Medicaid access for millions hangs in balance

The Biden administration estimates that, following the expiration of COVID-19 emergency orders, more than 15 million people will soon lose Medicaid coverage. That’s a problem. More than 1 in 3 adults age 50 and over are forgoing food and other necessities to pay for health care, and without Medicaid, they may have no way to make ends meet.

The president knows it, which is why he pledged in his February State of the Union address to expand coverage to those left off Medicaid. However, seemingly in an attempt to make up for funding shortfalls for the program, which is nearing insolvency, the Centers for Medicare & Medicaid Services, or CMS, recently issued new counterproductive program guidance that can make this big problem even worse.

Medicaid is funded through a mix of local, state and federal funds. The federal government provides a match to each state of 50 to 75 percent of their program spending.

New guidance from CMS threatens to regulate how states can fund their side of the program, especially their redistribution of Medicaid payments. The agency’s aim appears to be lowering state Medicaid spending, which would, in turn, reduce the federal government’s spending. While Medicaid is in need of reform, this new CMS guidance will only add more fuel to the country’s rural hospital crisis fire, jeopardizing hospital and doctor access for hundreds of thousands of Americans. It will be especially problematic for Texas, which already has more rural hospital closures than any other state.

Biden is aware of this alarming unintended consequence. During the 2020 presidential election, then-candidate Biden campaigned against a similar policy from President Donald Trump’s CMS director, Seema Verma. More than a dozen states opposed the measure, which would have cut state and federal Medicaid funding by as much as 50 percent. This would have bankrupted many rural hospitals.

The political pressure caused by Biden’s opposition and that of a bipartisan coalition of members of Congress caused Trump to suspend the rule from consideration. However, Biden’s CMS appears intent on bringing its back.

If CMS doesn’t already know that its new guidance is counterproductive, it should at least know that it is at odds with the law. Last year, it withheld approval for a Texas Medicaid payment because of “Medicaid redistribution” concerns. After Texas sued, and a court found that CMS exceeded its authority, the agency backtracked and approved the waiver. Why, then, has CMS decided to issue new guidance months later that doesn’t take the court’s declared problem with its interpretation of acceptable Medicaid financing into account?

Yes, the federal government needs to find new ways to finance Medicaid; and, yes, it needs to crack down on waste, fraud and abuse within the system. However, this new CMS guidance won’t do either of those two things. It represents a knee-jerk reaction to the nation’s Medicaid problems that will lead seniors and the underprivileged to have even fewer doctors, hospitals and treatment options available to them.

Biden understands the issue that his CMS’ new guidance presents. Time will tell if he or one of his advisers raises concerns with the agency and demands that it stand down. The fate of hundreds of thousands of Americans’ health care access depends on it.