Understanding What’s Next for Medicaid

July 7, 2017

This briefing examined the real-world implications of proposed policy changes to Medicaid and the impact on populations such as children, the disabled, and those who need long-term services and supports. We discussed how the current House and Senate health care bills would transform Medicaid, how a system of per capita caps would work, and what steps states are likely to take with our without changes in federal legislation.

  • Cindy Mann, Manatt
  • Richard Frank, Harvard Medical School
  • Charles Duarte, Community Health Alliance
  • Josh Archambault, Foundation for Government Accountability
  • Sarah Dash of the Alliance for Health Policy and Melinda Abrams of The Commonwealth Fund moderated

Follow us on Twitter: #WhatsNextForMedicaid

Alliance Briefing on What's Next for Medicaid

This briefing is made possible by The Commonwealth Fund.


12:00 – 12:10 p.m. Welcome and Introductions

12:10 – 12:45 p.m. Presentations

  • Cindy Mann
    Manatt, Phelps, & Phillips LLP
  • Josh Archambault, @JoshArchambault
    Foundation for Government Accountability
  • Charles Duarte
    Community Health Alliance
  • Richard Frank
    Department of Health Care Policy at Harvard Medical School

12:45 – 1:30 p.m. Question and Answer Session

Twitter: #WhatsNextForMedicaid

The Alliance is grateful to The Commonwealth Fund for its support of this briefing.

Event Resources



Cindy Mann Manatt, Phelps & Phillips LLP, Partner

(202) 585-6572     cmann@manatt.com

Richard Frank Department of Health Care Policy, Harvard Medical School, Professor of Health Economics

(617)432-0178      frank@hcp.med.harvard.edu

Chuck Duarte Community Health Alliance, CEO

(775)336-3017      cduarte@chanevada.org

Josh Archambault The Foundation for Government Accountability, Senior Fellow

(239) 244-8808     josh@thefga.org


Experts and Analysts

Joan Alker Georgetown University, Executive Director, Center for Children and Families

(202) 784-4075     jca25@georgetown.edu

Lynn Blewett University of Minnesota, Director, State Health Access Data Assistance Center

(612) 626-4739     blewe001@umn.edu

James Capretta American Enterprise Institute, Milton Friedman Chair

(202) 862-5920     jcapretta@aei.org

Charlene Frizzera CF Health Advisors, President;

Leavitt Partners, Senior Advisor

(443) 794-4379     cfrizzera@cfhealthadvisors.com

Rachel Garfield Kaiser Family Foundation, Associate Director, Kaiser Program on Medicaid and the Uninsured

(202) 347-5270     rachelg@kff.org

Genevieve Kenney Urban Institute, Co-Director, Health Policy Center

(202) 261-5568     jkenney@urban.org

Barbara Lyons Kaiser Family Foundation, Director, Program on Medicaid and the Uninsured

(202) 347-5270    blyons@kff.org

Enrique Martinez-Vidal Academy Health, Vice President for State Policy and Technical Assistance

(202) 204-7509     enrique.martinez-vidal@academyhealth.org

Jack Meyer Health Management Associates, Senior Fellow

(202) 785-3669     jmeyer@healthmanagement.com

MaryBeth Musumeci Kaiser Family Foundation, Associate Director, Kaiser Commission on Medicaid and the Uninsured

(202) 347-5270     marybethm@kff.org

Rachel Nuzum The Commonwealth Fund, Vice President, Federal and State Health Policy

(202) 292-6722     rn@cmwf.org

Trish Riley National Academy for State Health Policy, Executive Director


Diane Rowland Kaiser Family Foundation, Executive Vice President

(202) 347-5270     drowland@kff.org

Robin Rudowitz Kaiser Family Foundation, Associate Director, Program on Medicaid and the Uninsured

(202) 347-5270     rrudowitz@kff.org

Vern K. Smith Health Management Associates, Senior Advisor

(517) 282-0841     vsmith@healthmanagement.com

Andy Schneider Georgetown University Health Policy Institute,  Research Professor of the Practice,  Center for Children and Families


