Since taking office, President Trump has laid down an extensive record on health care, beginning on day one with his clearly-stated intention to repeal and replace the Affordable Care Act, and continuing through his most recent response to the COVID-19 pandemic. In addition, the Trump Administration has made or proposed many changes to health policies and programs that could have a significant impact on health coverage and health care.

President Trump’s record on health care illustrates his priorities. An incumbent president’s record is always relevant, but especially so for President Trump, who has not released more conventional campaign policy proposals. Moreover, the President’s response to the COVID-19 crisis, and its economic consequences could influence how voters view the president in terms of his character, his leadership and his ability to protect the nation – particularly given widespread and ongoing transmission of the virus in the U.S. and evidence that the U.S. has fared relatively poorly compared to peer nations.

From the start of his presidential term, President Trump took aim at the Affordable Care Act, consistent with his campaign pledge leading up to the 2016 election. He supported many efforts in Congress to repeal the law and replace it with an alternative that would have weakened protections for people with pre-existing conditions, eliminated the Medicaid expansion, and reduced premium assistance for people seeking marketplace coverage. While the ACA remains in force, President Trump’s Administration is supporting the case pending before the U.S. Supreme Court to overturn the ACA in its entirety that is scheduled for oral arguments one week after the election.

The Trump Administration has moved forward on many other health care fronts. The Administration has proposed spending reductions for both Medicaid and Medicare, along with proposals that would promote flexibility for states but limit eligibility for coverage under Medicaid (e.g., work requirements). The President has made prescription drug prices a top health policy priority and has issued several executive orders and other proposals that aim to lower drug prices; most of these proposals, however, have not been implemented, other than one change that would lower the cost of insulin for some Medicare beneficiaries with diabetes, and another that allows pharmacists to tell consumers if they could save money on their prescriptions. The Trump Administration has also moved forward with an initiative to improve price transparency in an effort to lower costs, though it is held up in the courts. President Trump has made other policy changes that have had a direct impact on reproductive rights, immigration, and on other health care issues that convey his priorities for the future.

This issue brief provides a detailed overview of the Trump Administration’s record on health care issues, including major proposals and actions on health care during his tenure in office relating to: the Administration’s response to the COVID-19 pandemic, the ACA and private insurance markets, Medicaid, Medicare, reducing prescription drug and other health care costs, sexual and reproductive health, mental health and substance use, immigration and health, long-term care, HIV/AIDS policy, and LGBTQ health. A separate resource compares President Trump’s record and proposals to those of former Vice President Biden.

COVID-19 Response

The COVID-19 pandemic, the worst health crisis facing the global community in more than a century, has taken a particular toll on the United States. Although the U.S. only represents 4% of the global population, it accounts for 23% of all COVID-19 cases and 21% of all deaths as of early September and ranks number one among high income countries as measured by cases per capita. The Trump administration has not established a coordinated, national plan to scale-up and implement public health measures to control the spread of coronavirus, instead choosing to have states assume primary responsibility for the COVID-19 response, with the federal government acting as back-up and “supplier of last resort.” The President has downplayed the threat of COVID-19, given conflicting messages and misinformation, and often been at odds with public health officials and scientific evidence. Despite this, the Administration has taken a number of actions to address the pandemic, including declaring federal emergencies to free up resources and flexibilities, signing emergency spending bills passed by Congress, providing emergency use authorization for hundreds of tests and other devices, issuing guidance documents, and announced “Operation Warp Speed”, to produce and deliver coronavirus vaccines. On the global front, the Administration has reduced U.S. engagement in addressing the pandemic, including ended funding for the World Health Organization (WHO) and announcing withdrawal from WHO membership.

Affordable Care Act – Private Health Insurance

President Trump’s record on the Affordable Care Act (ACA) marketplaces and private insurance began on his first day in office, when he issued an executive order stating, “It is the policy of my Administration to seek the prompt repeal of the Patient Protection and Affordable Care Act.” Pending such repeal, he ordered executive branch agencies to exercise all authority and discretion available to waive, defer, grant exemptions from or delay implementation of any provision that would impose a fiscal or regulatory burden on any state, individuals, families, health care providers or health insurers. A few days later, the Administration cancelled advertising and outreach activities already scheduled and paid for to promote signups during the final week of Open Enrollment in 2017; enrollment during that week declined compared to the same period in 2016. In addition to supporting Congressional repeal of the ACA and a federal lawsuit to overturn it, the Trump Administration has taken other steps to modify how it operates.

Medicaid

Overall, the Trump Administration has made efforts to reduce federal spending for Medicaid and limit eligibility through proposed legislation and budget proposals, new state demonstration waivers and its support of litigation to overturn the ACA.

Medicare

In his most recent State of the Union address, President Trump said his Administration will “protect” Medicare just as he has vowed to protect Social Security. President Trump signed into law multiple pieces of legislation that had the effect of accelerating the insolvency of the Medicare Hospital Insurance Trust Fund. The Trump Administration has proposed changes to the Medicare program, including reductions in Medicare spending through changes (or proposed changes) to provider payments, and regulatory requirements for providers and Medicare private plans (Medicare Advantage and Part D).  The Administration has issued many proposals relating to Medicare prescription drug costs, most of which have not been implemented (See more in Reducing Prescription Drug and Other Health Care Costs Section).

Reducing Prescription Drug and Other Health Care Costs

The Trump Administration has issued many proposals to lower prescription drug prices and spending, although most have not been adopted by the Congress or implemented by the Administration through the regulatory process, and pending proposals are unlikely to be adopted prior to the November election. President Trump signed into law legislation passed by Congress that banned “pharmacy gag” clauses and accelerated the phase out of the Medicare Part D “donut hole” and is moving forward with an Innovation Center model that will lower insulin costs for some Medicare beneficiaries (to take effect in 2021). In addition, the Trump Administration has moved forward on a hospital price transparency initiative that aims to give consumers better information to help lower costs.

Sexual and Reproductive Health

The Trump Administration has made efforts to reduce access to contraception by issuing regulations that allow employers to opt out of the ACA’s requirement to offer no-cost contraception in its health plans and that exclude family planning clinics that provide or refer for abortion from the Title X family planning program for low-income people. The Administration has also sought to limit access to abortion coverage and care by appointing judges opposed to abortion rights and issuing restrictive rules and regulations.

