Trump officials face decision on lifetime limits for Medicaid

The Trump administration is facing a crucial test of how much flexibility they are willing to give states to remake their Medicaid programs.

Federal officials have already given the green light to two states to impose work requirements on Medicaid recipients, and at least eight other states are hoping to follow.   

But a handful of other states want to go even further by putting a lifetime cap on how long people can be enrolled in the Medicaid program.

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No state has ever put a limit on how long a person can receive Medicaid benefits. But given that the Trump administration has already shown a willingness to approve conservative policies like work requirements, premiums and lockout periods for Medicaid, many experts and advocates think lifetime limits could also win approval.  

Critics of lifetime limits say they would fundamentally shift Medicaid from a health care safety net program for the poor and sick to a welfare program.

“It’s clear that [the administration] view[s] Medicaid not as a health insurance program. They are hopeful to get as many people off the program and off public assistance as possible,” said Jessica Schubel, a senior policy analyst at the Center on Budget and Policy Priorities.

The Trump administration has made state innovation a priority and has promised to fast-track Medicaid waivers, especially those that will impose work requirements on beneficiaries.

To date, five states — Maine, Arizona, Utah, Wisconsin and Kansas — have applied for waivers from the Department of Health and Human Services to put a cap on how long Medicaid beneficiaries can receive health benefits.

The waivers vary, but the proposals are generally tied to work requirements. Utah and Arizona both seek a maximum of five years eligibility. In Arizona, the five-year window would only apply when a beneficiary doesn’t meet the work requirement.

Utah’s request makes a deliberate link between benefit limits and welfare.

“This limit frames public healthcare coverage for adults as temporary assistance (similar to Temporary Assistance for Needy Families (TANF)), with the expectation that they do everything they can to help themselves before they lose coverage,” the application says.

The lifetime cap proposals reflect the administration’s view that only the “able-bodied” will be impacted. In all the requests, children, pregnant women and people with disabilities would be exempt from coverage limits.

The Department of Health and Human Services doesn’t comment on outstanding waiver requests, but Seema Verma, administrator of the Centers for Medicare and Medicaid Services, has made clear her view that Medicaid should only be for the most vulnerable citizens.

“True compassion is lifting Americans most in need out of difficult circumstances,” Verma said in a recent Washington Post column.

“This administration stands for a policy that makes Medicaid a path out of poverty by empowering states to tailor programs that meet the unique needs of their citizens,” she wrote.

Conservatives have long argued that spending on entitlement programs like Medicare, Medicaid and Social Security needs to be curtailed before the costs overwhelm the federal budget.

“The thought that a program designed for our most vulnerable citizens should be used as a vehicle to serve working age, able-bodied adults … does not make sense,” Verma said in a speech late last year.

Advocates promise a legal fight, and say lifetime limits go against the entire purpose of Medicaid.

“This strikes me as lawsuit bait. I suspect this could be a bridge too far,” said Jocelyn Guyer, a consultant with Manatt Health. “Work requirements are also a sweeping change, and this is a step beyond. This seems like it would be asking for more litigation and controversy and trouble.”

Advocates for Medicaid also argue that coverage limits would be a huge administrative burden, and that there’s no evidence they even work.

Lifetime limits “won’t take away the need for care,” said Jerry Vitti, CEO of Healthcare Financial, a health care advocacy company. “You’re not lifting someone up by lowering their health status.”

Advocates also argue that the administration is encouraging states to break the law. ObamaCare allowed states to expand Medicaid to anyone making up to 138 percent of the federal poverty level — about $16,600 this year.

Republicans believe the expansion discourages “able bodied” people from working because it provides free health care. Legislation that congressional Republicans pursued unsuccessfully last year would have repealed ObamaCare and rolled back the Medicaid expansion.

“This is clearly an attack on the [Medicaid expansion] population. What could not be done legislatively is being done administratively,” Vitti said.

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