Judith Solomon Center on Budget and Policy Priorities, Vice President for Health Policy

(202) 408-1080      solomon@cbpp.org

Tim Westmoreland Georgetown University Law Center, Professor from Practice

(202) 662-9404     timothy.westmoreland@georgetown.edu

Government and Government-Related Groups

Jessica Banthin Congressional Budget Office, Deputy Assistant Director, Health, Retirement, and Long-Term Analysis Division

(202) 226-2669     jessica.banthin@cbo.gov

Evelyne Baumrucker Congressional Research Service, Specialist, Health Insurance and Financing Section

(202) 227-8913     ebaumrucker@crs.loc.gov

Cliff Binder Congressional Research Service, Analyst, Health Insurance and Financing Section

(202) 227-7965     cbinder@crs.loc.gov

Kirsten Colello Congressional Research Service. Specialist in Health and Aging Policy

(202) 707-7839     kcolello@crs.loc.gov

Matt Salo National Association of Medicaid Directors, Executive Director

(202) 403-8621     matt.salo@medicaiddirectors.org

Anne Schwartz MACPAC, Executive Director

(202) 350-2000     anne.schwartz@macpac.gov

Hemi Tewarson National Governors Association Center for Best Practices, Interim Division Director, Health Division

(202) 624-7803     htewarson@nga.org


Daniel Hawkins National Association of Community Health Centers, Senior Vice President

(202) 296-3800     dhawkins@nachc.org

Frederick Isasi Families USA, Executive Director


Jim Kaufman Children’s Hospital Association, Vice President of Public Policy

(202) 753-5500     jim.kaufman@childrenshospitals.org

Dee Mahan Families USA, Medicaid Program Director


R. Shawn Martin American Academy of Family Physicians, Senior Vice President, Advocacy, Practice Advancement and Policy

(202) 232-9033     smartin@aafp.org

Meg Murray Association for Community Affiliated Plans, CEO

(202) 204-7509     mmurray@communityplans.net

Jeff Myers Medicaid Health Plans of America, President and CEO

(202) 857-5720     jmyers@mhpa.org

Bruce Siegel America’s Essential Hospitals, President and CEO


Ashley Thompson American Hospital Association, Senior Vice President of Public Policy Analysis and Development

