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  • Washington Highlights

    MACPAC Discusses Implications of Medicaid Proposals in AHCA and Early Findings on Section 1115 Waivers

    Len Marquez, Senior Director, Government Relations

    The Medicaid and CHIP Payment and Access Commission (MACPAC) Apr. 20-21 met to examine how a limited number of states used Section 1115 waivers to expand Medicaid and to discuss the implications of the Medicaid reforms proposed in the American Health Care Act (AHCA, H.R. 1628).

    MACPAC staff discussed preliminary findings from seven states (Arizona, Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire) that were granted Section 1115 waivers under the Obama Administration to modify their premium and cost-sharing structures. The commission examined the impact of premium and cost-sharing structures, healthy behavior incentives, and premium assistance on beneficiary behavior and affordability. Among the findings were the following:

    • Although beneficiaries generally found premiums and cost sharing affordable, changes to premium and cost-sharing structures have not significantly altered beneficiary behavior;

    • Beneficiaries’ understanding of health savings account-like programs and healthy behavior incentive structures is mixed and varies among states; and 

    • Premium assistance enrollees in Iowa were less likely than Medicaid state plan enrollees to report a usual source of care and more likely to have a gap in coverage of a month or longer when switching plans, an important consideration for continuity of coverage requirements.

    • Commissioners stated that more evaluation is needed as data continues to be collected and states should assess design elements based on health needs of their state populations.

    MACPAC staff also provided an overview of the Medicaid provisions in the AHCA and the effect of enrollment mix on expansion and non-expansion states. When fiscal year (FY) 2016 spending per enrollee is trended forward, MACPAC staff found that non-expansion states would receive 1.4 percent less than actual FY 2019 spending and expansion states would receive 2.4 percent higher than actual FY 2019 spending due to the decrease in the new adult enrollee group under the proposed law. Even if these changes are not enacted through legislation, changes to the Medicaid program are possible through regulatory or administrative actions.

    The commissioners also discussed their previous and future work examining value based payment and delivery system reform. Almost all states are implementing an initiative in this space, including accountable care organizations (ACOs), patient-centered medical homes (PCMH), or a delivery system reform incentive payment (DSRIP) program. DSRIP programs include supplemental payments to providers, which then must meet certain performance metrics.

    While states have been able to achieve these reforms through existing Medicaid authorities, they face challenges in accessing necessary capital and building data infrastructure. MACPAC staff have reviewed seven DSRIP and similar programs, and noted that the financial, implementation, and evaluation aspects were challenging, and that there is concern regarding the sustainability of these programs. Commissioners noted that it was too early to dictate recommendations concerning DSRIPs, but that future discussion on identifying appropriate health outcomes under these programs was needed.