Mental Health and Substance Use

The Trump Administration has taken steps to address the opioid epidemic and high suicide rates among veterans. The Administration also supports overturning the ACA and increased the duration of short-term health plans, steps that would ultimately reduce coverage of mental health and substance use disorder services and limit the scope of mental health parity rules. President Trump also proposed budget reductions to the Substance Abuse and Mental Health Services Administration (SAMHSA) and Medicaid, key funders for substance use disorder services. Most recently, during the COVID-19 pandemic, President Trump signed legislation providing some additional funding to SAMHSA and to support mental health services for isolated veterans.

Immigration and Health

Since taking office, the Trump Administration has taken numerous actions to reshape immigration policy. These efforts have included limiting entry into the country, including restrictions for humanitarian immigrants such as refugees and asylees; enhancing interior enforcement efforts and expanding the scope of individuals targeted for removal; and discouraging legal immigrants from using public programs for which they are eligible, including Medicaid. A number of these actions have particularly significant implications for the health and well-being of immigrant families, including their children, who are primarily U.S.-born citizens.

Long-term Care

The Trump Administration has proposed changes to Medicaid financing that would have affected the program’s ability to pay for long-term services and supports. In addition, the Administration supported repeal of the ACA which would eliminate some options for states to expand access to Medicaid home and community-based services. Prior the onset of COVID-19, the Administration proposed changes to relax certain requirements for nursing homes, and subsequently relaxed additional requirements at the onset of the pandemic while imposing new ones to prevent the spread of the virus. Since March, as the number of COVID-19 deaths in long-term care facilities increased substantially, the Trump Administration issued new guidance and waivers, established a new commission to make recommendations, required nursing facilities to report cases, deaths and shortages, distributed tests to facilities and made additional funds available to nursing facilities and assisted living facilities.

HIV/AIDS Policy

President Trump has taken steps to address the domestic HIV epidemic. In 2019, he launched a new effort, the Ending the HIV Epidemic (EHE): A Plan for America, which aims to drive down new HIV infections, especially in hard hit areas, and includes new funding for domestic HIV programs. It has helped to focus new attention and resources on HIV in the United States. At the same time, other actions of the Administration, such as ongoing attempts to overturn the ACA, which has helped to expand insurance coverage for people with HIV, and the removal of protections for LGBTQ people in health care, threaten to undermine the reach of the EHE. On the global front, the President has publicly supported PEPFAR, but called for significant budget cuts to PEPFAR and the Global Fund to Fight AIDS, Tuberculosis and Malaria each year.

LGBTQ Health

The Trump Administration has implemented or supported several policies that remove or reduce protections for LGBTQ people in in health care. Many of these actions have occurred against the backdrop of protections for “provider conscience.” In some cases, these policies have been halted or are still being considered by the courts.

Introduction

The first cases of a novel coronavirus were reported by the World Health Organization (WHO) in early January. Since then, the COVID-19 pandemic has become the worst health crisis facing the global community in more than a century. It has also taken a particular toll on the United States. Although the U.S. only represents 4% of the global population, as of early September, it accounts for 23% of all COVID-19 cases and 21% of all deaths, and ranks number one among high-income countries as measured by cases per capita.  In addition, most states in the U.S. are considered “hotspots”, with ongoing, widespread community transmission; shortages of testing and other needed supplies also continue. COVID-19 has significantly affected daily life in America, including the economy and school closures, and has emerged as an important factor in the 2020 Presidential election.  Polling data indicate that a majority of voters disapprove of President Trump’s handling of the outbreak and prefer Democratic candidate Joe Biden when it comes to tackling the pandemic. To gain a better understanding of how the candidates differ on their approach to addressing COVID-19, this document compares Trump’s record with Biden’s proposals. It starts with a broad overview of each candidate’s approach, followed by a detailed, side-by-side comparison.

Donald Trump

To date, in place of a coordinated, national plan to scale-up and implement public health measures to control the spread of coronavirus, the Trump Administration has chosen to rest the main responsibility for the COVID-19 response with the states, with the federal government serving as “back-up” and “supplier of last resort.” While this in part reflects federalism and the decentralized nature of U.S. public health, the lack of a national plan and strong federal guidelines have significantly contributed to a patchwork of policies, supplies, and outbreak trajectories across the country, and worsening community spread.

Early on, the President’s initial response to the new outbreak was focused on sealing U.S. borders and preventing entry of the virus.  President Trump moved to suspend entry from China on January 31, followed by others since. However, with community transmission already underway in the U.S., and challenges with screening arriving passengers,  travel restrictions were not effective in curtailing spread in the U.S. Meanwhile, the federal government was slow in bolstering public health capacities, such as testing and contact tracing, at the time the virus began to circulate domestically. As cases and deaths escalated, the gulf between what was needed and what was available grew quickly.

By mid-March, facing growing case numbers and seeing what had happened in other countries, several U.S. state and local jurisdictions began implementing stay-at-home orders and other social distancing policies. After conflicting messages from the President, who minimized the threat of the virus, the White House issued federal social distancing guidelines on March 16 for a 15-day period. Soon after, the President began pushing toward reopening, tweeting on March 22, for example, that “We cannot let the cure be worse than the problem itself. At the end of the 15 day period, we will make a decision as to which way we want to go!” and saying he hoped the country would reopen by Easter, with “packed churches.” The White House  extended the social distancing period through the end of April, and issued reopening guidelines for states on April 16. Still, even before the end of April, the President began encouraging Governors to reopen, although key reopening metrics were not yet met in most places. The President has also pushed for schools to re-open in-person even though community transmission has remained high in many places, and is much higher than it was in other countries that moved to re-open in-person schooling.

There have been ongoing challenges with COVID-19 testing in particular. These started with an early, faulty test developed by the Centers for Disease Control and Prevention (CDC) that resulted in a significant delay in scaling-up testing as coronavirus spread quickly in the U.S. They have continued through to the present with ongoing shortages of critical testing supplies; significant delays in turn-around times for results; and shifting and sometimes confusing federal guidelines that have been reported to be subject to political pressure. Yet the President said in March that “Anybody that wants a test can get a test,” and in May, “As far as Americans getting a test, they should all be able to get a test right now.” More recently, while Administration officials have continued to say that anyone who needs a test could get one, they have acknowledged the need to reduce turn-around times and continue to work to increase testing capacity.