(202) 626-2688     athompson@aha.org


PLEASE NOTE: This is an unedited transcript. Please refer to the video to confirm exact quotes. SARAH DASH: Hello everybody, and welcome to today’s briefing on understanding what’s next for Medicaid. I’m Sarah Dash and I’m President of the Alliance for Health Policy, it’s a pleasure to be here with you today. For those of you who are not familiar with the Alliance, we are a non-partisan organization dedicated to advancing learning and dialogue on critical health policy issues. I want to say, hello, as well, to those of our audience who are watching us live on CSPAN this afternoon. And to those who are joining us on Twitter using the hashtag #whatsnextformedicaid. Co-moderating today’s panel with me is Melinda Abrams who is Vice President of Delivery System Reforms at the Commonwealth Fund, and we thank the Fund for their partnership in organizing today’s briefing. Since Medicaid was created alongside the Medicare program in 1965, it has grown into one of the most far-reaching health programs in our country, both in terms of the number of people it serves as well as their health and life circumstances and the cost of the program. It’s run by the 50 states and territories within federal guidelines and financed by both the states and the federal government. So, while Medicaid police has national implications, it of course, also has major implications for states and their citizens as well. And as we know, major changes to the Medicaid program have been at the forefront of recent health policy discussions, and are included within legislative proposals in both the House and the Senate. And so, today we are going to talk about what those proposals are, how they would work and what they would mean in practice based on our best evidence and projections. And I just want to make a special note here, because while it’s really easy for Medicaid policy to get very wonky, very fast, and as the old kind of saying goes, if you have seen one Medicaid program, you’ve seen one Medicaid program. This obviously has been an issue in our national conversation that does hit home for many people, so I think it just speaks to the need for continued respectful dialogue on the different perspectives that are brought to the Medicaid program, and that’s what the Alliance for Health Policy is all about, and that’s what this briefing is all about. And we are just really pleased to have a terrific panel here today to help us with this discussion. Let me go ahead and introduce our panel and then I will turn it over to Melinda. Cindy Mann is joining us today, she is a partner at Mannatt, Phelps and Philips. She has been a deputy administrator at the Centers for Medicare and Medicaid Services. She directed the Center for Medicaid and CHIP services at CMS as well. Next, to my left is Josh Archambault. He is a senior fellow at the Foundation for Government Accountability and prior to joining that foundation, he served as Director of the Center for Healthcare Solutions and is a Program Manager for the Middle Cities Initiative at Pioneer Institute. He also served as Legislative Director for Scott Brown in the Massachusetts State Senate and as the Senior Legislative Aide for then governor, Mitt Romney. I already introduced Melinda. So, next to Melinda’s right is Chuck Duarte, who is the CEO at the Community Health Alliance in Reno, Nevada. And before joining CHA, he worked at the University of Nevada School of Medicine and served as the Nevada Medicaid Administrator. Finally, Dr. Richard Frank is the Margaret T. Morris Professor of Health Economics in the Department of Healthcare Policy at Harvard Medical School, and previously served as Deputy Assistant Secretary for Planning and Evaluation at the Department of Health and Human Services, as well as a Special Advisor in the Office of the Secretary. So, welcome to our panel. Melinda has a few quick opening remarks and then we will turn it over to Cindy. MELINDA ABRAMS: Thank you, good afternoon everyone, and welcome and many thanks to the Alliance for Health Policy and to the panelists for joining us. I have been asked to just briefly frame the conversation. As Sarah mentioned, Medicaid has taken center stage as we have — as a number of proposals to repeal and replace the Affordable Care Act, have been introduced. And these proposals don’t just change the expansion of the Medicaid program, but actually also address the underlying traditional Medicaid program. So, it’s timely to say, what’s next for Medicaid? Before we discuss the implications and hear a range of data and perspectives, it’s good to be reminded of some of the basics. The ones that are being projected, by the way, are not actually as good as the ones in your folder. So, if you want to pull out your folder, then you can see some of the numbers. Just to be reminded, it’s a federal and state program. There are federal standards, but states have an enormous amount of — an extensive amount of discretion on the design at administration of the program. It currently covers more than 74 million people and that can be roughly — there are roughly four groups: Infants and children, people of all ages with disabilities, low income seniors, the elderly, and then other adults. Children represent the largest group, but the elderly and the disabled account for the largest proportion of expenditures. In terms of what it covers, Medicaid