2025 Rewind: Our guests recount the promises and hurdles

(00:00)
[instrumental music playing]

Mark Masselli (00:04)
Right now, the American healthcare system is starting to feel the effects of the changes Washington policy
makers put in place earlier in the year. It's all because of what President Trump called the “one big, beautiful
bill” this year. We heard from the bill's supporters and skeptics, Margaret,

Stephanie Carlton (00:22)
As I talk about a role of chief problem solver. That is front and center for us at CMS. given a large part of the
reforms in one big, beautiful bill, are really focused on things that we will pick up the baton, from Congress,
once they pass a bill. and most of those are in Medicaid.

Margaret Flinter (00:41)
And who can forget the six week government shutdown? It was largely over healthcare and healthcare
stakeholders were very concerned as it dragged on. What would it mean for families and patients who depend on
the government for their healthcare?

Shawn Martin (00:54)
First And foremost, I would encourage them to think about the families that are, are being impacted. And
certainly, there are, issues that are a part of the shutdown or a part of the negotiation that, are going to impact
about 20 to 22 million families. There are issues that, need to be discussed and resolved that impact affordability
and access, to healthcare.

Margaret (01:16)
This is Conversations on Healthcare.

(01:18)
[instrumental music playing]

Mark (01:29)
Well, welcome back to everyone to Conversations on Healthcare and our 2025 Rewind, as well as our look
ahead program. Much of the healthcare news this year dealt with something that happened on July 4th. That's
when President Trump signed the, as he called it, the one big, beautiful bill into law. I think Nancy Pelosi
might've called it something else, and its technical name is HR one. The legislation cuts 900 billion over 10
years from the Medicaid program. Shortly before Congress voted for the plan, we spoke to Stephanie Carlton,
the Deputy Administrator in Chief of Staff at the Center for Medicare and Medicaid Services. Margaret, our
interview there Took place at Aspen Health Ideas. and she explained the administration's perspective on why
such large reduction is needed, even as experts predicted that it could lead to 10 million more people becoming
uninsured.

Stephanie Carlton (02:27)
One is the work requirements. and as we think about work requirements, they're asking folks to really engage in,
in their communities, if they're receiving benefits through the Medicaid program, and that could take several
different forms. One could be getting a job; another could be volunteering in their communities. Another could
be education retraining for a job that they're interested in. But the idea is how do we get people to engage with
their communities? And we really believe that is something that is good for humans. It's good for us to engage
with our fellow human beings. It's good for us to have a way that we demonstrate and feel purpose in our lives.
And so, we think this is, a major reform in it. It's, not a new concept, to be honest. This is something that
President Clinton worked with Speaker Newt Gingrich on back in the nineties to do those kinds of reforms and
other, federal programs, like the welfare program or what's now called, TANF, Temporary Assistance for Needy
Families. and so, this is something we've seen over the last several decades, make a difference in people's lives,
and we think it's something important to bring to Medicaid. So that's what I would say is the first major part of
the Medicaid reforms. a second is, is something that applies both to Medicaid, and to the exchanges. the, the
programs that we administer through CIO. and that's just making sure that we've got the right folks on these
programs. we are committed to really delivering benefits to those who are truly eligible. But there's a lot of
things that during the COVID Pandemic that we just didn't do as a government. an example of that would be
asking folks to share documentation that their income level is what they say. It's, this isn't a crazy new ask. It's
something that has been part of a lot of federal programs to determine eligibility that we are restoring to both
Medicaid and, exchange subsidies as part of these reforms. Just to make sure that the people who really need

