Where Is Medicaid Headed? Medicaid Directors Share Their Reflections

By: Dianne Hasselman

The pending end of a multi-year federal public health emergency is just one of several market forces that Medicaid Directors are watching as they set strategic direction for the program. Find out what’s on their mind.

By September 2022, it’s estimated that the Medicaid program will cover one in three Americans. That’s 110 million people, up from 88 million right in 2019, or a 25 percent increase.1 Medicaid enrollment surged in direct response to a federal mandate requiring continuous enrollment for the duration of the public health emergency. By stopping disenrollment, no one would lose health insurance during the pandemic. In addition to providing continuous coverage, Medicaid’s growth helped stabilize a health care delivery system reeling from the shock of COVID.

In the not-too-distant future, Medicaid agencies will start right-sizing the program by reassessing eligibility for every Medicaid member and removing people who no longer qualify for the program, as required by law. There will be other tasks related to reverting back to Medicaid’s core mission, but eligibility redetermination dwarfs them all.

As they look ahead to this transition, how are Medicaid Directors thinking about the program? How has their world changed over the last two years, and how are they leading their programs forward as a result? The following reflects what’s top of mind for these executives in charge of the largest health care program in the country.

Medicaid Directors have changed as leaders in many ways, one of which is learning that they’re responsible for state agencies that can go big – really fast. Medicaid was the country’s primary means of ensuring citizens could get and keep health care coverage through the pandemic via the Families First Coronavirus Response Act (FFCRA). It was a major lifeline that kept businesses and communities afloat with enhanced federal funding from the American Rescue Plan Act (ARPA). States demonstrated that Medicaid rises to the occasion when it is needed most, and Directors expect this experience will be a touch stone and reminder for future occasions that Medicaid can be nimble and innovative.

Directors are revisiting their strategic plans, often developed during the “normal” days of early 2020 that prioritized value-based purchasing and multi-payer payment reform, and asking: Are these strategies all relevant anymore? Which plans remain and where do we pivot to a new strategy based on what we’ve learned over the last two years? Addressing disparities in health outcomes has taken on a greater significance and has become a lens through which policies are reviewed and considered. Health care affordability is still where the nation needs to go; however, major parts of Medicaid’s delivery system (e.g., children’s health, long-term services and supports, behavioral health) remain fragile and these providers will need baseline stability before being able to make major inroads into value-based purchasing.  Directors feel compelled to keep payment reform on the radar – if not for 2022 then perhaps for 2023 or 2024 – but are questioning whether historical efforts even had their intended effect.

As Medicaid Directors, they are leading through a time of historic federal investment in the health care system through ARPA. As responsible financial stewards of taxpayer dollars, Directors are striking a balance of getting much needed resources to parts of the delivery system, like behavioral health, primary care, and home- and community-based services that have historically experienced underinvestment. The reality is that these sectors may be too overwhelmed and/or underdeveloped to effectively absorb major infusions of new short-term funding. A longer-term, more sustainable approach that enhances the administrative sophistication of these sectors, strengthens their familiarity with Medicaid, and equips them for future reform is necessary.

But the largest obstacle Directors face in 2022 – and for the foreseeable future – is their ability to recruit and replenish the anemic state workforce. Yes, many sectors are challenged to fill open positions; however, the magnitude of vacancies and retirements faced by state government is unprecedented. And although state positions can offer more stability, Medicaid agencies are competing against the private sector with higher salaries and other competitive advantages.

Another factor no doubt is contributing to the workforce challenges: an increased lack of trust in public service. Directors are deeply troubled by the mistrust Americans have in state government, which has grown over the last two years. They often joke that they chose to become Medicaid Directors because of the glamour and lucrative nature of state service, but the reality is that their good intentions have become deeply suspect. Their response is to be even more transparent, and to communicate early and often with legislators and advocates about the Medicaid program, particularly about its nuances and trade-offs.

As major employers, Directors are creating opportunities for growth and professional development of state staff, supporting rising leaders, and prioritizing onboarding new staff and succession planning. They are reflecting on “career sustaining behaviors”2 that help leaders avoid burnout during a time of sustained crisis. They are also thinking about how to change the culture and value of a career in Medicaid. How do we reframe public service and elevate its purpose, meaning, and value?

Finally, Directors are even more aware that they are leading their programs in a broader ecosystem that includes other public and private employers and payers, federal partners, and state and local stakeholders. For too long, Medicaid has been the nation’s de facto payer for behavioral health care, nursing home care, and children’s health care. And with other strengths and vulnerabilities exposed by pandemic changes and pressures, it is clear that Medicaid in the future will need this ecosystem to continue to play its critical role for millions in our nation. Sister state agencies, elected officials at every level, health care providers and health care advocates must join Directors in this transformative moment. While Medicaid can surge and do big things fast, states must have partners who are willing and capable of sharing the burden and the challenge of leading our health care system into the future.