Reflections on the Debt Ceiling, Unwinding and Overwhelm

As I write this, we are all waiting with bated breath for the votes that will secure this weekend’s agreement-in-principle to resolve the debt ceiling impasse. We are also grappling with a pervasive sense of overwhelm, active engagement of all states in the unwinding process, and the challenging realities of ensuring that we are being influenced by and person-centered in serving folks with complex life circumstances and needs.

It’s a lot, but we don’t have the luxury of standing down on any of these. The more than 90 million people served by Medicaid continue to need our highest and best effort. I know that you join us every day in unwavering focus on this shared mission.

Agreement in Principle on the Debt Ceiling Impasse

It was a huge relief to hear the news that the agreement-in-principle on the debt ceiling impasse leaves Medicaid intact and that, contingent on Congressional action this week, federal Medicaid payments to states will not be interrupted or delayed.

While this deal will defer further wrangling on the debt ceiling until 2025, all of us should be equipped to reinforce with policymakers how much states rely on federal funding to operate Medicaid, and the implications for Medicaid of any future federal default. In a word: devastating. Given that there is no modern precedent for a federal government default, it remains uncertain exactly how this would be handled. That said, if the federal government did go into default, it is very likely that federal Medicaid payments to states would, along with many other obligations of the federal government, be delayed. Note that default is a very different scenario from an impasse in settling the federal budget, in which case payments for Medicaid and other entitlements must continue to be made.

We are all acutely aware that delay in making these payments would seriously impact states in making payments to health care providers and managed care organizations, both of which would impair services to Medicaid members. Related, delays would likely seriously erode providers’ trust in receiving timely payment. At a time when we are all highly cued to the need for expedient and effective access to Medicaid services – especially in context of analyzing and preparing comments on the major access and managed care rules that were recently released by CMS – that would be a terrible thing.

It’s important to note the particulars. States need timely and uninterrupted federal Medicaid payments because:

• According to Kaiser Family Foundation data, Medicaid reflects nearly 1 in 6 dollars spent in the US on health care and 1 in 2 dollars spent in the US on long-term services and supports.
• All states rely on federal funds to underwrite at least 50% of the costs of operating Medicaid, with more economically challenged states receiving much more – up to 77%.  According to the National Association of State Budget Officers, in FY’22 total Medicaid benefits spending was $799.6 billion, which included $540.1 billion in federal spending – 67.5% of the total.
• Medicaid is a significant share of all states’ spending. NASBO reports that in FY’22, Medicaid spending accounted for:
  • 6% of total state spending, which is the single largest component of total state expenditures; and
  • 3 percent of general fund spending, which is the second largest category of spending after K-12 education.

Let’s all make sure that even after a resolution this week, this doesn’t go off policymakers’ radar screens.

Overwhelm

I hope that you are taking time to replenish your body and spirit. As the remarkable Dr. Laree Kiely of the leadership consulting group We Will usefully asks, “what is getting in the way of taking care of yourself?

This is a powerful and absolutely necessary question. Why? Because even though we know we must and should, and we probably even have ideas of how, we just don’t take enough care of ourselves.

Please just do one thing. And let me know if you need an accountability partner.

Unwinding

As you are aware, all states are now actively engaged in the unwinding process. Herculean efforts have been invested in communications and engagement with members and also MCOs, health providers, community partners and advocates. That said, state leaders and we at NAMD remain vigilant and committed to maintaining coverage for all people who remain eligible – with a particular emphasis on children – and to supporting people who have become ineligible in readily accessing coverage on the marketplace or through their employers.

The Kaiser Family Foundation released a new Survey of Health Insurance Consumers conducted between Feb. 21 and March 14, 2023 that we are looking at as a call to action for continued partnership among all of us who are doing this work. While we are hopeful that continued communications from a range of trusted sources, and new flexibilities from the federal government, will helpfully augment all the strategies that are already in place, the bottom line is that there continue to be challenges in overall literacy level about the unwind, particularly among older adults, and a high incidence of people who have not been through the renewal process previously.

Based on emerging data from early states, the Kaiser results, and what we hear reflected from various member and advocate coalitions, we are promoting additional focus on outreach and stakeholdering in support of retention of coverage for both children and older adults. Anything that you can do to be of support with this will be of great benefit.

Related, we must continue to listen to and act on the experience of people served by the program. Last week we had the privilege of hosting our Annual Meeting with state and territory teams in Minneapolis. This rich and intensive session was an incredible opportunity to compare notes and best practice on every aspect of the unwind. It also notably included a panel of community experts led by Dr. Nathan Chomilo, who serves as Minnesota Medicaid’s Medical Director and is a pediatrician in active practice. Dr. Chomilo was joined in dialogue by the Reverend Babington-Johnson, Founder and CEO of the Stairstep Foundation, Demetrea Kelley, Navigator Coalition Director with the Minnesota Disability Law Center, Dr. Diane Banigo, Social Architect and Nurse-Midwife Consultant, and Jesse Bethke Gomez, Executive Director of the Metropolitan Center for Independent Living.

Rev. Babington-Johnson, Demetrea Kelley, Dr. Nathan Chomilo,

Dr. Diane Banigo, Jesse Bethke Gomez

Responding to the central question about how the unwind is being experienced by people served by Medicaid, and what state leaders and their partners can do to be responsive and attuned to their needs and preferences, the panel spoke candidly and compellingly about the need for continued attention around:

• Creating community in leadership, both internal to Medicaid teams and externally;
• Productively disrupting the status quo (e.g. historically conventional means of communicating with and seeking comment from people);
• Avoiding complacency around, and both hearing and acting on, the needs of people who take the time to volunteer their lived experience in interacting with state Medicaid programs, plans and providers; and
• Routinely validating and valuing lived experience and expertise, not just in times of crisis.

There could be no more clear or cogent advice to us all in continuing this vitally necessary point in time.

Thank you for all you bring to our shared work.

In partnership,

Kate