those programs are the ones that we are, signing up and enrolling. In fact, on the insurance side of things, when
we came in in January, we noticed there was a lot of folks that were enrolling, in the marketplace exchanges that
found out they were enrolled after they'd been on the plan for a year. Think about that for a second. they actually
found out when IRS sent them a note saying, “Hey, we need you to reconcile your income with the subsidies
that you were getting.” And that's something that's hard for a consumer to get surprised. And they didn't actually
benefit from being on health insurance the year before that. And that's not how anyone designed those programs
to work. And so, we think about that is just restoring common sense to how we sign people up for those
programs. 'cause we want them to work for the people that, are truly eligible for those benefits. a third major
piece is, around making sure that we target payments to providers that participate in the program. Well, through
Medicaid managed care managed care companies will set up networks. They will determine payment amounts,
with providers. and then they are responsible to make sure that the networks are adequate for the people who
need that care. There's more we could do to make sure that is working well, but we have a process set up for
that. And then through various, changes over the years, there have been these things called state directed
payments that have been added on top of that process. The goal at the beginning, you know, came from a good
place, which is to say the states want to add extra payments for providers that are doing interesting things on
quality. That's really how it started. Although when we started looking at the data, there's only half of the states
that were complying with the quality plans that they, they were, they were committing to us to do. so, it wasn't
really fulfilling the quality objective. and then what happened during the Biden administration is those rates,
added up to commercial rates, or they were allowed to go up to commercial rates. And states are at varying
levels towards that cap called the average commercial rate. But as we sat back and looked at it and said, well,
you know, these are providers who are committing, to society, to vulnerable Americans that they're gonna help
with their healthcare needs. and, and we have historically paid them at Medicaid rates or often up to Medicare
rates. but paying up to commercial rates kind of changes the focus of the program where it becomes more about
facilities profiting, more than making sure patients are taken good care of. And so that's what we've said, “Hey,
we still wanna pay appropriately, but Medicare is a better cap on those payment rates than commercial rates.”
So that's really the third big area. and then Margaret, to your question, and to Mark's, what, what will CMS has
to do, should Congress pass that bill? We're gonna be real busy, real soon, doing the implementation of that.

Mark (07:28)
You know, we're recording this now and, people may hear it after the bill's been passed, but the house and
Senate are still working on the legislation. We had the opportunity to talk with, Governor Sununu just a few
minutes ago, listen to him and, former governor of New Hampshire Republican, and who was worried about the
responsibilities that states will have financially, with the new bill. And again, it's still in the works. the Senate
has a draft. The house has passed a version at this point, just worried about whether or not there's a financial
capability, at the state level. And I'm wondering sort of, not to get into the details of your conversations with
governors, but I'm sure there's some anxiety because it seems like some of what's happening, at least in the
house, in the Senate that you'll have to administer is, some real, shift of responsibility in terms of things that
won't be there, in terms of reductions that the states will have to address all at once. And I'm wondering how
you think that needle is going to be thread, and are you having those conversations now with states about trying
to understand what their financial responsibilities will be if the program is reduced?

Stephanie (08:51)
Yeah, absolutely. Great question. Anytime you, make changes to Medicaid, governors start asking a lot of
questions, and they ask hard questions, and they're good questions that we need to be ready to answer and say.
Absolutely. We've spent a lot of time talking to governors, to state health secretaries and to state Medicaid
directors about the implications of this. and the implications really do depend on which part of the bill we're
talking about. So, on work requirements, that is something we would partner with the states on implementing.
We believe that we could do that in very different ways than it's been tried before. using technology solutions
that are much quicker to implement and that are much more consumer friendly to implement. but that's
something we'll work in partnership with the States on.

Mark (09:39)
Is that because people have said that administrative burden might be too great for the states to manage?