Throughout the pandemic, and even as cases and deaths increased, the President has downplayed the threat of COVID-19. For example:

• On January 22, in response to a question about whether he was worried given the first report of known U.S. case, he said, “No. Not at all. And– we’re– we have it totally under control. It’s one person coming in from China, and we have it under control. It’s—going to be just fine.”
• On February 2, “We pretty much shut it down coming in from China.”
• On February 25, “We have very few people with it.”
• On April 28, “But I think what happens is it’s going to go away. This is going to go away.”
• On June 17, he said it was “fading away.”
• On July 19, “I think we’re gonna be very good with the coronavirus. I think that at some point that’s going to sort of just disappear. I hope.”
• On August 5, “It’s going away. Like things go away. No question in my mind that it will go away, hopefully sooner rather than later.”

The President has also given conflicting messages and conveyed misinformation about coronavirus and has sometimes been at odds with public health officials (including those in the government) and scientific evidence. For example:

• He has touted the use of the drug, hydroxychloroquine to treat COVID-19, despite the lack of evidence of its effectiveness, warnings of potential harms, and even after federal COVID-19 treatment guidelines recommended against its use.
• He suggested that applying ultraviolet light to or inside the body, or injecting disinfectant, could combat coronavirus.
• He has attributed rising COVID-19 cases to increased testing, despite the fact that this claim is not backed up by the data.
• He has questioned the use of face masks, and given inconsistent messages about their use, even after CDC guidelines recommended them. It was only in July that he began to wear one in public at times and talk about their importance.
• In pushing schools to re-open in person, he has said that children are “almost immune” and “don’t have a problem,” despite evidence to the contrary.
• He called the FDA’s issuance of an emergency use authorization for convalescent plasma, a potential treatment for COVID-19, “historic” and a “breakthrough,” even though the FDA itself said it “may be effective” and the National Institutes of Health COVID-19 treatment guidelines panel concluded that there were insufficient data to recommend either for or against it and at this time, it “should not be considered standard of care for the treatment of patients with COVID-19.”

President Trump and White House officials often publicly disagreed with the recommendations being made by federal officials and public health scientists. The CDC, which in previous national public health emergencies was very much in the public eye, did not give press conferences. The President has also publicly criticized Dr. Anthony Fauci, who has been the Director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health since 1984, and generally not appeared in public with him recently, unlike earlier in the pandemic.

Even as the administration’s primary strategy was to rely on states, it has taken a number of actions to address the pandemic. The President established a White House COVID-19 Task Force on January 27, even before the WHO had declared COVID-19 to be a Public Health Emergency of International Concern (PHEIC) (although leadership of the Task Force has shifted and its public-facing and internal activities have diminished). Three federal emergencies have been declared, enabling the authorization of funds and allowing the mobilization of resources and enhanced flexibilities to respond, as follows: HHS declared a public health emergency (PHE) on January 31 (renewed since then) and the President declared national emergencies under the Stafford Act and the National Emergencies Act, on March 13.

The President has also signed four emergency spending bills passed by Congress, which provide trillions to address COVID-19 and offer new flexibilities and relief for individuals, businesses, states, and localities.  He has activated the use of the Defense Production Act (DPA) to expand production, prioritize, and allocate supplies in the U.S., if needed, and this authority has been used in select cases. The Food and Drug Administration (FDA) has provided emergency use authorization for hundreds of tests and other devices and the CDC has issued more than 170 guidance documents on COVID-19. In addition, the U.S. has launched “Operation Warp Speed”, a significant initiative to expedite research, development, and distribution of coronavirus vaccines. Finally, numerous other federal agencies have acted to help ease the burden of COVID-19, such as granting state Medicaid programs additional flexibilities, accelerating Medicare payments to hospitals and other health care providers, instituting new protections for nursing home residents, and issuing a strategy for “Accelerating Progress Towards Reducing COVID-19 Disparities and Achieving Health Equity.”

These measures are taking place against the backdrop of other non-COVID-19 specific Administration actions that could significantly affect the response, such as a continued push before the Supreme Court to overturn the Affordable Care Act (ACA), which has provided millions of Americans with insurance coverage and expanded access to health care.

On the global front, two of the emergency spending bills included funding for other countries, and the Administration had already begun sending international assistance to countries in need before the bills were passed. Following a more general foreign policy approach of “America First”, the Administration has chosen not to participate in several high-level international efforts to address COVID-19, has ended funding for the WHO, and has announced its intent to withdraw from WHO membership, actions that mark a significant departure from the role the U.S. has historically played, including its major role in combating the 2014 Ebola outbreak.

As part of his second term agenda, the President recently released the following goals for his proposal to “eradicate COVID-19”:

• “Develop a Vaccine by The End Of 2020.”
• “Return to Normal in 2021.”
• “Make All Critical Medicines and Supplies for Healthcare Workers in The United States.”
• “Refill Stockpiles and Prepare for Future Pandemics.”

Joe Biden

Former VP Biden has outlined a number of proposals for how he would address the coronavirus pandemic as President. VP Biden was also part of the Obama Administration’s response to the 2009 H1N1 outbreak, the 2014 Ebola outbreak, and 2016 Zika outbreak.  During his tenure, the Obama Administration played a lead role in creating the “Global Health Security Agenda,” a multilateral initiative that aims to serve as “a catalyst for progress toward the vision of attaining a world safe and secure from global health threats posed by infectious diseases.” In addition, as follow-up to the 2014 Ebola outbreak, the Obama Administration established the Directorate for Global Health Security and Biodefense at the National Security Council (NSC) to lead the federal government’s pandemic response (the Directorate was disbanded by the Trump Administration in 2018).

VP Biden has put forth the following principles for his proposed response to COVID-19:

• “Restoring trust, credibility, and common purpose”.
• “Mounting an effective national emergency response that saves lives, protects frontline workers, and minimizes the spread of COVID-19”.
• “Eliminating cost barriers for prevention of and care for COVID-19”.
• “Pursuing decisive economic measures to help hard-hit workers, families, and small businesses and to stabilize the American economy”.
• “Rallying the world to confront this crisis while laying the foundation for the future”.

