On Wednesday, the Trump administration announced that it will roll back the Affordable Care Act’s mandate that insurers cover people with disabilities.
Under the plan, states would be allowed to waive some or all of the ACA’s requirements and set up their own rules.
It was announced just as a Senate panel was debating a proposal that would allow states to opt out of the rule.
The move comes at a time when the federal government is facing a looming budget crunch and a series of health care cuts, including the repeal of the Affordable Act’s expansion of Medicaid and the elimination of the tax credits that helped people purchase insurance.
But the Trump Administration also is taking a hard line on disability insurance.
The announcement comes as Trump has struggled to repeal and replace the ACA and is looking to find a way to keep a federal government program that helps millions of Americans with disabilities, known as the Medicaid expansion, afloat.
“This decision does not change the fact that Medicaid will continue to be a critical lifeline for millions of people with a physical or mental disability, but does provide the federal Government with flexibility to allow states the flexibility to make a more effective decision about how to implement the Medicaid waiver,” Acting Secretary for Medicaid and CHIP Marylouise Meade wrote in a statement.
“States will continue their efforts to develop and implement innovative approaches to Medicaid coverage for people with serious health needs.”
States will have until March 11 to set up and administer a system that would enable them to expand Medicaid coverage to more than 15 million people, and then the Federal Health Insurance Program (FHIP) will pay for that expansion.
States can choose to opt-out of Medicaid if they don’t like the new waiver rules.
The waiver rules require states to set aside an amount equal to the federal share of the cost of providing insurance to people with severe disabilities.
That means that states could decide to opt in or out of Medicaid even if they haven’t decided whether to expand the program.
Trump has said that he plans to let states decide how to administer the Medicaid program.
In a tweet Wednesday, he said that states should take the opportunity to determine how to best implement the waiver rules, but he added: “The waiver rules will remain in place.”
He also said that if states decide to end Medicaid expansion and opt out, the government will “take over the reins” of the program and provide health insurance to “all who need it.”
The announcement also puts the administration in a tricky position.
Many of the states that are likely to opt back into the Medicaid rules are among the states with the lowest rates of disability claims.
A 2017 analysis by the Center on Budget and Policy Priorities found that some of the worst states for Medicaid enrollees were the states most reliant on the program, such as Louisiana, Alabama, Tennessee and Mississippi.
That’s because they have the highest rates of people living with severe or chronic disabilities.
In order to get rid of the waiver, the administration must make a number of concessions to states.
It can’t extend the program indefinitely, and states would have to provide more information about how they would cover more people.
The administration also must approve waivers that would require insurers to provide coverage to people who have been denied coverage by their employers or are underinsured, as well as to people in states with high rates of income loss.
The waivers would have no impact on the number of people who are covered under Medicaid.
A new law that would provide federal funding for states to expand health insurance coverage to everyone with a severe disability has been delayed for months.
It would require a Congressional Budget Office analysis, and Congress is expected to vote on it next week.
But in a sign of the tension between the administration and Congress, Republican leaders have been trying to delay it.
A senior Republican aide told reporters Thursday that they’re still “considering options” to extend the waiver.
On Wednesday, House Speaker Paul Ryan, R-Wis., said that Republicans had made it clear that they wanted to wait for the CBO analysis before moving forward with the waiver provisions.
It’s unclear if the waiver will survive in the Senate, where Republicans control 52 seats and have 52 seats in the chamber.