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September 21, 2023

Medicaid changes loom large for health care industry

Medicaid changes loom large for health care industry

Holly Fletcher | The Tennessean

The future of how Medicaid unfolds, and possible block grants or additional states choosing to expand programs, will be important to the health care industry in the coming years as the next administration and Congress pen the next wave of health care reform, analysts said Thursday at panel in Nashville.

Calls to repeal and replace the Affordable Care Act could evolve into a series of repairs and changes that come into place over the course of several years, according to health care equity analysts at a ‘Wall Street’s View on Prospects for the Health Care Industry’ panel hosted by the Nashville Health Care Council.

“We’ll have to see something because Republicans have made a commitment to their voter base,”  said Whit Mayo, managing director at Robert W. Baird.

But Medicaid is expected to remain a flashpoint as Democrat and Republican governors from around the country press the new Congress and President-elect Donald Trump to keep the ACA’s expansion in place.

Administering Medicaid programs around the country has been a growth area for a long time, said Chris Rigg, senior managed care and health care facilities analyst at Deutsche Bank. The states that proceeded with an expansion for people with earnings up to 138 percent of the federal poverty line reaped benefits from the ACA, as did the companies and health care providers that have facilities in those states.

The Medicaid expansion infrastructure could also be used by some states to address problems on the individual exchange, UBS analyst A.J. Rice said.

Yet, in Tennessee, even though Gov. Bill Haslam negotiated a state-specific plan with federal officials in 2014, the state legislature is not primed to take up the issue, said Wayne Smith, CEO of Community Health Systems, noting that Medicaid expansion is not on the legislative agenda for the 2017 session.

The legislature, which is required to approve an expansion of the proposal, defeated Haslam’s Insure Tennessee in a special session in 2015. The issue fizzled in committees in 2016 and was not brought to a floor vote in either house.

This year a task force created by House Speaker Beth Harwell, R-Nashville, has a blueprint for a two-phase TennCare expansion pilot, but the plan is idling until there is more federal certainty. This week Sen. Richard Briggs, R-Knoxville, proposed a bill that would smooth the way for the state to pursue a block grant should the federal government take that route.

“I wish we already did it,” said Paula Torch, senior research analyst at Avondale Partners.

But as the analysts noted, change is not expected to happen overnight. A replacement plan for the ACA has not materialized, and many lawmakers want to see substantial changes come into effect near the end of the decade — after the federal midterm elections.

Rigg said some states that opted not to expand, in part due to concerns over the longevity of a federal funding match, could be brought to the table under a block grant initiative.

Rigg said how the U.S. Department of Health and Human Services interacts with the new governor of North Carolina, who submitted a late hour plan to expand, will be telling about what the mindset is going to be. The industry will be waiting to see if HHS negotiates on the proposal or says it’s overhauling the whole program, said Rigg.

Block grants are polarizing among lawmakers and health care experts. Haslam recently sent a letter to Congress extolling the benefits of sending more power to states over both Medicaid and the individual health insurance market.

Haslam and TennCare officials think Tennessee is well-positioned to structure a program under a block grant. Torch raised the question about whether the administrative burden could become too great for some states down the road.

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