VP Biden’s plan states that “The federal government must act swiftly and aggressively” and that “Public health emergencies require disciplined, trustworthy leadership grounded in science.” His approach calls for the federal government, not the states, to assume primary responsibility for many aspects of the COVID-19 response, including for scaling up testing and contact tracing, providing and managing the distribution of critical supplies, and setting strong national standards. For example, VP Biden has said he would call on all Americans to wear masks and work with governors and mayors to mandate mask wearing. He would appoint a “Supply Commander” to oversee national supply chain of essential equipment, medications, protective gear, directing distribution of critical equipment as cases peak at different times in different states or territories, and make more aggressive use of the DPA to direct companies to produce needed supplies. Additionally, in recognition of the disproportionate toll COVID-19 has taken on racial and ethnic minorities in the U.S.,  VP Biden would establish a “COVID-19 Racial and Ethnic Disparities Task Force”.

VP Biden has also called for adopting measures that go beyond what have been passed by Congress or supported by the Administration to further extend fiscal relief to individuals, schools, and businesses, provide enhanced insurance coverage, support states in providing COVID-19 related services, and eliminate cost-sharing for COVID-19 treatment. For example, VP Biden would reopen enrollment for marketplace plans and cover COBRA at 100% for those who lose their jobs and health insurance due to COVID-19. In addition, VP Biden would further expand paid leave for sick workers and those caring for family members, among others, due to COVID-19, and provide additional pay for frontline/essential workers. On vaccine pricing, he would authorize the federal government to approve the price of any COVID-19 vaccine developed with federal resources, in contrast to the Trump Administration, which has said it does not want to pursue price controls. On schools, a key difference between Biden and Trump is Biden’s emphasis on the need to get the virus under control before reopening in-person education. More broadly, VP Biden proposes to expand and protect the ACA.

On the global front, VP Biden would “re-embrace international engagement,” leadership, and cooperation. His platform states that “Even as we take urgent steps to minimize the spread of COVID-19 at home, we must also help lead the response to this crisis globally. In doing so, we will lay the groundwork for sustained global health security leadership into the future.” He would act to restore the Directorate for Global Health Security and Biodefense at the NSC and work to help create a Global Health Emergency Board to harmonize crisis response for vulnerable communities around the world. Finally, he would restore funding to and fully resource the WHO and reverse the Trump Administration’s decision to withdraw from WHO membership.

Sources

Unless otherwise noted, the following are the primary sources for this side-by-side:

President Trump:

• https://www.donaldjtrump.com/media/timeline-the-trump-administrations-decisive-actions-to-combat-the-coronavirus/
• https://www.whitehouse.gov/briefings-statements/president-trumps-historic-coronavirus-response/
• https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-is-taking-decisive-action-to-protect-vulnerable-citizens-in-americas-nursing-homes/

Vice President Biden:

• https://joebiden.com/covid19-leadership/#issue-0-4
• https://joebiden.com/covid19/:
• https://joebiden.com/reopening/
• https://joebiden.com/fact-sheet-how-joe-biden-would-help-you-get-health-insurance-coverage-during-the-coronavirus-crisis/
• https://medium.com/@JoeBiden/statement-by-vice-president-joe-biden-and-the-biden-for-president-public-health-advisory-committee-6407f37c93da
• https://www.nytimes.com/2020/04/12/opinion/joe-biden-coronavirus-reopen-america.html
• https://www.documentcloud.org/documents/6982369-Biden-Supply-Chain-Fact-Sheet-07-07-20.html

Federal Emergency Power

Travel Restrictions

Emergency Spending Bills

Coordinating a Federal Response

Federal Social Distancing and Reopening Guidelines

Reopening Schools

Scaling up COVID-19 Testing and Contact Tracing

Addressing the Costs of COVID-19 Testing, Prevention, Treatment and an Eventual Vaccine

Health Insurance Coverage During the Emergency Period

Helping Workers/Workplaces

Helping Hospitals/Health Care Facilities & Providers

Building the Strategic National Stockpile & Critical Supplies

Research & Development/ Treatment and Vaccine Distribution

International Cooperation and Global Health Security

Key Findings:

• The economy has now secured a spot as the top issue in the 2020 election with one-third of registered voters (32%) saying it will be the most important issue in deciding their vote for president, followed by the coronavirus outbreak (20%), criminal justice and policing (16%), and race relations (14%). There is a strong partisan divide, with Republican voters prioritizing the economy followed by criminal justice and policing, and Democratic voters prioritizing coronavirus followed by race relations. The share of voters who say health care will be the most important issue in deciding their vote has dropped 16 percentage points since February (from 26% to 10%), and outside of coronavirus, health care now ranks 5^th as an issue for voters (and ranks 3^rd for Democrats).
• In light of recent protests following the police shooting of Jacob Blake in Kenosha, Wisconsin and President Trump’s focus on violence in cities as a campaign issue, the share of voters who now say violence caused by protestors is a “big problem” in the U.S. has increased 15 percentage points since June (52% compared to 37%). The increase in the share who say violence caused by protesters is a big problem is particularly large among Republican and independent voters as well as among white voters (which is mostly driven by white Republicans rather than Democrats).
• Recently, the Centers for Disease Control and Prevention (CDC) issued a notice to states to start preparing to distribute a coronavirus vaccine by November 1^st, 2 days before the 2020 election. Most adults (81%), including majorities across partisans, do not think a vaccine for coronavirus will be widely available in the U.S. before the presidential election in November.
• Many (62%) are worried that the political pressure from the Trump administration will lead the FDA to rush to approve a coronavirus vaccine without making sure that it is safe and effective – including 85% of Democrats and 61% of independents. Fewer Republicans (35%) express this level of concern. About four in ten adults overall say both the FDA (39%) and the CDC (42%) are paying “too much attention” to politics when it comes to reviewing and approving treatments for coronavirus or issuing guidelines and recommendations.
• The latest KFF Health Tracking Poll finds a shift in the public’s attitudes on the coronavirus outbreak. More than six months into the pandemic, about four in ten (38%) now say “the worst is yet to come” (down nearly half from 74% in early April), while an equal 38% say “the worst is behind us” (up from 13% in April).
• Nearly half of adults hold at least one misconception about coronavirus prevention and treatment, including one in five who say wearing a face mask is harmful to your health and one in four who say hydroxychloroquine is an effective treatment for coronavirus. Three in four Republicans have at least one misconception, compared to 46% of independents and one in four Democrats. At the same time, trust in some official sources of information on coronavirus has declined since April, including a particularly steep drop in Republicans’ trust of Dr. Anthony Fauci and the CDC.