Stephanie (09:44)
Yeah, and that's why we say, look, it is 2025. Technology allows you to do things differently. And much more
quickly. And in a way that, you know, consumers use their smartphones for all kinds of things. And if we're able
to develop a solution with states, with governors, that is very easy for states to get up and running, and that's
much easier for consumers to use, we address those administrative burdens in a way that really achieves the
intent, which is how do we get people engaging with their communities, which is, really a good thing for

humans, to be doing. so that's one area. that is something that, the information technology funding, there's a lot
that's available. So that wouldn't be a big new burden on the states. We actually match it at 90%, which is much
higher than the match for the rest of the Medicaid program. So, we don't anticipate that being, a big financial
burden on the states. It's a partnership we will do with them. Second, is is usually where we get questions, which
is around the state directed payments that I was mentioning. and there, it, it, it's not something that, directly,
some would frame it as, pushing burden back on the states. It's something that lowers the rates that go to,
providers like hospitals. and so that's something that could actually bring down the state costs and is designed at
lowering care and making sure that the payments that we send to providers in the Medicaid program is
appropriate. And that actually reduces, the state share as well as the federal share. and so, something that we
think is, much more reasonable. and then same thing kind of happens on the eligibility side, when, we're asking
states to be more diligent, and request the appropriate documentation for who they're signing up on the program.
That's also something when you get the right folks enrolled on the program, you're really targeting resources to
those who need it most. And that's not about shifting costs to the federal or state government. That's about
making sure scarce resources are targeted. but I, I will step back and make a macro point. We looked at the data,
and there's a lot of the original deal, if you will, between the states and the federal government. That has
changed where the federal government committed a certain percentage, it varies by states, but it's typically, it
could be as low as 50% and as, high as in the, you know, mid-seventies, to states and through various things like
provider taxes, and this is usually where it comes, they're sort of backdoor gimmicks. there's some folks that
would use a much stronger term like money laundering, where that that kind of a process pushes or shifts
responsibility to the federal government, which is not the original deal that the federal government had with
states and how we co-invest in the Medicaid program. And I think that's important just to keep in mind where
we need both states and the federal government, to live up to the original bargain, if you will.

Margaret (12:49)
While all of us in healthcare were closely watching these developments, so was KFF Health News Chief
Washington correspondent Julie Rovner during the middle of the legislative fight, she explained the intense
negotiations that were going on.

Julie Rovner (13:03)
There's a growing group of Republicans who are unhappy, with how many, reductions there are to the Medicaid
program because Medicaid really over the last decade or so, has sort of ceased to be an, you know, inner city
urban health program and become much more of a, of a support for rural areas and for people who voted for the
Republicans and President Trump, you have, Missouri Senator Josh Hawley, not someone I had on my bingo
card, as you know, a huge supporter of Medicaid basically jumping up and down and saying, we should not cut
Medicaid. It's a bad idea. of course, Missouri is one of those states that, added the, the Medicaid coverage as
part of its, state constitution. So, if the federal government stops paying as much for it, Missouri is really stuck
paying for that itself, which I think has something to do with Senator Hawley's resistance right now. But there
is, so there's a lot of resistance in a lot of places. and we'll see if they can overcome it. I honestly have no idea. I
know the pressure to, you know, do what President wants in the Republican Party is extremely strong. But there
are a lot of members who've been talking about a lot of these things like the, you know, state and local tax
deductions for quite a long time, and they don't look ready to throw it in either. So, we'll see.

Mark (14:20)
Of course, ultimately, President Trump and the Republicans were victorious. That means states that expanded
Medicaid are already seeing their federal matching funds gradually decrease in this current fiscal year. but the
Republican success only fortified Democrats in their belief that they needed to stand up for their policy views.
They found the opportunity to do so in the fall by saying any federal budget agreement needed to include an
extension of Obamacare subsidies. The impasse, as we all know, Margaret, led to the closing of the federal
government for 43 days. The longest shutdown in US history. We heard from a number of guests about what it
meant that the people they serve First American Academy of Family Physicians, CEO, Shawn Martin.

