Trump’s good idea on Medicaid reform

This article originally appeared in the Reno Gazette-Journal.

Not all health care reform has to occur at the federal level — a point that the Trump administration seems to be embracing as federal efforts have stalled in Washington.

President Trump recently signaled his administration’s willingness to approve certain health care waivers for states — including those which seek to implement work requirements for Medicaid enrollees using what are known as “1115A waivers.”

Nevada policymakers should take notice of this common-sense and cost-saving option to bring some fiscal responsibility to the Medicaid program.

His administration’s encouragement that individual states enact in-state health care innovations follows a series of failed attempts by congressional Republicans to “repeal and replace” the Affordable Care Act (aka Obamacare), a long-echoed yet still unfulfilled conservative promise.

True, administrative tweaks to the ACA produced some minor policy victories last year — the termination of cost-sharing reduction payments, which subsidized insurers’ Obamacare losses, and the repeal of the individual mandate, to name two — but such tweaks hardly constitute substantive reform, especially when it comes to tackling the unsustainable and soaring costs of Medicaid.

Moreover, given the bleak prospect for meaningful health care legislation at the federal level in 2018, Trump’s willingness to allow states the flexibility to do their own reform is a promising development.

The use of 1115A waivers would be a big first step for Nevada.

Such waivers, if approved, can be used to exempt individual states from certain regulatory requirements regarding the administration of the Medicaid program.

Medicaid was originally intended to be a safety net for the nation’s most vulnerable populations — the elderly and the disabled. Over recent decades, however, the number of Medicaid enrollees has exploded as eligibility criteria has been broadened to include tens of millions of healthy, able-bodied Americans.

The Affordable Care Act, for example, expanded Medicaid coverage to every American earning less than 138 percent of the federal poverty line, or about $16,100 per year.

This meant that, overnight, the number of Nevadans eligible for Medicaid increased by hundreds of thousands — a burden which is wholly subsidized by taxpayers.

Today in Nevada, there are more than 600,000 people — about 20 percent of the state’s residents — enrolled in Medicaid at an annual per-capita cost of about $5,700. Federal dollars cover the majority of administrative costs, but Nevada’s burden is set to grow in future years.

Unless Nevadans are prepared to see their taxes hiked dramatically, changes to the status quo must occur.

recent study by the Foundation for Government Accountability highlights why implementing requirements that able-bodied Medicaid enrollees work, at least on a part-time basis, would be appropriate for states like Nevada.

According to the study, 52 percent of able-bodied Medicaid enrollees nationwide didn’t work a single hour in 2015, while only 16 percent worked full-time throughout the year. Similarly, 60 percent of Nevadans who gained Medicaid coverage via the ACA expansion didn’t work at all during 2015.

Together, these data indicate that hundreds of thousands of able-bodied Nevadans receive Medicaid coverage without having to work. That’s a great bargain for them, but a horrible one for taxpayers.

Thus, the implementation of Medicaid work requirements would serve two distinct yet complementary functions:

First, it would reduce the taxpayer burden of administering the program through voluntary attrition of those who refuse to work.

Second, it would shore-up Nevada’s labor force participation — which has been hovering around historic lows — as unemployed enrollees return to the labor market for the purpose of maintaining their Medicaid coverage.

Implementing work requirements for able-bodied Medicaid enrollees presents a win-win opportunity for Nevadans — one that could produce “yuuuuge” results if state policymakers take advantage of Trump’s guidance.


Daniel Honchariw is a policy analyst at NPRI. For more on this topic, be sure to read the just-released study from NPRI.