One-Third Of Voters Say Economy Is Most Important Issue For 2020 Election; Health Care Ranks Lower

With less than two months before the 2020 November election, one-third of registered voters (32%) say the economy is going to be the most important issue in deciding their vote for president. About one-fifth of voters say the coronavirus outbreak (20%) is the top issue, while about one in seven say criminal justice and policing (16%) or race relations (14%) are the top issues. Fewer voters choose health care (10%) or immigration (4%) as the most important issue in deciding their vote for president.

The economy is overwhelmingly the top issue for Republican voters with more than half (53%) choosing it as the most important issue in making their decision about who to vote for president, and it is also the top issue for independent voters (29%). Nearly four in ten Democratic voters (36%) say the coronavirus outbreak is the top issue in deciding their vote, followed by race relations (27%). Few Republican voters say the coronavirus outbreak (4%) or race relations (2%) is their top issue in the election.

The latest KFF Health Tracking Poll was conducted soon after the police shooting of Jacob Blake in Kenosha, Wisconsin (fielded August 28-September 3) and amidst the nation struggling with the health and economic effects of the coronavirus pandemic. Besides coronavirus, which ranks second as a voting issue, the issue of health care in general (which dominated the presidential campaign in early 2020), has fallen as a priority for voters and now ranks behind the economy, coronavirus, criminal justice and policing, and race relations. Democrats continue to prioritize the issue of health care more highly than independents or Republicans, ranking it third (tied with the economy, and ranking behind the coronavirus pandemic and race relations).

Swing voters

The economy is also now the top issue for swing voters, the crucial group of voters who say they are “probably” going to vote for either President Trump or former Vice President Biden but haven’t made up their minds yet or say they are still “undecided” about who they are going to vote for (24% of voters are “swing voters”).

About one-third (35%) of swing voters say the economy is their top issue, followed by criminal justice and policing (17%), the coronavirus outbreak (15%), and race relations (14%). About one in ten swing voters (11%) say health care is their top issue while few swing voters (2%) choose immigration is their top issue.

Recent events May Be shifting Voters’ priorities

The recent police shootings of unarmed black Americans and subsequent protests have resonated with voters with both criminal justice and policing and race relations ranking among the top election issues, depending on party identification. About one-fourth of Democratic voters (27%) say race relations is going to be the most important issue in deciding their vote for president while a similar share of Republicans (23%) say criminal justice and policing will be the top issue in to their vote.

In addition, large majorities of voters view racism, police violence, and violence caused by protestors as at least “somewhat of a problem” in the U.S. About six in ten (58%) say racism is a “big problem” while about four in ten say the same about police violence against the public (43%). Over the past three months, there has been a 15 percentage point increase in the share of voters who say violence caused by protestors is a “big problem,” 52% compared to 37% in June. This comes as national attention has focused on protests and acts of violence in cities like Kenosha, Wisconsin and Portland, Oregon, and as President Trump has made tamping down violence in cities a central issue in his campaign.

The partisan divisions in perceptions of these problems, especially views about the violence caused by protestors, have also shifted since June. While a large majority of Democratic voters and six in ten independent voters continue to say racism is “big problem” in the U.S. today, compared to 33% of Republican voters; now eight in ten Republican voters (81%) and half of independent voters (52%) say violence caused by protestors is “big problem,” compared to 62% of Republican voters and 35% of independent voters back in June. One-fourth of Democratic voters say this is a “big problem” – relatively unchanged since June (21%).

This shift is notable among all white voters with now similar shares of white voters saying that violence caused by protestors (56%) and racism (53%) are each a “big problem” in the U.S. today. The share of white voters who say violence caused by protestors is a “big problem” is up 17 percentage points since June, mostly driven by the views of white Republicans and independents and less of a change among white Democratic voters. About four in ten (37%) white voters say police violence against the public is a big problem.

Health Care As A Voting Issue

In the early months of 2020 and during the height of the Democratic primary contest, health care was consistently rated as one of the top issues for voters and was the top issue for Democratic primary voters in all of the seventeen Democratic contests analyzed by KFF researchers. But the latest KFF poll finds voters’ priorities have shifted during the last six months with the coronavirus outbreak, the closing of businesses due to the spread of the virus and subsequent recession, the police shootings of unarmed Black Americans, and violence occurring around protests. When asked what about health care is important to their vote, voters offer responses related to increasing access to health insurance coverage (18%) such as universal coverage, the cost of health care (15%) including issues around affordability and the cost of prescription drugs, the coronavirus outbreak (8%), and Medicare or senior concerns (7%).

A health care issue that no longer seems to be resonating with voters, especially Republican voters, is the 2010 Affordable Care Act (ACA). The latest KFF Health Tracking Poll finds 5% of Republican voters offering responses related to opposing or getting rid of the ACA as a top health care issue (compared to 29% of Republican voters who said the same prior to the 2016 presidential election).

A recent analysis of the Republican National Convention found only one mention of the ACA during the 2020 convention, compared to 13 mentions in 2016 and 23 mentions in 2012. The future of the ACA is still in question as the U.S. Supreme Court case will hear arguments for Texas v. California, the court case challenging the law’s constitutionality, one week following the November election.

Overall views towards the 2010 health reform law remain similar to July, with half of the public (49%) continuing to hold favorable views of the ACA while 42% view the law unfavorably (up slightly from 36%). The increase in the share with an unfavorable view was mostly driven by independents (41% now view it unfavorably compared to 35% in July) while a majority of Democrats continue to favor the law and most Republicans continue to hold unfavorable views with 79% saying they have an unfavorable opinion, showing that it is still unpopular among Republicans even if it is no longer a top issue in the 2020 election. KFF has been tracking views of the ACA since April 2010.

Half Of Voters Say Biden Has Better Approach On Most Health Care Issues

At least half of voters think former Vice President Biden has a better approach than President Trump to handle a variety of different health care issues including making decisions about women’s reproductive health choices and services (55%), determining the future of the ACA (54%), maintaining protections for people with pre-existing health conditions (52%), and ensuring access to health care and insurance (52%). On all of these health care issues, a larger share of voters say Biden has the better approach than say the same about President Trump. Voters are more divided on which candidate has the best approach lowering the cost of health care for individuals and protecting people from surprise medical bills with nearly half of voters saying they think Biden has the better approach compared to four in ten who say President Trump does.