covers a broad range of services to meet its very diverse population. There are a number of option services that states can cover such as PT and eye glasses and dental, but it’s really — it’s important to stress that Medicaid covers nearly half of all births, 40% of all children. There is a comprehensive benefit for children, known as EPSDT, which is particularly important for children with disabilities. Medicaid covers long term care, including both nursing home care and community based long-term services and supports. And as of currently, more than half of the long-term care covered by Medicaid is in-home and community based. It’s being spent in the home and in the community, which is enabling seniors and people with disabilities to continue to live independently. The Commonwealth Fund has, for a number of years, supported research to examine the implications and the effect of Medicaid on people. So, that’s what’s in this next slide, is just some data from some of my colleagues off of our national survey, our bi-annual survey. And essentially, what it shows is that people with Medicaid are less likely than those with private insurance or the uninsured, to skip necessary services or medications due to cost. Other analysis looks at how Medicaid beneficiaries — their satisfaction with their care, and that they rate the care actually fairly highly. But it’s not just Commonwealth Fund data. There was recently — I want to draw your attention — there was recently a paper in the New England Journal of Medicine by Ben Summers and Kate Baker that did a look back and an overview of the implications and the effect of the Medicaid program and basically showed that those with Medicaid had better access to care, more likely to have early detection of disease, more likely to be adhering to their medication regimen, had better management of their chronic condition, and really importantly, and maybe not overly appreciated, is the peace of mind, knowing that they had some coverage when they got sick. Moving on, another area that we tend to look at is, not just the implications for the people and the state economies, but also the providers. And this is a study that the Commonwealth Fund did with the Kaiser Family Foundation and chose that among these primary care providers, while they were seeing more patients with insurance, most doctors reported no decline in their ability to provide quality care since the Medicaid expansion. So, at the Commonwealth Fund, our role is to support rigorous analysis, to understand the implications of various health policy propels, and really, we strive to look at the implications at multiple levels. Whether it’s on state economies, on providers, on people or subsets of people. So, this next slide looks at a recent analysis done by Al Dobson and his colleagues, looking at the Medicaid provisions in the House bill — the American Healthcare Act, on hospital finances. What we see is that for all hospitals, particularly those in expansion states, can anticipate over the next ten years, an increase in uncompensated care. So, that’s a treatment or a service for which there is no insurer and the patients are unable to pay. So, anticipate an increase of about 78% over the next ten years. Just to put a number on that, it’s about $114 billion. So, a big increase, but also a lot of money. In the non-expansion states, expect about a 10% increase in uncompensated care, again, over the next ten years. It may sound smaller, but still $17.3 billion. We also have a number of analysis that pull out rural hospitals, look at it by state, look at just the safety net hospitals. So, there is a lot of analysis there for you to turn to. Another analysis that we released yesterday is looking at the implications of the Better Care Reconciliation Act, the Senate Bill, on state economies and particularly on jobs. And as it says here on the slide, if it were to become laws, we anticipate about 1.46 million jobs would be lost, affecting gross state products as well as the business output. So, really, again, not just looking at this at the national level, but at the state level. And so here is my little plug for some new fact sheets that we’ve pulled together that are — and that are in the back there for Kentucky and Nevada and California, are examples that we have available, but actually there is one for all 50 states. I only covered two pieces, which was the hospital component and the jobs component, because two of our speakers, Cindy Mann and Richard Frank, will look at the implications for federal dollars to the state — that will be Cindy. And then Richard will look at a subset of the population — people with opioid addictions. So, with that — I was just going to echo Sarah’s comment about how we really look forward to hearing a variety of perspectives and having data and evidence guide this conversation. Thank you. SARAH DASH: Thanks, Melinda. Okay, so we are going to go right down the line. Cindy, Josh, Chuck and Richard. Then we will have time for some Q&A and discussion. Again, for those of you who are just joining us, you can use the hashtag #whatsnextforMedicaid, if you are using Twitter. Go ahead, Cindy. CINDY MANN: Okay, thank you. It’s great to be here with everybody. I’m going to open it up with a little bit of a short overview of the key changes in the Senate Bill with respect to the Medicaid program. And then really focus