2020 Budget Proposal Cuts $1.5 Trillion With Medicaid Eligibility Scrutiny

March 11, 2019

President Donald Trump’s 2020 budget, released Monday (March 11), would cut $1.5 trillion from Medicaid over the next decade by proposing mandatory work requirements nationwide, repealing Medicaid expansion and proposing block grants or per-capita caps for states. The proposal also would put more scrutiny on beneficiaries based on their assets and increase eligibility checks.

The proposal again supports the Graham-Cassidy-Heller-Johnson legislation which would repeal Medicaid expansion and have states choose between a per-capita cap or a block grant program. The budget proposes to add a $1.2 trillion block grant program starting in 2021. In a statement, Rick Pollack, president and CEO of the American Hospital Association, pointed to this part of the proposal as cause for serious concern.

Last week, at a Senate Finance Committee hearing on nursing homes, ranking Democrat Ron Wyden (OR) said he anticipated the budget would contain a “draconian attack on Medicaid” and pledged to fight cuts to the program.

The White House on Monday proposed uniform work requirements nationwide for federally funded public assistance programs, including Medicaid and Temporary Assistance for Needy Families (TANF), which would cut $130.4 billion over 10 years. This comes after several states have already obtained waivers to implement Medicaid work requirement programs. Arkansas is the only state that has begun requiring Medicaid beneficiaries to report hours.

In a government reorganization proposal last June, the White House proposed to implement uniform work requirements under a federal task force and to align SNAP and other federally funded nutrition programs with TANF, programs CMS has encouraged states to use as models when designing their Medicaid work requirement waivers. However, experts at the time argued that setting up a federal work requirements task force would preempt states’ authority, contrary to CMS’ call to tailor work requirement waivers to states’ individual needs.

Some parts of the proposal come directly from last year’s proposed budget, including reversing a provision in the Affordable Care Act (ACA) that eliminated asset tests, which were used by states to determine Medicaid eligibility by weighing an individual’s assets, including cars and savings accounts, for children and able-bodied adults. The ACA severely limited the scope of asset tests under the Modified Adjustment Gross Income (MAGI). The White House proposes to cut $2.1 billion over 10 years by allowing states to again apply asset tests to able-bodied adults. It also would allow states to use asset tests on those receiving long-term care.

The proposal would cut $4.6 billion over 10 years by allowing states to conduct more frequent eligibility checks based on MAGI, beyond just an annual check.

Another proposal from last year that reappears in this budget would cut $2.3 billion over 10 years by preventing beneficiaries who cannot provide proof of citizenship or immigration status from receiving federal funding for medical assistance at the time of enrollment. States would still be able to provide opportunity periods when individuals enroll for federal benefits to provide those documents, but they would be unable to receive medical assistance.

States would no longer be able to apply higher home equity limits under the proposal for Medicaid beneficiaries; Instead, the federal limit would be uniformly applied to focus “long-term care coverage on lower-income individuals without significant assets that could be liquidated to cover their long-term care,” the HHS budget in brief says, cutting $6.7 billion in 10 years.

HHS also would streamline appeals notification requirements for those dually enrolled in Medicare and Medicaid. States would also meet the Medicaid requirement for fair hearings in appeal cases if the case has already been adjudicated by another state agency or HHS.

Meanwhile, the proposal would add $245 million over 10 years to give states the ability to provide Medicaid coverage for one year for post-partum women with substance abuse disorders.

The proposal also would allow CMS to partner with states to ensure recovery of improper Medicaid payments. This comes shortly after the Republican chairs of the Senate Finance Committee and health subcommittee admonished CMS for failing to recoup improper Medicaid-eligibility payments, citing large numbers of improper beneficiary enrollments in Medicaid across several states.

Jerry Vitti, CEO of Healthcare Financial, Inc., called the Medicaid eligibility provisions egregious and said he has concerns about the asset tests. Under the tests, he said, Medicaid beneficiaries might have to sell their vehicles, for example, to quality for the program, which would then render them unable to get transportation to work to fulfill work requirement hours. -- Chelsea Cirruzzo (ccirruzzo@iwpnews.com)