When it comes to overseeing the development and distribution of a COVID-19 vaccine, voters are more closely divided with Biden having a slight, but not statistically significant, advantage. About half (49%) of voters say Biden has the better approach for the COVID-19 vaccine while 44% say President Trump does. Voters are also divided on who has the better approach to lowering prescription drug costs, an issue that President Trump has been focusing on throughout his presidency.

As expected, views on which candidate has the better approach largely fall down party lines with vast majorities of Democratic voters saying Biden has the better approach (93%) and nine in ten Republican voters (91%) saying President Trump has the better approach. Independent voters are equally divided with about four in ten saying each candidate has the better approach to the development and distribution of a vaccine.

Few Expect A Coronavirus Vaccine Before The November Election

On September 2^nd, the Centers for Disease Control and Prevention alerted states that they should be ready to distribute a coronavirus vaccine by November 1^st, two days before the 2020 election. The latest KFF Tracking Poll finds most adults (81%) – including majorities of Democrats (90%), independents (84%), and Republicans (75%) –  do not think a vaccine for coronavirus will be widely available in the U.S. before the presidential election in November. Moreover, if a coronavirus vaccine was indeed approved by the FDA before the election and was made available and free to everyone who wanted it, just four in ten adults (42%) say they would want to get vaccinated while a slight majority (54%) say they would not want to get vaccinated under those circumstances. Notably half of Democrats (50%) say they would get vaccinated if a vaccine were available before the election while majorities of independents (56%) and Republicans (60%) say they would not get the vaccine.

A majority of the public (62%) is worried that the political pressure from the Trump Administration will lead the FDA to rush to approve a coronavirus vaccine without making sure that it is safe and effective. A third of adults (33%) say they are “very worried” the FDA will rush to approve a vaccine while a further 29% say they are “somewhat worried.” Across partisans, 85% of Democrats and six in ten independents (61%) say they are worried the FDA will rush to approve a vaccine, while fewer Republicans (35%) express this level of concern. Notably, women are more likely than men to say they are worried the FDA will rush to approve a vaccine (70% vs. 55%).

Public’s Views On Coronavirus Outbreak May Be Shifting

More than six months into a pandemic that has killed more than 180,000 Americans, the public is divided on whether the worst is behind us or yet to come. This comes on the heels of a Republican National Convention in which President Trump was lauded for his handling of COVID-19 and with conflicting information about the availability of a vaccine this fall. About four in ten (38% each) say “the worst is behind us” or “the worst is yet to come.” The share of adults who think the worst is yet to come has decreased by 22 percentage points since July.

Across partisans, a majority of Republicans (56%) say the worst of the coronavirus outbreak is behind us (up from 31% in July). While a majority of Democrats (58%) say the worst is yet to come, the share who expect the worst still lays ahead has decreased by 21 percentage points since July.

In addition, President Trump is now receiving slightly better marks on his handling of the coronavirus, with the share of the public who approve of his handling of the outbreak in the U.S. up 9 percentage points since July 2020. A slight majority (55%) still disapprove of his handling of the current coronavirus outbreak (down from 62% in July).

The Public Is Divided In Who They Trust For Coronavirus Information, Some Misconceptions Exist

CDC and Fauci Are Most Trusted Information Sources, But Trust In Both Has Become Increasingly Partisan

About two in three adults say they have at least a fair amount of trust in Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases (68%), and in the U.S. Centers for Disease Control and Prevention (CDC) (67%) to provide reliable information on coronavirus. About half say they trust Dr. Deborah Birx, the Coronavirus Response Coordinator for the White House Coronavirus Task Force (53%) as a reliable source of information. Half of the public say they trust Joe Biden to provide reliable information on coronavirus while about four in ten say the same about President Trump (52% vs. 40%).

While majorities across partisans continue to trust the CDC, there are large partisan differences on trust in other sources, with Democrats more likely to trust Joe Biden and Dr. Anthony Fauci, and Republicans more likely to trust President Trump and Dr. Deborah Birx.

Notably, the share of adults who trust the CDC to provide reliable information has decreased by 16 percentage points since April. Similarly, the share of adults who say they trust Dr. Anthony Fauci has declined by 10 percentage points since April. Trust in the CDC has decreased from April across partisans, though the decrease has been among Republicans in particularly steep, with 60% now saying they trust the CDC, down 30 percentage points from April when 90% said they trusted the CDC to provide reliable information. Likewise, there has been a steep decline in trust of Dr. Anthony Fauci among Republicans. While the share of Democrats who say they trust Dr. Fauci has increased slightly since April (86%, up from 80%), among Republicans, the share who trust Dr. Fauci has decreased by 29 percentage points (48%, down from 77%).

Public mostly knows key facts about coronavirus, though some MISCONCEPTIONS remain

A large majority of the public (87%) is aware that there is no FDA-approved vaccine to prevent coronavirus and that it is possible for children under 18 to transmit coronavirus to other people (88%). Similarly, eight in ten (80%) know that there is no cure for coronavirus and that wearing a face mask helps to limit the spread of coronavirus (81%). Three in four adults (77%) know that wearing a face mask is not harmful to your health, though notably, one in five adults say wearing a face mask is harmful. While 55% of adults say hydroxychloroquine is not an effective treatment for COVID-19, one in four (24%) say it is an effective treatment. Nearly half of adults (48%) hold at least one misconception about coronavirus prevention and treatment, giving an incorrect answer to at least one of these questions.

There are some notable partisan differences on some key coronavirus facts. While majorities across partisans say wearing a facemask is not harmful to your health, Republicans (36%) are more likely than Democrats (7%) and independents (17%) to say wearing a face mask is harmful. Similarly, while majorities across partisans say wearing a face mask helps to limit the spread of coronavirus, Republicans (32%) are more likely than Democrats (3%) and independents (17%) to say masks do not help to limit the spread. Perhaps reflecting the difference among partisans in who they trust for reliable information, the largest partisan gap is on hydroxychloroquine, which President Trump has touted as a treatment for coronavirus. Most Democrats (78%) and independents (57%) say it is not an effective treatment for COVID-19. However, half of Republicans (51%) say it is an effective treatment.

