Medicaid’s federal-state partnership structure has long permitted states to adopt modifications to coverage design, including benefits and cost-sharing. That structure, combined with an Administration signaling its support for greater state flexibility and funding constraints, could produce substantial shifts in state Medicaid policy.

In this context, state legislators will have growing influence over Medicaid policy. State Medicaid agencies often must work with state legislators to obtain authorization and appropriations for program changes. And as seen in states like Missouri, Virginia, and Florida, state legislators also have the power to stop Medicaid expansion in its tracks.

Jane Zhu, MD, MPP, National Clinician Scholar, University of Pennsylvania

Understanding state lawmakers’ views on proposed Medicaid policy changes provides an important look at the direction the program might take in the future. Manik Chhabra, David Grande, and I conducted a survey evaluating the uptake of specific proposals among state legislators, using the National Conference of State Legislators database. The take-away is that there is a glaring divide between Republican and Democratic state legislators, with significant partisan endorsement of certain policies. Broadly speaking, our findings suggest that different sets of policies could gain traction in the 32 states that currently have Republican-controlled legislatures, and face opposition in states with Democratic-controlled legislatures.

Our findings highlight that current hot-button issues in Medicaid policy, like work eligibility requirements and drug testing of beneficiaries, have achieved particular salience among Republican state legislators. These policies also have relatively high levels of public support. A Kaiser Family Foundation Health Tracking Poll from June 2017 – conducted around the same time as our survey – also showed large support among the public for work requirements and drug testing of Medicaid beneficiaries (70 percent and 64 percent, respectively).

The rapid uptake of work requirements, which have never before been permitted in Medicaid, is of particular consequence. Four states now have approved Medicaid waivers to implement work requirements, and 10 more are considering or seeking similar waivers. However, evidence suggests that most adult beneficiaries are already in working families or working themselves, and concerns grow over possible losses in coverage.

Legislators’ support for work requirements in our survey suggests that other states may adopt this policy. It also highlights the importance of evaluating and monitoring its effects, and disseminating this information to state legislators and other stakeholders.

Our survey also revealed a few points of agreement, including support for reducing drug prices. Moreover, few respondents – both Republican and Democrat – favored capping enrollment, reducing services and benefits, or reducing Medicaid’s income eligibility threshold, all of which could be consequences of recent health reform proposals debated in Congress. For example, the Graham-Cassidy bill, which may be considered again in the fall of 2018, featured a block grant program that would cap federal funds available for state Medicaid programs, and shift funding from states that expanded Medicaid to those that did not.

The Trump administration’s proposed FY2019 budget likewise included cuts to Medicaid. These discussions about Medicaid reform at the federal level appear to counter signals at the state level, where more state governors proposed Medicaid enhancements in their most recent budgets than those proposing restrictions. As was the case with recent debates about repealing the Affordable Care Act, state legislators could find themselves to be influential voices in discussions around major changes to Medicaid financing and programs.

The Affordable Care Act expanded Medicaid to 11 million working-age adults, and set out to create a more uniform floor for Medicaid eligibility and benefits. As states gain more autonomy over their Medicaid programs, policy decisions will be strongly influenced by the balance of power within each state’s legislature. If our results hold true, then Medicaid will increasingly vary between “red” and “blue” states. It remains to be seen how this divergence will affect millions of low-income and disabled individuals across the country.