my remarks today on the per capita cap provision and its implications for states and the program and the people that the Medicaid program serves. And just want to state my appreciation for the support of the Commonwealth Foundation for its support of our modeling work. And we have looked at state by state impacts of both the House bill and the Senate bill and I will draw on both of those analysis as I go through my presentation this morning. So, if we want to go to the next slide. Here is an overview of some — there are a variety of different provisions in the Better Care Reconciliation Act that affect Medicaid, but here are some of the key changes: Like the House passed version of the bill, the — nobody quite knows if you are supposed to pronounce the initials or just say them out loud. But BCRA, I will say, converts Medicaid essentially to a capped funding program. Very fundamental change as they are identified in the basic structure of the Medicaid program, and really goes beyond any changes that the ACA had with respect to the Medicaid program. So, would convert starting in 2020 Medicaid to — instead of a program where the financing is jointly shared by the federal government, they federal government’s share would be limited by a per capita cap that builds up to an aggregate cap that I will explain. That would go into effect in 2020. The bill also offers states, instead of doing a per capita cap, a block grant option, but for a limited population. The per capita cap generally applies to virtually all spending and all people in the program. There is some for the caps, but it’s long term care, it’s acute care, it’s — I think the key point is it’s not just the expansion population. People think we are talking about repeal or replace, it must be able the expansion, the financing changes are really pretty much wall to wall in the Medicaid program. The other big change in the bill is that it would phase out and ultimately eliminate the enhanced federal funding that the Affordable Care Act did make available for states to expand coverage to low income adults. And you will see on the slide, that it phases out beginning in 2021, and has a three year drop down of the match rate, in 2020. Under the ACA it would be at 90%. It goes to 85, 80, 75%, and then in 2020 it goes down to a state’s regular match rate. So, big change in terms of the federal financing. There are also some provisions in the bill that would provide some extra funding for the states that didn’t take up the option to do an expansion. Some funds, two billion dollars of funds, to those states to be shared among the 19 states and also it changes the DSH cuts, so the expansion states continue to experience — or, will experience the DSH cuts that are scheduled to go into effect — SARAH DASH: DSH means? CINDY MANN: I’m sorry, thank you. DSH is Disproportionate Share Hospital Payments. It’s a special feature of the Medicaid program which provides funding on a match basis to help provide financing to hospitals at sort of a disproportionate share of either Medicaid or uninsured individuals. ACA cut DSH spending on the theory that we would have more coverage and there would be less uncompensated care, and what the Senate Bill would do is restore those cuts and not put those cuts into effect. They go in effect in September for the non-expansion states, but for the expansion states, they would go into effect. Even after the enhanced match goes away. So, those are some of the major things. I need to get going on this. So, if you go to the next slide, it just briefly shows you what the reductions are. Alright, follow your booklet. It just shows the year by year reductions that CBO has identified in the BCRA. Overall, and you are probably familiar with the CBO scores, CBO says that the bill would produce a loss of $772 billion over ten years for the Medicaid program and of course, very importantly, by 2026, CBO projects that 15 million people covered by Medicaid would lose that coverage. Would no longer have that coverage. If you go to the next slide, I want to talk a little bit about how the cap works. I’m not going to spend a lot of time explaining this, this is a wonderful diagram and hopefully it will teach you, but we can have some time during Q&A. But the bottom line is, it’s a per capita cap, meaning the amount of dollars each state gets is based on their historic spending, and then that historic spending is trended forward by a trend rate. And both of those factors are really critical in the terms of understanding the impact to a state’s Medicaid program. What was that spending in the early years? The state is kind of locked into that spending over time, in perpetuity, except for the adjustment. And what you see in this diagram is that there are different trend rates that the bill picks. Medical CPI and Medical CPI plus one, to bring the caps forward year by year until the year 2025. 