Wyoming Medicaid expansion plan faces headwinds

By Gregory Nickerson
— December 9, 2014

Four years into his term as Wyoming governor, Matt Mead (R) has endorsed a plan to expand Medicaid to cover an estimated 17,600 uninsured adults in the state.

The SHARE Plan would provide Medicaid coverage to those in the so-called “Medicaid Gap” who make less than 100 percent of the poverty level and thus do not qualify for insurance subsidies on Healthcare.gov. In exchange, the state’s plan would require patients to make a small copayment for services, take wellness evaluations, and provide access to workforce training and placement programs.

Those conditions are not a part of the federal government’s standard expansion proposal, but they are aimed at demanding some accountability among recipients. Adults who make between 100 percent and 138 percent of the poverty level would pay a $20 to $50 premium each month for similar coverage.

The plan comes after years of study and numerous votes by the state Legislature to reject Medicaid expansion — actions that matched Gov. Mead’s prior opposition to expansion. Preceding that, Gov. Mead joined a lawsuit seeking to overturn the Affordable Care Act in its entirety. Efforts to delay implementation of the ACA and resist Medicaid expansion have cost Wyoming $106 million in federal money in 2014 that would have provided additional Medicaid coverage to low-income adults, one estimate says.

“My view as I came into office is I thought the ACA was not only unconstitutional, but was bad policy,” Mead said. “It bit off too much. It was not well thought out. …. As I said in my State of the State address, we tried the lawsuit, we sued, we lost.”

“We are now in this place with roughly 17,000 people falling in the (Medicaid) gap. Many are working but can’t afford insurance. … As of now, the $80 (million) to $90 million that would have come to Wyoming has gone to other states. It is time for the state to make a decision on this.”

Sen. Charlie Scott (R-Casper), one of the key architects of Wyoming’s health care policy and an opponent of “traditional” Medicaid expansion, agrees that it’s time to act. “We need to do something because there are people in this population that are hurting,” Scott said. However, his plan for action involves replacing the SHARE plan with an alternative plan he’s helped design.

Lawmakers such as Scott opposed expansion in part because they disagreed with the Affordable Care Act, and distrust that the federal government will uphold its fiscal commitment to support the expanded program.

As the Legislature prepares to convene in January for its general session, those same arguments against Medicaid expansion remain, even as Mead supports the SHARE Plan.

“I think the Department of Health has put forward the best option,” Mead said. “For the state it would be the least expensive option. … We have fought this (the ACA). I agree this is not a good piece of legislation, but as I see where we are, I think we have to be realistic and say this is the law of the land and we need to go forward, and if the Legislature wants to come up with another plan I am open to that. I don’t think we can say to people who don’t have insurance and are working that we are going to do nothing.”

Mead believes the federal government has become more flexible in the types of Medicaid expansion programs they are willing to approve. That’s true, says Joan Alker of the Georgetown Health Policy Institute Center for Children and Families. At the same time, Alker believes Wyoming could have proposed it’s SHARE plan in 2012 and gotten a favorable response to its proposal for cost-sharing of premiums and copayments. Such elements had been part of state Medicaid agreements since before 2012.

“In general since the (2012) Supreme Court decision they are very interested in getting to ‘yes,’ so they have tried to be quite flexible and work with the states on new approaches to cost-sharing,” she said.

In addition to premiums and copayments, Wyoming’s proposed SHARE plan would include case management and voluntary work training and assistance, without attempting a strict work requirement that the Center for Medicaid Services has found unacceptable in other states.

The Wyoming Department of Health emphatically supports Medicaid expansion, calling it “the right course of action for Wyoming.” It further states that, “The SHARE Plan is the best deal for Wyoming.” The department expects the plan to be cost-neutral to state spending by shifting federal money away from existing programs that would no longer be needed under expanded Medicaid.

“The Economic Analysis Division of the state of Wyoming has taken a look at the impact of the injection of $100 to $120 million in new federal funding into the state, and they project that approximately 800 new jobs could be created as a result of the expansion,” Department of Health Director Tom Forslund said.

“Five hundred of these jobs would be directly related to the health care industry and then the remaining jobs would be the spinoff to other industries. So it has a significant economic benefit to the state’s economy as well as benefitting 17,000 plus people who need health care coverage.”

