The Gift of the MAGI?

Medicaid is big and complicated. As I have written about before, the intertangled state and federal monies, processes, and policies that comprise the Medicaid program vary greatly from state to state and, as the saying goes, if you’ve seen one state Medicaid program, you’ve seen one state Medicaid program. With that said, Medicaid occupies a greater share of state and federal budgets, and it is a target of reform on both levels of government. Indeed, with an emboldened Congress and a new administration, changes are coming, and those changes create opportunities and challenges for policymakers. Given this complex relationship, federal policy cannot remain agnostic to the variation of state design.

Like Medicaid, the Affordable Care Act (ACA) is big and complex. And, obviously, the ACA enacted a number of initiatives that affected not only the private insurance market, but the Medicaid program as well. This relationship is probably best known through Medicaid expansion – a policy which was the subject of a Supreme Court decision and numerous political battles in states, including Ohio. But the ACA enabled a number of other activities that states, regardless of political environment, had to or elected to adopt. Yesterday, the National Association of Medicaid Directors (NAMD) issued a publication for policymakers that sought to provide “operational considerations” that discussed this exact issue. This document, importantly, does not try to take positions, but it instead reveals a greater narrative about how thoughtful the policy opportunity of replacement must be.

To demonstrate, one only need to look to the reformatting of the eligibility determination systems across states to understand the universality of these issues. For background, as a part of the ACA, eligibility was simplified to a standard called the modified adjusted gross income (MAGI). This eliminated the often complex process of income deductions, and created opportunities for states to streamline their systems, digitize them, and reduce the need for in-person engagement with caseworkers. This new standard was not an option for states, but it did come with enhanced funding. In Ohio, this change was embraced, with the Office of Health Transformation citing it as a critical activity of their work, describing it as “more efficient” and stating that it “reduces costs to taxpayers” and prevents “fraud and abuse.”

The development of this new system was also not the easiest thing to do. Not only did Ohio have to understand the law and make sure its policies conformed with the federal government’s regulations, but it involved training staff, procurement of large information technology infrastructures, interagency collaboration, reporting, meetings, workarounds, budget summaries and meetings for legislators, and a whole host of activities that would not compromise the one in four Ohioans who rely on the program and the providers who rely on the predictability of those systems to deliver services. This is why, as a consideration, NAMD highlighted this oft-overlooked detail of Medicaid and stated that revising this standard would “be a significant cost to states and the federal government.”

Indeed, there are a number of things that may be affected with a repeal, from fraud and waste programs to community-based services for seniors and the disabled — programs which have broad support across constituencies and interests. And while this MAGI “detail” may be easily resolved in any replacement effort in Congress, it is minutiae like this that often get lost in the broader political conversations about Medicaid. Regardless of the political environment driving this dialogue, the program is so far-reaching that paying attention to the details are going to be the definition of making sure there are more opportunities than challenges with reform.