Shawn Martin (15:09)
First and foremost, I would encourage them to think about the families that are, are being impacted. And
certainly, there are issues that are a part of the shutdown or a part of the negotiation that, are going to impact
about 20 to 22 million families. There are issues that, need to be discussed and resolved that impact affordability
and access, to healthcare. But I think the message we continue to convey is that those discussions need to take
place in a bipartisan way. but they also need to take the appropriate steps to make sure American families are
significantly hurt or impacted in food insecurity. Making food insecurity worse. is, is not a means to, a better
tomorrow for a lot of families.

Margaret (15:54)
Well, legislation that was tied to the budget impasse also meant Medicare, telehealth flexibilities and the acute
hospital Care at home program expired. Kyle Zebley, the then senior Vice President of Public Policy at the
American Telemedicine Association told us what was at stake because of this.

Kyle Zebley (16:15)
These flexibilities, the acute hospital Care at home program were put in place by President Trump, have been
kept in place, ever since the beginning of the pandemic on a bipartisan basis through the Biden Harris
administration have already been renewed once by President Trump and his second stint in office. we are deeply
concerned that, even though we're not a spending provision, we have been attached to spending bills, that we are
gonna lapse for that first time since the onset of the pandemic. The stakes are enormous. we're talking about
millions of Americans, through the Medicare program, having access to telehealth services, or benefiting from,
the Forward Reaching Visionary Program, the acute Hospital Care at Home program, benefiting from these,
items that will lose out, starting, just early tomorrow morning, right around 12:01 AM and thereafter, it's a
tremendous setback for our community. It's all the more disappointing because these are popular bipartisan
provisions. I think it is an unfortunately emblematic of the dysfunction that we've seen, in Washington DC now,
for many years running, as I often have said, it's everybody's fault. It's nobody's fault. these are really good men
and women, we're honored, and, and don't take for granted the fact that our, our program's priorities are
bipartisan and popular. but if we, in particular in this rarefied space of clear agreement, are in a position where
we're only hours away from expiration, something is deeply wrong with how Congress and, and the feral
government operate. And it's a real shame. And I say that as somebody that's, you know, been in Washington
DC and always been honored to do so, for 16 years. But it's a real shame that it's come to this.

Mark (18:16)
Margaret, I don't think we boosted his career, but congratulations to Kyle as he was named the CEO of ATA
shortly after our interview. the shutdown also affected the Federal Drug Discount Program known as three 40 b.
Reporter William Newton of three 40 B Report explained how the impasse delayed approvals for a federal
rebate pilot and furloughed key staff.

William Newton (18:40)
We know that a significant percentage of HHS staff has been furloughed the site that basically the database of
covered entities and manufacturers in the three 40 B program is operational, but it has a message saying that it's
not being regularly updated due to the lapse in funding. So, there are a lot of big question marks, but certainly it
seems pretty unclear whether or not HRSA is gonna stay in schedule for this rebate experiment.

Margaret (19:06)
Well, mark, I almost hate to mention this, at this time of year, but there is a risk of another shutdown at the end
of January. And as of right now, there just is no solution to the Obamacare subsidy question. Those tax credits
expire at the end of the year. We'll certainly be waiting for any news, out of Washington. But as Washington
fought over the future of healthcare funding, Americans also recognize 2025 as the 60th anniversary of
Medicare and Medicaid, that that's a pretty landmark anniversary for people who really Yes. Follow, health
policy and healthcare in the United States. Mark Updegrove is the president and CEO of the LBJ Foundation,
and a presidential historian for a BC News. He shared his thoughts about the anniversary and the impact of these
programs on life in the United States.

Mark Updegrove (19:59)
In 1965, one third of American's population, over 65, lived in poverty. LBJ, among other things, is known for
the war on poverty. The, the war he waged on, poverty in our nation. And, and one of those things necessitated,
ensuring that Americans who couldn't afford the most basic healthcare needs could do so through an insurance
policy, allowed through Medicare. And, so it's, it's something that Harry Truman had tried to push up the hill,
wasn't able to do. So, John F. Kennedy did so as well. but Lyndon Johnson got it done in 1965, and it's been
woven into the fabric of our country ever since.