In August, the U.S. Food and Drug Administration (FDA) issued an emergency use authorization for convalescent plasma in the treatment of COVID-19. In a press conference with President Trump, FDA commissioner Stephen Hahn misstated the benefits of convalescent plasma and has since clarified his remarks. A slight majority of the public (55%) has heard about convalescent plasma receiving emergency authorization from the FDA. Among those who have heard about this new treatment for COVID-19, about three in four (74%) say more studies are needed to determine how effective it is. Majorities across partisans say more studies are needed to determine the effectiveness of convalescent plasma for treating people who are sick from coronavirus.

Commissioner Hahn’s misstatement in his press conference with President Trump and his subsequent clarification has highlighted the issue of potential political pressure impacting the work of organizations such as the FDA and the CDC. The public is divided on whether the FDA pays enough attention to science when approving treatments for coronavirus with 43% saying it pays about the right amount of attention to science while 46% say it does not pay enough attention. The public is similarly divided on whether the CDC pays enough attention to science when issuing guidelines and recommendations related to coronavirus with 43% saying it pays about the right amount of attention and 46% saying it does not pay enough attention to science.

However, when asked about the amount of attention these two organizations pay to politics, pluralities say they pay too much attention. About four in ten (39%) say the FDA pays too much attention to politics when reviewing and approving treatments for coronavirus, while a similar share say the CDC pays too much attention to politics when issuing guidelines and recommendations related to coronavirus.

Majorities of Democrats say that under the Trump Administration, the FDA and the CDC pay too much attention to politics. About four in ten independents say these organizations pay too much attention to politics. Among Republicans, about one in five (19%) say that under the Trump Administration, the FDA pays too much attention to politics when approving treatments for coronavirus while about a third (35%) say the CDC pays too much attention to politics when issuing guidelines and recommendations related to coronavirus.

These additional findings were released October 1.

In previous KFF surveys, large shares of public have reported putting off or postponing different types of care due to cost. Since the outbreak of the coronavirus pandemic in the U.S., many hospitals and medical offices have had to close for periods of time, limited capacity, and many elective procedures have been postponed. Moreover, with adults across the nation urged to social distance, the coronavirus pandemic and its related safety concerns have kept many adults from seeking medical and dental care. The September KFF Health Tracking Poll asks people whether they have put off medical care for any reason in the past six months, and then drills down to find out the reasons why people may have skipped or postponed care, the type of care that was skipped, and whether they anticipate getting the delayed care in the coming months. Compared to June, fewer people now report skipping care due coronavirus-related office closures and safety concerns, suggesting that as medical offices have reopened, some people are now getting care they postponed earlier this year. However, the ongoing outbreak – along with concerns over the cost and affordability of care – continue to keep some adults from seeking the medical and dental care they may need.

Four In Ten Adults Say Someone In Their Household Skipped Or Postponed Care

As the country continues to deal with the ongoing coronavirus pandemic and its public health and economic impacts, four in ten adults (42%) say that they or a family member living in their household skipped or postponed some type of medical or dental care in the past six months (including 18% who say they personally skipped or postponed care, 7% who say it was only a family member, and 17% who say both they and a family member).

When asked what type of care they or a family member skipped or postponed, 13% say it was dental care only, 8% say it was only medical care, and one in five (21%) say they or family member skipped both dental and medical care. Notably, about one-third of those who say they or a family member skipped or postponed care (14% of all adults) report a worsening condition as a result.

People report different reasons for skipping or postponing care. Most commonly, 28% say they or a family member skipped or postponed care because the medical facility was closed or offering limited appointments, followed by 21% who say it was because they felt unsafe visiting a medical facility during the coronavirus outbreak. Amidst a coronavirus related economic recession and with unemployment currently at 8.4 percent, 17% of adults say they or a family member skipped or delayed care because they couldn’t afford it or were concerned about the cost. Previous KFF research indicates that this may be an underestimation of the true share of adults who are delaying care or relying on over-the-counter or home remedies to treat conditions instead of seeking care.

Fewer Say They Have Skipped Care Due To Coronavirus-related Closures or fears

While the coronavirus pandemic continues to have an impact on people seeking medical and dental care, survey trends indicate that as many medical facilities re-open with safety precautions in place, fewer people are now skipping care for coronavirus-related reasons compared to earlier this summer. The share of adults who say they or a family member skipped or postponed care due to office closures has decreased by 15 percentage points since June (28%, down from 43%). Similarly, the share who say they or a family member skipped or postponed medical or dental care because they felt unsafe seeking care during the coronavirus outbreak is also down from June (21%, down from 27%).

Groups that tend to go to the doctor more routinely are also the groups that have higher shares saying they put off care for coronavirus-related reasons. Women are more likely than men to put off care either because of office closures or because they felt unsafe going to an appointment during the pandemic, and the same is true for people living in households with chronic medical conditions and those with health insurance, compared to those without. On the other hand, younger adults, who typically go to the doctor less often, report lower levels of putting off care for coronavirus-related reasons.

Cost Concerns Keep About One In Five Women, Younger Adults, from Getting Medical or Dental Care

While coronavirus-related medical office closures and fear about the safety of visiting medical office is contributing to number of people delaying getting care, cost also continues to be a factor, and affects a different segment of the population than those skipping care for coronavirus-related reasons. Overall, 17% of adults say the inability to afford the care or concern about the cost was a reason they skipped or postponed getting medical or dental care in the last six months. Notably, adults under age 65 and those with lower household incomes are more likely than their counterparts to say they or a family member have delayed getting care due to cost concerns. Women are more likely than men to say they or family member have skipped or postponed care due to cost.

Though coronavirus and cost concerns are contributing to some delays in people getting the medical or dental care they need, most of those who say they or a family member skipped or postponed care say they expect to get the care within the next year. Indeed, 10% say they or a family member have already gotten the care that was postponed while nearly half (46%) say they expect to get the care within the next 3 months. Just 6% of those who said they or someone in their household delayed getting medical or dental care say they do not expect to get the care that was skipped or postponed.

