Changes to Medicaid spark controversy, confusion

MOSES LAKE — New requirements for applicants and recipients of Medicaid, scheduled to go into effect in 2027, have caused confusion and controversy. Who qualifies and how recipients maintain eligibility have been the subject of extensive discussion since HR 1, the bill that established them, was approved by Congress in July. Democrats have claimed the bill will devastate health care for Americans, while Republicans have boasted about the measure's savings and potential to reduce the national debt.

“Medicaid delivers critical services to low-income individuals and families in need, and it is our job to ensure the program is viable for those whom the program was designed to assist,” said US Representative Dan Newhouse, R-Wash., in response to an email from the Columbia Basin Herald.  

Senator Maria Cantwell, D-Wash., said she believes the changes ultimately will raise costs. 

“The more people that are covered with insurance, the less uncompensated care there is, and the less cost there is to the overall system,” Cantwell said. 

Newhouse said the new regulations will release additional funding for traditional Medicaid recipients.  

“The part-time work requirements are for able-bodied adults without dependents who choose to stay home and not work, taking away Medicaid’s resources for those who truly need it,” Newhouse said. 

Ahead of HR 1 going into effect, able-bodied people can only receive Medicaid under certain conditions. Generally, that includes low-income adults in Medicaid expansion states like Washington, parents or caretakers of minor children, low-income individuals, young adults aging out of foster care, those with high medical expenses that categorize them as medically needy, pregnant women and other small categories of patients. 

Cantwell said one of the goals of expanding Medicaid coverage was to provide insurance for people whose employers didn’t provide it but who couldn’t afford individual insurance.  

“Oftentimes those people were working, but for a small business or an employer who didn’t provide Medicaid, and the expansion of the Affordable Care Act got hundreds of thousands of more people to have coverage,” she said.  

Under the ACA, those earning 138% of the federal poverty level qualify for Medicaid coverage. 

Exemptions 

The new regulations establish work rules for some people currently enrolled in Medicaid, but there are exemptions. Matthew Reed, communications director for Newhouse, provided a list of exemptions. 

Parents, guardians and caretakers of dependent children, or caretakers of people with disabilities, are exempt. So are veterans with a disability. Also included are “medically frail” individuals – those people who are blind or disabled,  and those who have serious or complex medical conditions, people with intellectual or developmental disabilities that impair them. People with substance use disorders and with disabling mental disorders are also classified as medically frail.  

Indigenous people and Alaska Natives are exempt from the work or education requirements. The exemption applies to pregnant women and women who qualify for postpartum coverage. Medicare Part A recipients and people enrolled in Medicare Part B are also exempt.  Recipients of Temporary Assistance for Needy Families, also known as TANF, and Supplemental Nutritional Assistance Program – a program previously and informally referred to as food stamps - are exempt. Qualifying public prison or jail inmates are exempt from the work requirements, as are people participating in addiction treatment.  

The new rules will apply to people 19 to 64 years old without dependents. People must meet the work requirements for at least one month before becoming eligible to enroll. To qualify, people must be working, volunteering or enrolled in job training or education for at least 80 hours per month. Eligibility requirements will be checked every six months.  

Adam MacDonald, corporate communications manager for Confluence Health, said the ultimate impact is unclear. 

“It’s difficult to say with certainty what the changes to Medicaid in the recent legislation will mean for Confluence Health,” MacDonald wrote in answer to an email from the Columbia Basin Herald. “Like many healthcare organizations across the industry, we are working to prepare as best we can, and placing our emphasis on ensuring that we keep true to our mission. Much remains unknown about how these changes will be implemented and what their impacts will be.” 

Cantwell said she thought the new regulations were too onerous. She cited the hypothetical case of a person who works but whose employer doesn’t offer insurance and who enrolls in Medicaid.  

“All of a sudden, they miss some requirement they don’t even understand they’re supposed to do, let alone how they’re going to get some documentation from their employer. In the middle of this, they have no insurance, their kid gets sick, and they go to the hospital. And the hospital (asks), ‘Where’s your insurance?’ And they say, ‘Well, I used to have it, but I don’t anymore,’” Cantwell said. 

State distributions 

The rules also change for states. Existing regulations stipulate that states can lose federal Medicaid money if they have a rate of erroneous payments that’s more than 3%. But federal authorities can waive that if the state makes a good faith effort to get the error rate down. The new rules establish more stringent guidelines for the error rate waiver. 

According to a Georgetown University study, in 2021, Washington had an improper payment rate of 4.6%. State improper payment rates are evaluated on a rotating basis, and Washington was due for an evaluation in 2024, but a request for the 2024 data from the Washington Health Care Authority was not answered by press time.  

According to the Centers for Medicare and Medicaid Services, the overall improper payment rate for 2022, 2023 and 2024 was 5.09% nationwide, an improvement from the prior year’s assessment of 8.58%. Under the 2024 assessment, 79.11% of improper payments were the result of insufficient documentation. The inappropriate payments generally involved a state or provider missing an administrative step and do not necessarily indicate fraud or abuse of the system. 

Examples of improper payments with administrative causes include items or services with no or insufficient documentation or missing eligibility information on a document, such as income.  

Rural supports 

The federal legislation also added a fund, in effect for five years, to help support rural hospitals, rural health clinics, community health centers and opioid treatments centers. That fund will supply $10 billion per year nationwide during its five-year term.  

Fifty percent of the money from the Rural Health Transformation Program will be distributed equally among qualifying states, and 50% will be distributed based on a list of factors. Those include population and the proportion of rural health facilities in the state, among other criteria.  

“Once the five years is up, it is our understanding that it will be Congress’ duty to allocate additional funding,” Reed said.  

While rumors circulated about various hospitals in Grant County possibly closing due to cuts to Medicaid and Medicare under HR-1, Samaritan Healthcare and the Quincy Valley Medical Center have issued statements indicating that they will not be closed as a result of the new law.

Newhouse said in a press release Tuesday that he has asked federal authorities to distribute the fund fairly among states with a Democratic majority. 

He was one of nine members to sign a letter asking the Department of Health and Human Services to ensure all states have equal access to the money. 

“During the approval process of state applications, we urge (federal agencies) to ensure funds are distributed to rural communities with the greatest need,” the letter read. 

    Senator Maria Cantwell, right, in Moses Lake in 2024. Cantwell said Aug. 21 that she thought changes to the Medicaid program could and would raise medical insurance rates. Additionally, like many other Democrats, Cantwell has expressed concern about people losing access to health care completely.