoking cessation programs
Prevent HIV through comprehensive sex education in schools, increased pharmacy access to clean needles, and expanded education on HIV infection and treatment
Increase vaccination rates by offering education and access to vaccines at community centers, using mobile immunization clinics, and creating informational campaigns.
Get engaged in local programs to reduce chronic diseases by promoting healthy living and tackling the social and economic causes of poor health supported by Community Transformation Grants. The Affordable Care Act makes these grants available to state and local agencies, state or local nonprofits, national networks of community-based organizations, and Indian tribes.
Strengthen the public health infrastructure. Build up local health departments to be able to respond to issues such as pandemic illness, food and water contamination, and environmental health problems in the community.
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