The Medicaid program—which is overseen by the federal government, but managed on a practical level by the state governments, with some federal funding mixed in with state funding—is once again in the news headlines, as the Republicans in Congress are expressing the desire to cut or modify the program in significant ways. There are many policy issues and questions around Medicaid, but what those who have worked in the Medicaid world will note is that a great deal of innovation has been taking place in state Medicaid programs in recent years and months.
Indeed, over the past few years under the Biden administration, Section 1115 waivers flourished under an expanded waiver policy, allowing more flexibility for states to use Medicaid funds based on the unique challenges they face, be it the opioid epidemic, mental health crisis, medical debt, and so on. Through those waivers, providers have been able to offer mental health services, expand telehealth reach into rural areas, develop substance abuse programs, and initiate programs with community-based social service organizations. What will happen under the new Congress and incoming administration remains unknown.
One expert who has been working in the area for years is Gary Jessee, senior vice president of national consulting at the Philadelphia-based Sellers Dorsey consulting firm. The Austin, Texas-based Jessee, who is the former Deputy Executive Commissioner for Medical and Social Services in Texas, the largest division in that state’s Health and Human Services System, spoke recently with Healthcare Innovation Editor-in-Chief Mark Hagland regarding recent innovations in Medicaid programs, and some of the potential opportunities for additional innovation going into the future. Below are excerpts from that interview.
What are the most pioneering things that states are doing with the Medicaid waivers up to this point?
It depends on the waiver. Medicaid is the single largest source of insurance for low-income people in this country. It’s estimated that one in five Americans is accessing Medicaid. And as we always say, if you’ve seen one Medicaid program, you’ve seen one Medicaid program. The federal government sets terms around eligibility; but there are 1115 waivers that are more like demonstrations; 1915C waivers are designed to provide long-term supports. We’re talking here about Medicaid expansion. As part of the Affordable Care Act, Medicaid expansion allowed for expansion to adults up to 150 percent above the federal poverty level. The ACA provided an option for states to adopt Medicaid expansion. And 41 states have opted to expand Medicaid eligibility to that level; ten states, including the one I’m in, have chosen not to do so. The goal was to expand insurance coverage, but also to help providers with their uncompensated care burdens.
Some states focus their efforts through their 1115 waivers. And some states that have expanded Medicaid have included work requirements, and those received significant pushback from our federal partners, and most of those requirements were abandoned.
So what’s the leading edge now around innovation?
You’ve got a standstill—significant Medicaid expansion with some holdout states, and those holdout states, if you look at the map, you know where you are, and it’s probably not surprising that Texas and Florida are on that map. In Florida, they have a committee that put together an initiative that would make expansion a ballot measure in 2026, but the ballot measure was suspended in 2020. In Texas, legal activity happened, primarily on the part of Democrats. But you end up with states whose legislatures might have considered expansion, but they haven’t adopted it. In Mississippi, for example, the bill just died because they couldn’t come up with a consensus proposal. And it becomes a legislative decision. Because even with expanded Medicaid and reimbursement on the federal side, states are still on the hook for committing revenues to ongoing coverage. And it’s important to keep in mind that Medicaid is still a predominant payer for birth in this country; 51 percent of births are insured through Medicaid.
Among the states that have moved forward, what are the most exciting programs?
They’re similar: new people who are being covered now are individuals who previously didn’t qualify. So you’re providing care for lots of people who otherwise would not have had it. Our federal partners saw this as a way for them to expand coverage; states have adopted it, and it’s resulted in millions of people accessing coverage.
State Medicaid programs are over time becoming managed care programs, with a focus on care management and population health management.
Yes, we estimate that over 72 percent of lives covered under Medicaid are being cared for under a managed care model. I was involved in leading that effort in my state. I’m strong supporter of managed care. The goal is to have access to preventive care, and make sure people are getting the right care at the right time. And managed Medicaid helps to ensure that individuals are access integrated, coordinated care, over time. And having the ability to manage someone’s care, and to meet the needs of the providers of that care, all those are important. FFS is just non-managed care. With managed care, you also have key quality measures, and the ability to withhold care from managed care organizations for failure to meet quality measures. You don’t realize your full premiums unless you deliver the quality. Also, there’s this impression that the goal of managed care plans is to limit care. But the reality is that, if you’re a health plan and you’re not spending your premiums on care under Medicaid, you’re likely to get a reduction in premiums the next year. And covered individuals can choose their plans. So it’s become a meaningful service delivery vehicle.
Has managed care improved care management over time, consistently?
Yes, it has. One, we realized early on that the only way that you can individualized care for members—what we’ve learned is that population health is the key to success. And having access to data and perform predictive modeling, is how plans achieve success. They leverage partners to really manage this data on behalf of members. So plans can look at claims data and forecast future needs. Population health is the key to care coordination; they can actually predict what will happen to a member in advance. And while SDOH are not new, there are health inequities that exist for people in Medicaid. And while people need access to services like hospitals, pharmacy, and primary care and specialty physicians, some of the challenges they dealt with are strongly connected to SDOH. So you’ve seen significant expansion around food as medicine or addressing food insecurity, and access to housing. Look at someone with severe, persistent mental illness, and they’re not receiving consistent access to care. And individuals might not stay on their medications, and then might lose their housing. And how can I manage care for someone who’s not in suitable or stable housing, where they can be supported? So you’re seeing lots of work around the social determinants of health.