2025 all groups go down to the CPI, which is a much lower trend rate. That all builds up to an aggregate cap. So, you have your caps for the individual groups of people, you then multiply the cap times the number of people you covered in each of those groups, and that builds up to an aggregate cap, and that is what the state is going to be guided by in terms of its spending. So, if state spending goes over the cap, and it starts to draw down federal dollars beyond the cap, it will have to pay back — there will be a claw back to those federal dollars in the following year, and all of the dollars actually spent over the cap will be 100% financed by the state. So, very different notion from current law, where all financing — all costs that are legitimate Medicaid costs, are shared by the states and the federal government. If you go to the next slide, this just looks at how those trend rates compare. I won’t go through detail on this, but let me just say, the trend rates are designed intentionally to save the federal government dollars. So, they are pegged at a rate that is intentionally below what it is — the states are expected to spend over the next 10 years. And that is one of the main ways in which the bill achieves some of the savings in the $772 billion score. If you go to the next slide, please. This one you might want to look at your booklet. This shows the year by year. This is our modeling at Manatt, where we showed the year by year and we have this data by state impact of the caps on — this is just the caps, not the effect of the expansion, so just part of the $772 billion. And what you see here is the federal loss of dollars, but I also want to point out, which is often forgotten, that there will be a state loss of dollars. If a state says, I’m just going to spend to the cap, I’m only going to spend that which qualifies for a federal match, which is what most states do now under federal law, they could spend all their money on healthcare if they wanted to, but they generally say, I will spend what I can spend that qualifies for a match. If they only spend what qualifies for a match under a capped environment, their state spending will also decrease. So, the total impact to the Medicaid program is bigger than the impact of the federal cuts. It’s also the reduction in state dollars. Now, a state doesn’t have to reduce its dollars, it can simply spend state dollars without getting a match. But on the assumption here, that a state will keep below the cap to avoid that claw back and to avoid spending 100% federal dollars, you see the total cuts. The other thing that I would point out on this graph is because the CPI trend rate pops in, in the Senate bill in 2025, you see a very deep — well, a significant jump in the cuts between 2025 and 2026, because of the change in that trend rate. And so, that gives you a sense, and CBO has looked at this also, a sense of how the cuts will grow over time. They will become — they do become deeper every year, but they will become even more — even deeper after that 2026 period. Let me just try and make one more point here, if you would go to the next slide please. One of the things that we have modeled is the lack of certainty of what life will be like, right? The one thing that we know is that healthcare costs are difficult to predict. But the other thing is that these trend rates are difficult to predict. So, when we have done these analyses, we have taken CBO’s projections of the trend rate. CBO says, I think medical CPI will be 3.7. I think CPI will be 2.4 over the next period of time. It’s as good a projection as anyone might make, so I have no quibbles with their projection. But what we are showing here, is that over the last period of time, and it’s not unique to this period that we’ve looked at, is these trend rates go up and down. They are volatile, so it matters a lot which trend rate Congress picks, but whichever trend rate Congress picks, we need to understand that it is not set in stone, it is a trend rate that will fluctuate. So, one of the things that we did, is we looked at: Well, what if the trend rate isn’t exactly what CBO projects? What if the trend rate, instead of being 3.7 for medical CPI, is just a little lower, it’s 3.2. Half a percentage point lower. And what you see on this, is that the total cuts, just again, due to the cap, would change between 2020 and 2026 from about $267 billion, it would jump to almost $400 billion, just because that trend rate changed and didn’t turn out to be exactly what CBO thought it would be. So, just to close, I think that’s one of the most important points we want to make about the fundamental change in financing of a cap. Is it — yes, produces significant reductions in federal dollars to states for their Medicaid program, but it also introduces a great deal of uncertainty, and all of that risk of uncertainty of the trend rates or of actual healthcare costs, are going to be borne by the states, by the Medicaid program, and by the beneficiaries. I will stop there. SARAH DASH: Alright, thank you. Josh Archambault? JOSH ARCHAMBAULT: Great, thank you so much for the Alliance for Health Policy and the Commonwealth Fund for inviting me. Just for those who aren’t familiar, FGA is a think tank that works in roughly 35 states. We also work here at the federal level in health and welfare reform. So, I want to start with a poll. Raise your hand if you think based on the media coverage, at the end of the ten-year CBO budget window, we will be spending less money on Medicaid? Raise your hand. Raise your hand if you think we are spending more money at the end of the ten-year budget window. A couple people. Okay. I’m just saying absolute dollar amount. If you compare what we are spending today, versus the future. So, I think what we have found around the country, is the media coverage has used this language around “cuts”. Massive, severe cuts. But what is interesting is that for years, we have had agreement on the right and left in the health policy world, that we want to slow the rate of growth in healthcare in general. Yet, we have a proposal on the table for the Medicaid program to slow the rate of growth and the sky is falling. Now, there is lots to unpack here, so I want to start a little bit and talk about the status quo. I want to make sure that anybody who is talking about the changes in the Republican bills, has to also talk about the status quo. From the standpoint of, the Medicaid expansion pits the able-bodied adult, who are part of the expansion population, against the traditional Medicaid population. Let me explain that. So, the federal government put extra money toward the Medicaid expansion population to try to get states to expand. The challenge with that, is that if I’m a state budget writer and I have to balance my budget every year, which by the way, they do, unlike here in Washington. They have to – -if they have to find one dollar of savings, determine where they are going to try to take that one dollar of savings, determine where they are going to try to take that one dollar of savings. They have got a few different options. I will tell you, first and foremost, that when it comes to Medicaid, it comes out of the traditional Medicaid population. The elderly, kids, the disabled. Because they lose less federal dollars if they do so. If it doesn’t come out there, then it comes out of education spending, public safety, infrastructure. We can’t spend the same dollar twice. Secondly, as far as the status quo is concerned, we can’t assume that federally we can actually sustain the spending that we have. If you look at GAO, CBO, look at any of these reports historically, when they look at SSI, Medicare and Medicaid, they are going to eat the federal budget alive over the next 50 years. For us to just assume that we can’t do anything for reform, I think is naïve. And it’s also going to hurt people more in the long run. The deeper concern that we have, is that I don’t think the Medicaid program in general has lived up to the promises that we’ve made to the truly needy, before making new promises to the expansion population. I also would say that the current open-ended structure actually leads to some pretty terrible state behavior. The New York Budget Director for a long time had this somewhat glib statement, saying: If it moves and Medicaid can pay for it, then put it in Medicaid, so that we can pay for it. Things like school services. And if not, depreciate it if we can’t pay it off. At the heart of what that is, is to say, we are going to try to just pull down as many federal dollars as possible. The focus is not about program integrity, coordination of care, health outcomes, and as I’m sure many of you are aware, there have been some questionable — whether it’s the Oregon study or others, looking at questionable outcomes on Medicaid. So, if we have a program that estimated to deliver about 20 to 40 cents of value for anybody, why would we just defend the status quo? Why aren’t we open to trying something new? I do think that from the state perspective, we work with a lot of state legislators and governors, and when it comes to Medicaid, one of the things we hear in blue, purple and red states alike, is additional flexibility. They want and desperately need additional flexibility on Medicaid. So, what does that mean? Well, it can mean a few different things. The first thing is that the waiver process here in Washington, it does allow for, in theory, a lot a of flexibility. But when you’re a state legislator needing to balance your budget, when you are a governor needing to balance your budget that year, but the average waiver request takes over a year to get approved, it’s not as helpful in the short run. So, giving them the flexibility to grandfather new eligibility changes going forward to do more frequent eligibility checks, to reinstate asset tests, or sorts of things that governors are starting to look at, especially in light of some of the proposals that are on the table here in Congress going forward, of what they want to do to move forward. I will just say that, on the per capita cap proposal, this used to be bipartisan. President Clinton had a proposal on 1995 along these lines. There have been Democratic governors in the past — now, I live in Boston — former governor Duvall Patrick talked a lot about the need to bend the cost curve or reduce the rate of increase in Medicaid. So, I want to make sure that we are having an informed, intelligent discussion about what the actual changes are, going forward. What is interesting to note, is two things. One, for those that were in support of the ACA, there were over $700 billion in reductions in payment in Medicare. I don’t recall seeing the sky is falling rhetoric around that time. In fact, I went on the Commonwealth Fund website to look. And what I found was, Karen Davis, who I believe was at the Commonwealth Foundation, testifying about that this was positive. In fact, she said, more is needed to have a sustainable program. And she laid out a number of different proposals to do so. But I think it’s just interesting that we have people that want to have it both ways. If we recall, in Welfare reform, in the 1990s, the sky was falling during that reform as well. And what was