NASHVILLE, Tenn.—Policy experts emphasized the far-reaching impact Medicaid cuts are likely to have in a panel at the Fierce Health Payer Summit on Friday morning.
At the annual event, more than 300 attendees gathered for two days to discuss topics like utilization management, member engagement and culturally responsive care. The Friday morning panel, focused on government programs, was moderated by Fierce Healthcare Editor Dave Muoio.
Kimberly Kockler, senior vice president of government affairs at Independence Blue Cross, spoke about the unusual pace of and lack of clarity around federal health-related policy changes under President Donald Trump. The administration has been announcing relevant policies nearly every month, often on social media.
“There’s been something consistently and constantly coming up, but not on normal channels,” Kockler said. Abrupt and unprecedented changes, including to the longstanding vaccine schedule, have led to confusion among patients and providers. “Our members, of course, start to panic,” Kockler noted. “There’s so much ambiguity.”
Some policy changes go against a health plan’s mission to increase coverage and access, Ellen Sexton, executive vice president and chief growth officer at Blue Shield of California, added. With respect to vaccines, the plan determined, “we're going to continue to cover this, because that's what clinical evidence was saying we should be doing.”
The barrage of changes leaves payers scrambling to interpret their implications. “We don’t know, sometimes, are these announcements real or not?” Sexton said. Blue Shield of California had to come up with two different rates this year: one in case the Affordable Care Act subsidies remained, and the other in case they did not. “There's scenario planning, just testing the waters. And what it also really reminds us to do as leaders is, with policymakers, actually sit down and remind them we have to implement this,” Sexton said.
Greg Gierer, founder and managing principal of Hilltop Health Policy Advisors, noted the cuts will disproportionately impact Medicaid expansion states. “It’s really shifting costs onto the states, and then states are going to have to make very difficult decisions,” Gierer said. Somewhat counterintuitively, urban hospitals are most at risk from the cuts. “If a hospital closes because of this, that doesn’t just affect Medicaid patients. Everyone loses,” Gierer said.
Half of states don’t have enough in their budgets to pay for their Medicaid obligations, Kockler said. Medicaid is typically a third of a state’s budget already. “It’s daunting for state governments,” Kockler said, adding it’s crucial for payers to be partners to states. Independence Blue Cross is also seeing a significant interest in Medicare from state regulators, as concerns around broker compensation for Medicare Advantage plans grows. “To me, that is just another signal that we are in a different time and a different place,” Kockler said.
In general, the cuts will impact the system writ large. The “ripple effects” will be felt when people lose coverage, get sicker, overburden hospitals and then that trickles out to all payers, Sexton said. With the organization’s Promise Medi-Cal plan, Blue Shield of California is thinking about creative ways to support members beyond policy. Initiatives under consideration include using AI for eligibility checks and helping people complete their GED degrees to fulfill work requirements. Payers deliver “well beyond insurance,” Sexton said, “and we have to continue to think about that, because that's what actually influences the health outcomes at the end of the day.”
Gierer was surprised the Medicaid cuts got worse than what passed the House once the budget reconciliation bill made it to the Senate. The Congressional Budget Office report, which typically accompanies major bills before they are voted on, Gierer added, also wasn’t released until several weeks after the vote was held. “These markups and deliberations were really done in such haste that I’ve never seen before,” Gierer said. “The reason they operated in such haste and secrecy is because these provisions really can’t withstand scrutiny and can’t be defended if they were brought to light.”
Given the policy changes largely fail to address consumer concerns around healthcare affordability, Gierer said, “that’s an opportunity for leadership [from payers] to get back to basics: How do we actually reduce costs for our members, and reduce costs overall?”