And you can look at health inequities, and based on the demographics of people on Medicaid, large numbers of people of color in particular might be living in food deserts. And let’s face it, if someone is low-income, with no car, might affect your ability to see your doctor. Similarly, we’re seeing the need for employment assistance and supported employment. Those are all mechanisms connected to variables around personal success in life and in their healthcare. You’ve seen an explosion in how managed care plans address SDOH and how states are guiding their managed Medicaid plans in addressing the social determinants of health [SDOH]. And you’re seeing a cost-benefit in, for example, instead of an inpatient program, they might provide an alternative. So you’re seeing an intense focus around the social determinants. And this isn’t a new phenomenon; it’s been around for a long time. But we’re seeing specific attention being applied. We’re also seeing an explosion of entrepreneurs and innovative organizations bringing care delivery in different ways.
This is an area where digital health can make a big difference, correct?
Yes, absolutely! There’s this perception that people on Medicaid don’t have smartphones and don’t make use of technology; that’s false. If you were going to have to travel across the city in a car or on a bus—think of a mom with six kids, loading them into a car or onto a bus; with telehealth, that mom can have access to care in minutes. Digital technology—everything from telehealth to remote patient monitoring—the ability of individuals for example to take vitals and transmit that data to healthcare providers—you’re seeing an explosion in those capabilities. And there are companies addressing food insecurity, or nutrition counseling. And you’re seeing an explosion in technology for care managers: they can immediately tap into the home. In the old days, all that would require prior scheduling.
This is an awesome time: we’re seeing innovation at an all-time high, and improved access. And our federal government and state governments are becoming more prescriptive about what they want. Now, it’s very mature: if you’re a managed care plan, we’re going to hold you to standards around how you manage your network, the number of providers you have, quality measures: those are all connected to making things better.
I think the capability for innovation is at an all-time high, including the adoption of digital health tools, as well as drugs and treatments targeted to specific conditions disabling to people—obesity, HIV, plus hepatitis C. This is allowing us to be able to address and be able to address individual needs. Medicaid is a big problem, but it’s filled with multi-faceted approaches to care, driving by population health and supported by contractual aspects of contracts. And then driven by health plans making sure they’re using every kind of technology available to them to reduce costs and improve access at an early moment.
And most Medicaid recipients now do have smartphones?
Yes, they do, and many health plans are providing smartphones; they understand the need to care for their Medicaid members, and they’re providing that access through smartphones and digital technology. And there are a lot of smart people on Medicaid. And Medicaid is a safety net: and for everyone in this country, you’re one diagnosis or car accident away from being in that situation. There are lots of people who never dreamed they’d be on Medicaid; but guess what? Things happen. Debilitating things happen. And Medicaid is designed to be able to meet the people who need help. Also, lots of states are providing access to care for kids with disabilities. And lot of people on Medicaid live with a stigma. But we estimate that 85 percent of people have smartphones, and they know how to use them. And Medicaid programs are building programs around smartphones. And you wouldn’t have entrepreneurs developing digital solutions if that weren’t true. And I don’t need a letter from a health plan to get an immunization. I could text you today to tell you, we’re providing free flu shots; come on by. So we’re treating in Medicaid the way everyone else should be treated and wants to be treated.
What will this landscape look like a few years from now?
We had the public health emergency that no one was prepared for; and our healthcare system had never really worked through something that devastating to so many people. And as we emerged out of the public health emergency, we were faced with so many challenges, including that many people who had received access to care through Medicaid, no longer have it. And we’ve seen challenges with health plans’ own workforces, and revenue challenges, resulting in some plans discontinuing some innovative programs.
So a few years from now, I think it will look like what we had before. But in the panel I was on yesterday, if you look at the cost of care, it’s increasing; and technology cost is increasing. But if I introduce a solution that reduces your costs long-term—sometimes you’re making an investment for something you realize later. So I think that health plans in general and Medicaid plans specifically, will continue to mature. And the new Medicaid regulations just released, are continuing to refine standards. And the federal standards are really designed to expand consistently and quality, including in such areas as network adequacy and wait times.
So we’re going to continue to refine the approach. I think that managed care organizations do a better job in managing care than any state did on their own. And a state might have a disparate approach to care management. So having these things integrated into one managed care solution and program, means that a plan member can access more coordinated care. So you have to establish trust and improve care coordination. You’ll continue to see the expansion of managed care, and the expansion of the use of digital health tools. And we’ll continue to have to address the ongoing issues facing people in this country. And Medicaid has stood behind the people who help the most.
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