missing from that discussion, similarly to I think what is missing today, is that there are two components here. There is a tax credit; in Welfare reform, there is the earned income tax credit. In healthcare there is a tax credit, and there is a robust debate to be had about how generous it is, who is it offered to? But in the Medicaid space, when a state decides to move away from Medicaid expansion, there is a tax credit available for those who don’t have employer based insurance. In non-expansion states. For people who aren’t currently qualified for Medicaid. There is a tax credit available. Newly available under the Republican healthcare bill. That should be part of the conversation that we are having about holistically looking at the decisions that people are going to be made. Now, I’m not really interested in kind of closing to poke CBO too much; however, I will make a couple comments here about the coverage losses that we keep hearing about. What we need to understand about the process, and it’s very arcane, and I get why the public doesn’t follow it, but they modeled off of 2016 numbers that had a number of assumptions about how many people were going to sign up in individual market and in Medicaid. They didn’t model off of updated numbers in 2017. So, there are 14 or 15 million lives number that we often hear about people losing Medicaid coverage. It’s not “losing” technically, it’s changes. And there are a couple of things baked in there that are just phantom. For instance, they say that five million of those are people who “lose” coverage in states that they thought would expand Medicaid. Well, if you are not on Medicaid, I’m not sure how you can lose it. They also make some assumptions around the individual mandate that five to seven million people will just decide, from this year to next year, that are on Medicaid now, effectively a free insurance program, that they are just going to stop signing up. I think that there are some reasonable questions to be raised about whether that is a safe assumption going forward. So, thank you for the opportunity to share that. I look forward to the Q&A, as I suspect I may be sharing a slightly different perspective at times than others on the panel. SARAH DASH: Great. Thank you, Josh. And I do want — I know most of the people in this room are very familiar with the Medicaid program and the policies, but since we’ve talked about both the expansion population in Medicaid and the per capita cap, I just want to kind of raise a clarifying point as well for those who might be watching on CSPAN, that who was in the Medicaid expansion population, can Cindy or Josh, one of you give that quick primer and overview of that? CINDY MANN: Sure. Happy to. So, a lot of people, I think, thought before the ACA that poor people got Medicaid, old people get Medicare. And Medicaid grew up over the years, Congress changed it over the years, but there was always a missing group of people. So, parents could get coverage, pregnant women could get coverage, children could get coverage, people with disabilities and elderly, and if you didn’t fit into those boxes, but you were still poor, you actually didn’t qualify for Medicaid and you would have to come and get a waiver and it would be complicated. And so, what the Affordable Care Act did, is said people should be eligible for Medicaid based on income, not based on family circumstances. So, by filling in that gap, what it meant is the expansion group, are parents above the income level that a state was covering at — before the ACA, well below poverty on the average. And so-called childless adults. I always say “so-called” because in Medicaid language, a childless adult is somebody who is not living with a dependent child who is under 18 or 19. So, I’m a parent, but I’m not a childless — but in Medicaid language I would be a childless adult, because my kids are 19 and 20. So, it’s adults that aren’t pregnant, aren’t disabled, aren’t elderly, and up to 138% of the poverty line. SARAH DASH: Just one more quick clarifying question: So, that 15 million number that was in the CBO score, is that mostly related to that expansion population or is it related to other populations that are covered under Medicaid? CINDY MANN: Yeah, CBO doesn’t identify at that precisely. We think it’s mostly related to the expansion population, but there will be some implications because of the reductions in the federal funding that we went through, through the cap. But exactly how any given state might address those reductions, I think are somewhat speculative. So, I think it’s mostly the expansion, but it’s the combination, or they don’t pull it out. JOSH ARCHAMBAULT: A point of note for context. Roughly about 75% of the growth in spending in Medicaid is due to enrollment. It’s not due to underlying healthcare costs or other things going on. So, when we are talking about “savings” going forward, it’s frequently related to enrollment of some sort, because that’s where we’ve seen the explosion both in the expansion and in the non-expansion population. SARAH DASH: Great thanks. And we will get to the intersection of the Medicaid program, the expansion changes and the tax credits that Josh — that you mentioned. But before we get to that, which I do want to get to in the Q&A, we are going to give our other panelists a chance to share their remarks. CHARLES DUARTE: Good afternoon everybod