On Medicaid work requirements, the end of ACA enhanced subsidies and ACAP’s 25th anniversary

Margaret A. Murray, M.P.A., is the founding CEO of the Association for Community Affiliated Plans (ACAP) and a longtime member of the Managed Healthcare Executive (MHE) editorial advisory board. ACAP, the trade group for more than 80 safety net health plans, is celebrating its 25th anniversary this year.

Peter Wehrwein, the managing editor of MHE, conducted this interview. The transcript has been edited for clarity and length.

I am interested in Medicaid enrollment trends, and I made the usual trip to the KFF website to take a look. The overall picture is that they're down compared with 2023 but higher than before the COVID-19 pandemic. I think there was this belief and expectation that redetermination was just going to crash the numbers. I've talked to Eric Hunter at CareOregon about this. It seems some states, like Oregon, were good at redetermination, and that the numbers didn’t go down as much as people expected. What do you see in the Medicaid enrollment trends, and what are your concerns?

Well, we certainly did see, as you said, a reduction. It was variable across the states. That is not unexpected, given that some people had been on … Medicaid [for three years], and we know some people [may not have] even known that they were still on. Other people were very, very aware of it. One of the lessons learned from the pandemic was the importance of being able to reach out to people by text, and CMS and the FCC [Federal Communications Commission] allowed greater use of texting related to eligibility, which was great. [Managed care organizations] did a lot of outreach.

All of those pieces will be very, very important as we move into this next phase of the work requirements. As you and your listeners probably know, our tagline at ACAP is "Medicaid is US," and we believe that people have a right to be on Medicaid. We fought very hard against these provisions [work requirements and renewal requirements], but now that they are the law, our plans are working very hard to make sure that as many people stay on as possible …. Our plans will be very involved in outreach and education to the extent allowed by the regulations and the law. We are encouraging states to use texting. In fact, we are hoping that Congress will be proactive in making it very clear when texting can be used by plans. Right now, there's guidance, but we think that Congress should weigh in on this and then continue to encourage states to do ex parte.*

We expect that we will see continuing decreases, and our fear is that people [who are actually eligible] will fall through the cracks … either because they meet the frailty requirements or are working, volunteering, or are in school but maybe haven't filled out the paperwork. We're always concerned about those places where people fall off the rolls, even when they are eligible.

At ACAP, we have been champions for reducing the level of churn in the program. Luckily, due to the great work from our ACAP plans, children are continuously enrolled in Medicaid for 12-month periods. But the new law says many of their parents in the expansion populations in those 41 states will have to be subject to the work requirements.

When we talked about the work requirements before the regulations came out, you mentioned the importance of health plans being allowed to text members about eligibility issues. Are you satisfied with the rules about health plan texting that are in the regulations that came out on June 1?
We were glad CMS tried to clarify that the door is still open to texts by affirming the 2023 FCC on autodialing and texting for the purposes of helping people with Medicaid eligibility. The interim final rule that came out in June didn’t mention TCPA [Telephone Consumer Protection Act of 1991]. We are still hearing from our plans that some states are still hesitant to allow plans to text members. This inconsistency is making plans think twice about reaching out to members via text, but we all know that text is often the only way plans reach their members. We hope CMS works with the FCC to jointly put it in writing that plans can reach enrollees by phone, text and email about community engagement requirements without fear of TCPA liability.

You also mention the importance of self-declaration or self-attestation concerning exemptions from the work requirements. Do the regulations allow for self-attestation?

We are encouraged that — at least for now — states can accept self-declaration when documentation isn't reasonably available for exceptions, exclusions and general compliance. The problem is that this flexibility is only guaranteed through 2028 and narrows for most people to a one-time statement after that. Although self-declaration seems to be available on an ongoing basis for exclusions in cases where documentation does not exist, we worry that the penalty of perjury attached to those declarations may have a chilling effect. We’re concerned about situations like informal caregiving with no clean paper trail and treatment for substance use disorder that bumps into conflicting federal privacy rules. These don't stop being hard to document two years from now. We're asking CMS to make self-attestation permanent wherever a paper trail simply wouldn't exist in the ordinary course of things.

What in your — and in ACAP’s — view are some of the other drawbacks of work requirement rules in the June 1 regulation? Do you see any bright spots?