Margaret (20:47)
Well, let's set the scene by talking a little bit about what was happening in the country six decades ago. Those
were interesting times, just like these are interesting times. The US had just elected Lyndon Johnson as president
in his own right following John f Kennedy's assassination. he was really at the height of his political power in a
long political life. Tell us who was he at that point, as you've come to know and understand him through
history?

Mark U. (21:15)
You know, you're absolutely right, Margaret. 1965 is the high tide of, the, the, the Great Society and of the
Johnson Administration. he of course, takes over, as president in the wake of the assassination of John F.
Kennedy on November 22nd, 1963. He rides out that year as an accidental president becomes elected in his own
right, in 1964 with the largest electoral mandate in American history. 61% of the popular vote, rides into the
White House with this mandate, and he knows the ephemeral nature of political capital. So, he uses 1965 to get
as much done as he possibly can. And during the course of that year, you see the creation of Headstart and Vista
and the Department of Housing and Urban Development, the National Endowment for the Humanities, the
National Endowment for the Arts, the Highway Beautification Act, the the Clean Air Act, the Clean Water Act,
the Immigration Act, the most sweeping immigration reform in the history of our country, the Elementary and
Secondary Education Act, the Higher Education Act, the Voting Rights Act, and the creation of Medicare and
Medicaid. And that is one year of the Johnson presidency. It's stunning.

Mark M. (22:40)
Well, you know, Margaret, I had the chance to read Robert Carroll's four, four books on, on Johnson and, and
Mark, you know, it's, he really was able to use his political strength, to push through so many things, but, in
particular the federal health insurance program, and that, as you said earlier, that was really a legacy that, others
had tried to, to get through. How did he do It?

Mark U. (23:06)
You know, I, let me just go back for a moment, ed and mention again that, that, that Truman had really pushed
hard for this. Yeah. And I think you had, the resistance of the medical community that doctors in particular, they
thought they were gonna lose money if you went to a, a federal, you know what they considered social
medicine. J John F. Kennedy, the year of his death had a huge rally at, at Madison Square, Gar Garden to push
for, for Medicare. Lyndon Johnson did it for a number of reasons. Number one, he was a, he was a student of
power. I, I, I think he understood in intrinsically the way that power worked, and he could work on lawmakers
in a way that Harry Truman and John F. Kennedy could not. He just had this great ability to get things done.
Number two, I think it was an idea whose time had come. you had, two thirds majorities democratic majorities
in, in both the House and Senate, and there was this confluence of circumstance that circumstances rather, that
made it possible for progressive reform like that to go into place, despite the violent resistance of so many
Republicans and including, a Republican named Ronald Reagan, who had yet to be the governor of California
and president of the United States, but was a very active voice in the Republican Party, and said that it would be
the ruin of America to see, something like Medicare and Medicaid go through it would, it would lead to, to
greater socialism in our nation.

Mark M. (24:36)
Well, Margaret, that took us back to 1965, and that really was a monumental year, just as this one has been.
We'll continue our 2025 rewind next week by looking at the progress of long COVID diagnosis and treatment
and where things are headed, exploring the technology innovations that's occurring in the healthcare field, and
hearing again from some famous names from healthcare causes that matter to them.

Margaret (25:03)
So, just a reminder, be sure to subscribe to our videos on YouTube. Find us on Facebook and X with our
account name, CHCRadio. As always, you can go online to chcradio.com to sign up for our email updates, and
please also share your thoughts and your comments about this program. Happy Holidays. Happy New Year.

(25:24)
[instrumental music playing]

(25:26)
This copyrighted program is produced by conversations on healthcare and cannot be reproduced or remitted in
whole or in part without the expressed written consent from Community Health Center, Inc. The views
expressed by guests are their own, and they do not necessarily reflect the opinion of conversations on healthcare
or its affiliated entities.

(25:47)
[instrumental music plays out]