Manatt on Medicaid

Medicaid’s Role in Public Emergencies and Health Crises

By Jocelyn Guyer, Managing Director | David Rosales, Director

Editor’s Note: When it comes to natural disasters and public health crises, it is not surprising—in fact, it is expected—that federal agencies such as the Federal Emergency Management Association (FEMA) and the Centers for Disease Control and Prevention step in to help the victims. While less known, the Medicaid program plays a similarly essential role in responding to public health emergencies, epidemics, and natural and man-made disasters. In a new issue brief for the Robert Wood Johnson Foundation State Health Reform Assistance Network, summarized below, Manatt Health describes Medicaid’s unique and critical role in responding to events such as the opioid and HIV/AIDS epidemics; the 2001 World Trade Center attacks; the Flint, Michigan, lead contamination crisis; and Hurricane Katrina. Click here to download a free copy of the full issue brief.

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Notably, Medicaid’s role as a disaster response tool is possible because of its financing structure. Medicaid’s current matching rate structure guarantees that the federal government will match state expenditures on eligible individuals for Medicaid benefits, without limitation. This open-ended federal commitment is key to Medicaid’s ability to respond quickly to major disasters and health crises.

In the context of federal legislative proposals that would cap federal Medicaid funding to states in the form of a per capita cap or block grant, it is important to review the role that Medicaid has played in several high-profile disasters and public health crises and to explore whether Medicaid could respond to similar disasters under alternative financing models that limit federal funding to states.

Medicaid and the HIV/AIDS Epidemic

Since the beginning of the HIV/AIDS epidemic in the 1980s, Medicaid has enabled care for hundreds of thousands of people with HIV/AIDS, and today is the largest source of health coverage for people with HIV in the United States. By the year 2000, Medicaid covered 100,000 HIV/AIDS patients, up from 5,300 in 1986. This number expanded to almost a quarter of a million people by 2011. Subsequently, the Affordable Care Act (ACA) allowed many low-income people with HIV to access coverage in states that expanded their Medicaid programs.

As the cost of treating HIV has risen, Medicaid’s matching rate structure has absorbed the expense of lifesaving treatments in real time. If Medicaid funding were capped, states may find it difficult to sustain their response to the HIV/AIDS epidemic. Without Medicaid expansion, many HIV-positive Medicaid beneficiaries would lose coverage and need to rely on “last resort” options, such as the Ryan White Program and its related AIDS Drug Assistance Program (ADAP), both of which require congressional reauthorization and annual discretionary appropriations.

2001 World Trade Center Attacks and Disaster Relief Medicaid

Within seven days of the World Trade Center attacks, then-Governor George Pataki announced that low-income New Yorkers could immediately begin four months of Medicaid coverage to access medical and mental health services by completing a one-page application. In the background, state and federal officials worked to put New York’s Medicaid program under special provisions through a Section 1115 Demonstration Waiver. Called “Disaster Relief Medicaid,” the program financed $670 million in post-9/11 healthcare costs for some 350,000 people without diverting emergency funding sources.

Medicaid’s Role in the Aftermath of Hurricane Katrina

After Hurricane Katrina displaced tens of thousands of people and drove a sharp increase in the need for medical and mental healthcare, the Louisiana Medicaid leadership quickly stationed Medicaid workers in FEMA shelters to enroll individuals and changed the program’s rules to allow out-of-state providers to treat evacuees without undergoing pre-authorization procedures. In the following weeks, 15 states worked with federal officials to rapidly secure Section 1115 waivers to tackle the health coverage and access challenges that Katrina caused.

Medicaid and the Flint, Michigan, Contamination Crisis

In January 2016, President Obama declared a state of emergency in Flint, Michigan, in response to mounting evidence of lead contamination in the water supply. The public health crisis was enormous, particularly because of the devastating effects lead can have on children’s lifelong development, including decreases in IQ, learning difficulties, and a host of other behavioral and physical conditions.

Approximately 30,000 people in the Flint area already were enrolled in Medicaid at the time of the emergency, enabling Medicaid to provide immediate access to medically necessary diagnostic and treatment services. In addition, within a month of the state of emergency being declared, Michigan sought and received a Section 1115 waiver to broaden Medicaid coverage and access.

Medicaid’s Response to the National Opioid Epidemic

Medicaid has been at the forefront of the country’s ongoing response to a vast and deadly opioid crisis affecting an estimated 2 million Americans who are addicted to prescription pain relievers, and more than half a million who are heroin users. It plays a particularly important role in the 32 states (including the District of Columbia) that have expanded Medicaid under the ACA, allowing 1.2 million individuals with substance use disorders (SUDs) to gain coverage. In these states, Medicaid has infused an estimated $4.5 billion per year in funding for vital SUD treatment and recovery services, as well as mental health services.

As the opioid crisis has taken hold in recent years, Medicaid programs across the country have incorporated a host of strategies to enhance coverage and benefits for individuals with (or at risk for) SUDs. In July 2015, the Centers for Medicare and Medicaid Services (CMS) announced several measures giving states the flexibility to overhaul SUD benefit packages and delivery networks and allowing states to expand access to Medicaid-funded residential treatment services. In response, many states have answered the charge, using their Medicaid programs to:

  • Bolster and incentivize screening for SUDs among primary care providers;
  • Expand coverage and access to medications used in medication-assisted (MAT) treatment for SUDs;
  • Add all forms of naloxone (a drug that can reverse an opioid overdose) to preferred drug lists;
  • Expand the availability of recovery and peer support services; and
  • Institute prior authorization requirements and other review criteria for opioid prescriptions to help prevent addiction.

Conclusion

The Medicaid program has served as a valuable tool for states in quickly addressing the health needs of people affected by public emergencies and health crises. As currently designed, Medicaid gives states immediate access to federal matching funds that can be used to respond to the unplanned costs and burdens associated with major disasters and public health crises. The flexibility inherent in the matching rate structure, combined with the option to change program rules or pursue waivers, allows states to mount rigorous and rapid responses to disasters and epidemics. Were it not for this flexible design, states may be required to rely exclusively on their own funds, await congressional approval of funding or, in the worst case, mount a weak or diminished response that fails to mitigate or even prolongs the event’s effects.