The Department of Health plans to work cooperatively with the Legislature no matter what course it chooses to pursue for Medicaid expansion, department spokeswoman Kim Deti said. Some national observers of the Medicaid expansion commended the SHARE Plan’s design.

“Overall it’s a fairly pragmatic approach to tailoring a state-specific plan for Wyoming to use the federal funding,” said Adam Searing, Senior Research Fellow at the Georgetown Health Policy Institute Center for Children and Families. “The Wyoming Department of Health used a data-driven analysis to look at the experience of expansion in other states …”

Others with the pro-expansion organization in Georgetown predicted that if the SHARE Plan were passed by the Wyoming Legislature, it could gain quick approval from CMS.

“As is in vogue with this round of Medicaid expansion proposals, this one will require a Section 1115 Medicaid waiver,” said Joan Alker, director of the Georgetown institute. “But unlike some recent submissions, Wyoming’s proposal looks to me to be very much in the ballpark for what federal CMS is likely to approve – though, as always, some details would need to be worked out.” For example, the state would need approval of a Section 1115 Medicaid Demonstration Waiver.

“We believe the CMS reception of the elements included in the SHARE plan proposed last month will be positive,” Deti said. “There are no particular areas of concern.”

If observers are correct that the SHARE plan contains no “poison pill” provisions that would cause CMS to reject it outright, it’s a strong sign that Gov. Mead and the Department of Health want the expansion to go forward.

However, the chance of the SHARE plan passing the Legislature remains in question. A bill draft released this morning will put the SHARE plan before the Joint Labor, Health, and Social Services Interim Committee, which meets Dec. 15-16 in Cheyenne. (See the meeting agenda here.) Gov. Mead’s favored plan stands a better chance of passing if a version of it comes from that committee.

“We’ll be interested to see what people say at the upcoming Labor meeting, but we are not expecting anything definitive to come out of it,” said Marguerite Herman, who represents the League of Women Voters in the Wyoming Coalition for Medicaid Solutions. “The committees are going to undergo a vast change in membership, and we look forward to hearing the thoughts of the new committee in January.”

“At this point there are aspects that we really like and we are interested to see how it plays through the session,” Herman said.” If it does get introduced, it will go through a lot of work in committee and on the floor and we are holding back making a definitive evaluation of it. There are a lot of moving parts and we’re just keeping our eye on, ‘How does it take care of the uninsured in Wyoming?’”

Perhaps the most outspoken opponent of the SHARE Plan is Sen. Scott, the rancher and veteran lawmaker who co-chairs the Labor committee. In July, Scott said he would only support  Medicaid expansion if it included provisions for health savings accounts, similar to a program in Indiana. In earlier discussions of a potential Medicaid expansion Scott said he would insist on a work requirement, but he has since indicated he has withdrawn that idea.

“(The SHARE plan) looks to me like a conventional Medicaid expansion plan warmed over,” Scott said. “They dressed it up with some minor details. … At its core, it does not have meaningful cost controls in it because it doesn’t have any meaningful utilization controls,” meaning incentives to keep patients away from habitual use of the most expensive types of care, like emergency rooms. “They talk about using copayments. In the standard Medicaid schedule, those are so trivial that providers don’t bother to collect them.”

Scott has made clear he won’t vote to move the SHARE plan forward, though he might use components of the plan. Instead, Scott supports an alternative plan, which is outlined in a draft bill that was released to the public this morning.

The draft bill would create a Medicaid expansion program that limits recipients’ usage with a set amount of money in health savings accounts (HSAs). Scott says that would encourage patients to budget their money, and provide the state with a way to keep costs under control.  The HSA draft bill includes enrollment in workforce placement programs for patients, but makes no requirement that they have a job.

“My point of view is that you can almost guarantee that the feds will renege on their promise to pay 90 percent of the cost,” Scott said. “You need a system that allows some kind of cost control so when the feds do renege, you can get through a period of low income (from minerals) with existing reserves, and avoid an increase in taxes.”

Scott said he believes some members of the Labor committee support expansion using health savings accounts, while some support the SHARE plan. He expects other committee members will oppose anything connected to the Affordable Care Act and vote “no” on every proposal.

Overall, he predicts a pure version of the SHARE plan would be unable to pass the full Legislature. “I don’t think I could sell that to the rest of the legislature if I wanted to,” he said.

If Scott’s alternative draft bill backing health savings accounts passes the Labor committee, he’s not sure it would pass the legislature either.