Given the complexity of community engagement requirements, we continue to be very concerned about the timelines for implementation. Of course, this timeline was established by H.R. 1 [also known as the One Big Beautiful Bill Act], not the regulation. But the volume of work that state Medicaid agencies and partners need to accomplish before January 2027 is monumental. States have to build new verification systems, interoperable data pipelines and member education and outreach messaging about complex eligibility changes on short notice. New notice processes must be stood up immediately, as the initial work requirements notices for some expansion enrollees must go out almost immediately, around the very date when the regulation goes into effect. All of this is being built as states are also standing up six-month redeterminations for the same population. All of this combined is a recipe for people who qualify for coverage falling through the cracks — not because they're ineligible but because the verification machinery isn't ready.

The rule also changed the medical frailty standard after many states had already begun building systems based on earlier CMS guidance. We are especially concerned that it adds a “significant impairment” test on top of medical frailty diagnoses, requiring doctors and eligibility workers to judge someone’s capacity to work. That is not their usual role. Historically, those determinations have been handled by Social Security, not Medicaid providers or county caseworkers.
That said, there are a few bright spots. CMS places appropriate emphasis on ex parte verification to direct states to use existing data before asking an enrollee for paperwork, although data sharing pathways have not been adequately established in all places yet.

But we think the rule needs more guardrails, more lead time and more explicit guidance in order to work properly. If it doesn’t, people will be wrongly disenrolled from their health coverage.

Are training programs less of a problem? If you're in a training program, you should be able to produce proof of enrollment fairly easily, I would think. I'm just wondering where you see the principal points of friction are for people.

There are work training programs out there. Not all of them are following some of the [Supplemental Nutrition Assistance Program] provisions. Some of our plans actually had their own work support programs, but they weren’t designed to be in accordance with these other federal requirements. So, that’s one issue. It's just making sure that what's out there is up to the federal levels in terms of what they think are work support programs.

Will Medicaid managed care plans be allowed to set up a program to help their members either prove verification of employment or refer them to employment or training so they can stay enrolled? Or is one of the issues that the plans won't be able to get so heavily involved in getting the members qualified with these new rules?

They will be able to refer, and many of them [already] do that. But the proving and saying, “Therefore, they are exempt [from the work requirements],” — that’s the part they can't do. That is incumbent on the states.

Is that because there might be an invitation for fraud and abuse otherwise?

I think that probably the people who wrote this law were just concerned about conflict of interest on the plan's part.

Are your members feeling more likely to feel the effects of these work requirements?

I wouldn't say that necessarily. We wrote a letter with the Medicaid Health Plans of America outlining the issues that I just talked about. Many of their members are the larger plans, so we saw these concerns the same way …. Our plans do tend to be smaller, so when these winds are blowing, they do impact us more harshly because when things are bad in one state, we don't have another state to offset the losses in, like some of the larger plans. So at this point, it's [to be determined], but the larger plans definitely have the same concerns we do.

Are your plans clumped up in blue states with more generous Medicaid programs?

Not necessarily. We have a bunch of plans in Texas. We have a plan in Florida. We're actually in over 30 states.

I don't want to put you on the spot, but in a way, I do. The Trump administration and Republicans are seen by some as being anti-Medicaid, and the work requirements as a Trojan horse for reducing enrollment. What are your thoughts about the administration’s and Republicans’ stance on Medicaid in general?

We were very much … not in support of this bill. I want to be clear on that. But there are places where we can find common ground. Certainly, we all believe that it’s important to have strong integrity provisions. We are talking to CMS about what our plans are doing to combat — I don't want to use the terms fraud, waste and abuse, because [those put] emphasis on the fraud. Sometimes, program integrity is about the appropriate use of resources. It’s not necessarily fraud, and they’ve been very open to hearing — in fact, asking — us our opinion. We wrote a letter to them about what our plans are doing to improve program integrity — or ensure, I should say, program integrity — with a specific nod to the [applied behavioral analysis]** issues.

Our plans have always been very focused on program integrity and making sure that people are getting the right services at the right time by the right provider.

So while we fundamentally disagree with their thoughts on the work requirements, six-month redetermination and higher cost sharing, we are aligned with them in other areas. And as an association, of course, we always want to be able to talk to folks and hope they have an open door for us, and so far, they have.

Shifting focus, there's a lot going on in the individual market — in the ACA [Affordable Care Act] exchange plans — with the end of the enhanced tax credits. There's a flight to high-deductible bronze plans with low premiums and indications that enrollment will decrease. How might this affect your plans and Medicaid in general?

