Centers for Medicare and Medicaid administrator Seema Verma sparred with House Democrats on Wednesday about her agency's efforts to undermine Obamacare coverage in the Medicaid program, which has seen enrollment decline in the last year that some insurers say is now driving up medical costs in the program.
Verma contends that the drop stems from more people gaining jobs that carry employer health coverage — not new rules in Republican-led states that require recipients to work to receive the aid.
"When we look at the Medicaid program it's natural to see fluctuations in enrollment," Verma explained during a House Energy and Commerce Committee hearing, adding "because we're in a booming economy, less people in poverty, we're going to see that in the Medicaid program."
Rep. Joe Kennedy III, D-Mass., assailed her premise, pointing to a study in the New England Journal of Medicine that concluded thousands of people in Arkansas lost Medicaid coverage due to reporting requirements for recipients to maintain coverage.
"You're imposing policies on millions of people across this country. Can you show me one study that shows that is a good policy?" Kennedy asked.
"I think it's premature to draw conclusions about Arkansas," Verma argued.
"Eighteen thousand people lost their health care. How many more people have to lose their health care, before you can make a determination?" Kennedy shot back.
Medicaid losses
Medicaid expansion to cover low-wage working adults under the Affordable Care Act led to a growth in coverage under the program since 2010. States have turned to health insurers to manage those programs, and now two of the nation's largest insurers say they are seeing more turnover in states that have implemented new work reporting requirements.
"We have experienced continued membership declines as a result of redeterminations, resulting in an overall increase in the acuity of our remaining membership," Centene CEO Michael Neidorff explained on his company's third-quarter earnings call Tuesday.
Centene and rival Anthem both cited the Medicaid waiver changes for increasing the rate of medical costs in some state programs.
"In some states, reverification efforts had minimal impact, but in others, we've seen disenrollment on the average of 2%, with states going as high as 4% disenrollment," John Gallina, Anthem executive vice president and chief financial officer, said on the company's third-quarter earnings conference call Wednesday.
Both insurers said the individual Obamacare exchange market has stabilized and both were optimistic for the upcoming 2020 open enrollment season, which begins Nov. 1.
Verma touted the administration's running of the exchanges as a success, even as Democrats criticized the administration's funding cuts for outreach. She noted that on average ACA premiums are set to decline in 2020 for the first time since the individual market launched six years ago.
But Democrats pressed her on the administration's support for the Republican-led lawsuit to overturn the law, a case known as Texas v. The United States. A federal judge ruled in favor of the plaintiffs earlier this year, and the fifth circuit court of appeals is expected to issue a ruling on the case sometime soon.
Texas v. the United States
If the law is thrown out, it would upend the Obamacare exchange market, which this year provided coverage for roughly 10 million people. It would also invalidate scores of ACA provisions including protections for pre-existing conditions and the ability of young adults to be covered on their parents' plans until age 26, as well Medicaid expansion.
Verma says the administration is weighing a number of options if that happens, without giving details.
"Do you have a plan? Or, is this another pie-in-the sky promise?" pressed Rep. Jan Schakowsky, D-Ill.
"We have planned for a number of different scenarios but we need to hear from the courts," Verma said, adding in another exchange that "this is going to take some time for the courts to resolve."
Analysts agree that whatever the 5th Circuit decides in the case, the ruling is expected to be appealed to the Supreme Court. The high court would not be expected to rule until next spring or more likely early next summer.
Centene's Neidorff told analysts he expects whichever way the issue is decided by the high court, insurers will adjust. The company is the largest insurer on the Obamacare exchanges with nearly 2 million members,
"It's not something we spend any time worrying about. It's an overhang in some people's mind, so the sooner it gets resolved, reversed, the happier we'll all be," Neidorff said.