“A lot of members are so hostile to Obamacare that it will be a tough sell all around,” he said. He noted that many candidates won elections in districts where the only candidates on the ballot were Republicans who opposed Medicaid expansion. “Someone who votes for it is putting their reelection in jeopardy, and that makes it hard to pass.”

Rep. Elaine Harvey (R-Lovell), is reluctant to take a position on the SHARE plan, even though she is interested in the draft bill that would use health savings accounts, which the SHARE plan does not currently include. The federal government is wary of HSAs and hasn’t approved any as part of a Medicaid expansion.

Harvey says she’s unclear on what transpired in the conversations between the Dept. of Health and the federal Center for Medicare and Medicaid Services (CMS) in drafting the SHARE plan during the past few months. “I would like to know what their discussions were with CMS, and how much of it CMS would plan on accepting,” Harvey said. “At this point I am not fully sold on either plan.”

“Here is what I am sold on,” Harvey added. “We have a lot of hospitals that are operating on the edge and we need to do something with hospitals that creates an atmosphere of helping people up, instead of giving them a handout.”

Despite doubts among legislative leaders, support for Medicaid expansion has increased among Wyoming’s residents. A recent University of Wyoming poll found that while 70 percent of Wyomingites disapprove of the Affordable Care Act, 55 percent agree with expanding Medicaid.

Prospects still uncertain

The release of the SHARE plan bill puts the proposal in the hands of lawmakers, and specifically before the Labor Committee chaired by Scott and Harvey. The Department of Health cannot lobby for the plan, though it can provide information. It is unclear how far Gov. Mead is willing to exercise his clout to support the SHARE plan, particularly after his statements that he is open to alternate Medicaid plans created by lawmakers.

That leaves outside lobbyists and think tanks as the loudest groups supporting and opposing the SHARE plan. It’s uncertain how much sway these groups will have.

“We are pleased with where things are at in the moment,” said Neil Hilton with the Wyoming Hospital Association, which supports expanding Medicaid. “The overall tone and climate around the conversation is better than it has ever been.”

The Florida-based Foundation for Government Accountability, a conservative think tank, has launched a public relations campaign opposing Medicaid expansion in Wyoming. The group is hoping to fortify the positions of legislators who oppose Medicaid expansion, many of whom ran on that position in the 2014 elections.

It’s possible lawmakers could be receptive to Department of Health assertions that the plan would be cost-neutral to state revenue, generate some 800 jobs, provide coverage to 17,600 people, and add millions of dollars to Wyoming’s economy.

The Wyoming Hospital Association estimates that its members see about $200 million in uncompensated care annually, mostly from treating those who do not have health insurance. That cost is shifted to those who do have insurance or can pay cash. Expanding Medicaid would significantly reduce the amount of uncompensated care, and potentially lower the cost of health care for those with insurance.

“We are excited the (SHARE) plan is now on the table and certainly expect it to be brought forth in the 2015 session for full consideration,” Hilton said. “We have already lost time and dollars, and we will continue to lose time and dollars if we don’t act.”

Hilton’s group is interested in seeing Medicaid expansion implemented, whether that plan resembles the Healthy Indiana or the SHARE Plan, or something else, he said.

“We are not going to be in a position to split hairs over details that we like or don’t like,” Hilton said. “We are not going to let little details stand in the way of effectively getting some kind of a program put in place.”

Supporters and opponents, along with legislators and the governor, seem better informed about Medicaid expansion than they were a few years ago. Elected officials are primed for another round of debate, while some of Wyoming’s poorest residents wait for a resolution that would provide a reliable way to pay for their health care.

Federal regulators are also waiting to see what Wyoming does.

“Whether it is Healthy Indiana or take care Utah or SHARE in Wyoming, we are very eager to speak with the folks in Wyoming about what they would propose,” said Mike Fierberg, spokesman for the Denver Region Office of the Center for Medicaid and Medicare Services. He noted that any actual negotiations would take place with the CMS headquarters in Baltimore.

“I think, based on past experience, it is highly likely that what (Wyoming proposes) will need to be shaped in order to comport with federal laws and regulations, but we are happy to work with them.”

Resources:

° Healthy Indiana Plan 2.0

Bill Drafts:

— Gregory Nickerson is the government and policy reporter for WyoFile. He writes the Capitol Beat blog. Contact him at greg@wyofile.com or follow him on twitter @GregNickersonWY.

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