For both Medicaid and the marketplace plans, the eligibility is based on income, so people who lose their Medicaid coverage are not going to go into the marketplace and vice versa. But the issue with the ACA is that, because of the elimination of the enhanced credits, people are falling off. We're seeing a decrease for most of our plans in numbers. Then, as you mentioned, people [are] moving from the silver plans to the bronze plans. This is something we had predicted. We did a paper with Wakely looking at this, and it showed exactly how the cheaper plans might impact people’s decisions. They think they’re cheaper, I should say. In the short run, they are, because the premiums are lower …. In fact, we said that in some cases, people may see their expenses go up $8,000 more than they would have if they just stayed in a silver plan. This is all just starting to play out as people are going through the deductibles now. We’ll see whether people continue to pay the premiums as they start to understand what's, in some sense, not covered. They may say, “Well, why am I paying for this if I have these high deductibles?” So we are very concerned.

There are some states and plans, ironically, that are seeing an increase, but that’s because of something unique in that state. Aetna left, as you know, the ACA marketplaces. A couple of our plans have seen their numbers go up because of Aetna leaving. But that’s anomalous, really. In general, we’re seeing both a decrease in overall numbers and then a movement to bronze.

At ACAP, we’ve always been concerned about underinsurance as well as uninsurance. I hope your loyal readers and listeners know that we led the charge against junk insurance in the first Trump administration. We anticipate there will probably be another reg undoing the Biden changes to junk insurance.

We’re also very concerned about this new type of coverage, nonnetwork plans, where the Trump administration is saying people can use their credits to buy nonnetwork plans. With a nonnetwork plan, you get a coupon, essentially, to go to a provider and say, “I have coverage with this coupon for so many dollars.” But then the provider ends up charging you more — and there’s no reason they wouldn't — [and] you are on the hook for the additional amount. It’s really underinsurance. We have come out very strongly against nonnetwork plans and, in fact, led the charge and drafted a letter to the administration with some of the other insurance associations and the hospitals, saying why these were so problematic.

Are there nonnetwork plans already available?

They do exist, but right now, you can't use your APTCs [advanced premium tax credits] for them, so the administration is saying you can use the credits. People will say, “Aha! This is cheap. This looks good.”

Do they use the credits to buy medical services directly, or are you buying a premium for the nonnetwork plan?

It’s still a premium, but then as part of that premium, you get what I call a coupon that you can take to a provider. You take it to any provider, and then the provider knows that they will get paid by the plan for a certain amount, but the beneficiary would have to pay any amount above what the plan is willing to pay.

What are ACAP’s priorities for the rest of this year and early next year?

Our board met and redid our strategic plan, so we’re very focused now on what they want us to think about. In some ways, they are the things that we’ve been focused on for the past 25 years. ACAP just celebrated its 25th anniversary. Protecting coverage and care for Medicaid enrollees — low-income people, really — is number one. That’s both by policy and trying to get things like 12-month redetermination to be the law of the land. That’s obviously not going to happen in the short run, but we’re making sure … that we operationalize [the law that is there] in a way that keeps as many people [covered as possible].

On the dual side, we want to make sure that safety net health plans can continue to submit diagnostic codes through linked chart reviews, especially for new enrollees. We understand that there is concern about coding issues. Because our plans solely cover low-income people through the duals, our folks tend to have higher acuity. We want to make sure that we can capture those codes, but do it in a way that is fair and appropriate.

I mentioned junk insurance; we will continue to fight against that. [We know] affordability is a big issue in this country, and we will continue to promote affordability of healthcare and think about ways to mitigate the loss of these enhanced APTCs while making sure that people don’t confuse affordability for coverage when they're not buying anything. It's good as long as you're healthy, but the minute you get sick, people understand why what they bought is not affordable.

And how about you? What's on your plate?

ACAP celebrates its 25th anniversary this year, but I also celebrated my 25th anniversary at ACAP. I've been really so pleased and so lucky to be here and watch this industry grow and the Medicaid program become more important. I watched the [ACA] be enacted and helped to try to defend it. I'm just thrilled to be able to be here and have this opportunity — to keep working with our board and our members and fighting the good fight with them to make sure that people have coverage that they need.

You're not burnt out?

Some days are harder than others, but no. The mission is so important, and I wake up every morning being very thankful that I get to work on this mission.

*Ex parte Medicaid renewals means automatically renewing an enrollee’s coverage based on available information from, for example, public assistance programs.

**Applied behavioral analysis is a type of therapy for people with autism. In many states, Medicaid costs for applied behavioral therapy have greatly increased. Investigations by prosecutors and newspapers have suggested that some providers of the therapy have engaged in fraudulent practices.