Trump Administration Announces New Medicaid Program

The Trump administration announced Jan. 30 that it would begin allowing states to pursue fixed amounts of money for most low-income working adults who receive Medicaid coverage in order to attempt to cap spending on the Medicaid program. Under the new program, states will be able to choose upfront how much they want to spend on their adult Medicaid population and receive the federal share as either a fixed rate or lump sum for each beneficiary. 

The population affected by the new program, known as the Healthy Adult Opportunity, includes adult beneficiaries under the age of 65 who are not otherwise eligible based on a disability or need for long-term care. Michigan has already expanded Medicaid coverage to this population. While this announcement could offer new flexibility to the state to make changes to its Medicaid program, such changes could mean inadequate aggregate Medicaid funding for Michigan in the future, and risk that the state would have inadequate funds to meet the needs of beneficiaries with unexpected, complex, and expensive medical needs.

The announcement from the Trump administration comes after Michigan and other states implemented work requirements for Medicaid beneficiaries. Michigan’s work requirements took effect this year, and all necessary forms and resources are available on the Healthy Michigan Plan’s work requirements website. To date, when states implemented work requirements, the change resulted in a remarkable loss of eligibility, even for people who were working the required number of hours. New regulations to allow for reduced benefits and additional out-of-pocket expense also need evaluation to determine the impact on coverage.

The MHA is evaluating the Healthy Adult Opportunity and will share its perspective with state policymakers and members. For more information, contact Laura Appel at the MHA.