This Week’s Dose: The House of Representatives returned from recess to continue work on legislation to address surprise medical bills and high drug costs, while the Administration unveiled a proposal to let states opt for Medicaid block grants. The Senate remained busy with impeachment proceedings.
House Leadership Remains Focused on Reaching Surprise Billing and Drug Pricing Deals.
Administration Announced Medicaid Block Grant Proposal. The initiative, called the Healthy Adult Opportunity (HAO) initiative, would allow states to submit a Section 1115 waiver to implement a block grant or per capita cap alternative for certain Medicaid populations while being granted increased flexibility to administer their Medicaid program. Many Republicans have long supported the idea of Medicaid block grants as a way to allow more state flexibility while controlling federal spending. Democrats traditionally worry that it could lead to reduced access and services. In the lead-up to the announcement, a group of House Democrats sent a letter to the Administration warning that “guidance providing states a roadmap to obtain Medicaid block grant waivers not only defies Congress and the federal Medicaid statute but if implemented, will threaten healthcare for millions of individuals.” Many legal experts have questioned whether the Centers for Medicare and Medicaid Services (CMS) has the authority to implement block grants, and the proposal is sure to face legal challenges if granted to any state. Ultimately, the initiative creates only an option for states to pursue. It is not a mandate, and states need to want to implement a block grant or per capita cap for this initiative to move forward. Oklahoma Governor Kevin Stitt (R) has already announced that his state plans to submit an HAO waiver. It remains to be seen which other states, specifically non-expansion states, pursue this initiative.
US Supreme Court Allowed Public Charge Rule to Move Forward. In a 5-4 opinion, the Supreme Court lifted a nationwide injunction issued by a federal district court in New York against the Administration’s public charge rule, allowing the policy to take effect while litigation continues in the lower courts. The rule allows immigration authorities to deny visas or green cards based on an individuals’ use of Medicaid or other public benefits. It was successfully challenged in several states by Medicaid advocates and immigrant rights groups, but in December 2019, federal appeals courts lifted injunctions issued by Washington, California, and Maryland. The Supreme Court’s decision to lift the remaining New York injunction means that the rule can now take effect almost everywhere (it remains blocked only in Illinois where a federal appeals court upheld a statewide injunction). In his concurring opinion, Justice Neil Gorsuch criticized federal judges who issue nationwide injunctions, potentially encouraging a broader challenge to the practice. It is also possible that the Supreme Court will eventually review the merits of the public charge rule, as challenges continue to work their way through the lower courts.
Georgia 1332 Waiver Is Likely to Face Legal Challenges If Approved. Two reports published by the left-leaning Brookings Institution and Center on Budget and Policy Priorities warn that Georgia’s recent Section 1332 waiver application is illegal because it would limit access to affordable health insurance as guaranteed by Affordable Care Act (ACA). The waiver would allow the state to transition from the federal exchange to a system where consumers would enroll in coverage through private web brokers or directly with insurance carriers. The waiver would also replace the premium tax credits and cost sharing reductions established by the ACA with a state-run financial assistance program, and allow Georgia to cap the total amount of financial assistance that residents could receive. Finally, the waiver would create a new type of plan, called non-qualified health plans, which can impose higher out-of-pocket expenses. The Georgia waiver would be the first Section 1332 waiver approved under relaxed guidance that the Trump Administration issued in 2018. However, the reports suggest that the waiver application fails to meet the standards of the Trump Administration guidance, as well as being illegal under the ACA. CMS has been aggressive in its support of state Medicaid and health insurance waivers under the Trump Administration and has frequently pursued policies, such as Medicaid work requirements, in spite of legal challenges. If the Georgia waiver is approved, other Republican-led states may seek similar permissions despite the inevitable legal battles. CMS is expected to issue a decision in early February.
Next Week’s Diagnosis: The House Energy and Commerce Oversight and Investigations Subcommittee will hold a hearing on e-cigarette manufacturers’ impact on public health, and the House Ways and Means Health Subcommittee will hold a hearing on overcoming pharmaceutical barriers to drug development. Although the Senate had planned to return to regular session next week, the possibility of witnesses being called to testify in President Trump’s impeachment trial means the process could continue.
To subscribe to the McDermottPlus Check-Up, please contact Jennifer Randles