This KFF Health Tracking Poll was designed and analyzed by public opinion researchers at the Kaiser Family Foundation (KFF). The survey was conducted August 28-September 3, 2020, among a nationally representative random digit dial telephone sample of 1,199 adults ages 18 and older, living in the United States, including Alaska and Hawaii (note: persons without a telephone could not be included in the random selection process). The sample included 290 respondents reached by calling back respondents that had previously completed an interview on the KFF Tracking poll at least nine months ago. Computer-assisted telephone interviews conducted by landline (295) and cell phone (904, including 652 who had no landline telephone) were carried out in English and Spanish by SSRS of Glen Mills, PA. To efficiently obtain a sample of lower-income and non-White respondents, the sample also included an oversample of prepaid (pay-as-you-go) telephone numbers (25% of the cell phone sample consisted of prepaid numbers) as well as a subsample of respondents who had previously completed Spanish language interviews on the SSRS Omnibus poll (n=6). Both the random digit dial landline and cell phone samples were provided by Marketing Systems Group (MSG). For the landline sample, respondents were selected by asking for the youngest adult male or female currently at home based on a random rotation. If no one of that gender was available, interviewers asked to speak with the youngest adult of the opposite gender. For the cell phone sample, interviews were conducted with the adult who answered the phone. KFF paid for all costs associated with the survey.

The combined landline and cell phone sample was weighted to balance the sample demographics to match estimates for the national population using data from the Census Bureau’s March 2019 Supplement of the U.S. Census Population Survey (CPS) on sex, age, education, race, Hispanic origin, and region along with data from the 2010 Census on population density. The sample was also weighted to match current patterns of telephone use using data from the January- June 2019 National Health Interview Survey. The weight takes into account the fact that respondents with both a landline and cell phone have a higher probability of selection in the combined sample and also adjusts for the household size for the landline sample, and design modifications, namely, the oversampling of prepaid cell phones and likelihood of non-response for the re-contacted sample. All statistical tests of significance account for the effect of weighting.

The margin of sampling error including the design effect for the full sample is plus or minus 3 percentage points. Numbers of respondents and margins of sampling error for key subgroups are shown in the table below. For results based on other subgroups, the margin of sampling error may be higher. Sample sizes and margins of sampling error for other subgroups are available by request. Note that sampling error is only one of many potential sources of error in this or any other public opinion poll. Kaiser Family Foundation public opinion and survey research is a charter member of the Transparency Initiative of the American Association for Public Opinion Research.

Key Takeaways

With 69% of Medicaid beneficiaries enrolled in comprehensive managed care plans, plans play a critical role in responding to the COVID-19 pandemic and in the fiscal implications for states. Given unanticipated costs related to COVID-19 testing and treatment, as well as depressed utilization affecting the financial stability of many Medicaid providers, states are currently evaluating options to adjust current managed care organization (MCO) payment rates and/or risk sharing mechanisms as well as evaluating options and flexibilities under existing managed care rules to direct payments to Medicaid providers (Figure 1). This brief provides an overview of how MCO capitation rates are developed by states and approved by CMS, highlights options available to states to adjust current MCO payment rates and/or risk sharing mechanisms, describes how MCOs pay providers, and outlines state options to direct MCO payments to providers in response to conditions created by the pandemic. Key takeaways are discussed below.

Under federal law, payments to Medicaid managed care organizations (MCOs) must be actuarially sound. Actuarial soundness means that “the capitation rates are projected to provide for all reasonable, appropriate, and attainable costs that are required under the terms of the contract and for the operation of the managed care plan for the time period and the population covered under the terms of the contract.” Unlike fee-for-service (FFS), capitation provides upfront fixed payments to plans for expected utilization of covered services, administrative costs, and profit.

Under existing Medicaid managed care authority, states have several options to address payment issues that have arisen as a direct result of the COVID-19 pandemic. CMS has outlined state options to modify managed care contracts and rates in response to COVID-19 including risk mitigation strategies, adjusting capitation rates, covering COVID-19 costs on a non-risk basis, and carving out costs related to COVID-19 from MCO contracts. These options vary widely in terms of implementation/operational complexity, and all options will require CMS approval.

States can direct that managed care plans make payments to their network providers using methodologies approved by CMS to further state goals and priorities, including COVID-19 response. This strategy can address the scenario in which states are making capitation payments to plans, but providers are not receiving reimbursement from plans due to decreased service utilization while non-urgent services are suspended or patients are hesitant to seek care. For example, states could require plans to adopt a uniform temporary increase in per-service provider payment amounts for services covered under the managed care contract, or states could combine different state directed payments to temporarily increase provider payments.

Key considerations in evaluating payment options include: mitigating MCO and state risk, MCO and provider cash flow, beneficiary access and continuity of care, and administrative burden. States may consider how payment policy options impact both MCO and state financial risk, as capitation rates do not include costs associated with COVID-19 but the pandemic has also led to decreased utilization of services. States may also consider MCO cash flow issues that may arise due to unanticipated costs associated with COVID-19 as well as provider cash flow issues as a result of depressed utilization. It will also be important to consider the impact of payment options on beneficiary access and continuity of care (i.e., will beneficiaries be able to maintain relationships with existing providers). Finally, all options require CMS review and approval but options may vary widely in terms of implementation/operational complexity.

Introduction

Today, capitated managed care is the dominant way in which states deliver services to Medicaid enrollees. States pay Medicaid managed care organizations (MCOs) a set per member per month payment for the Medicaid services specified in their contracts. Current MCO capitation rates were developed and implemented prior to the onset of the COVID-19 pandemic. Consequently, these rates do not include costs for COVID-19 testing and treatment. At the same time, utilization of non-urgent care is decreasing as individuals seek to limit risks/exposure to contracting the coronavirus. As a result, many states are currently evaluating options for making adjustments to existing MCO rates and risk sharing mechanisms in response to unanticipated COVID-19 costs and conditions that have led to decreased utilization. However, there is still a lot of uncertainty about the impact of the pandemic on managed care financing/rates, particularly in current plan rating periods (which typically run on a calendar year or state fiscal year basis), as it’s still too early to know if there is pent up demand that may drive utilization upward as the pandemic abates as well as unknowns about where/when COVID-19 cases and related costs will spike as the pandemic continues.

Additionally, many Medicaid providers may be under fiscal strain, facing substantial losses in revenue.¹  For providers in states that rely heavily on managed care, states are making payments to plans but those funds may not be flowing to providers where utilization has decreased. In contrast, many health insurance companies are reporting record earnings during the pandemic.²  As a result, states are also evaluating options and flexibilities under existing managed care rules to direct/bolster payments to Medicaid providers.

This brief provides an overview of how MCO capitation rates are developed by states and approved by CMS, highlights options available to states to adjust current MCO payment rates and/or risk sharing mechanisms, describes how MCOs pay providers, and outlines state options to direct MCO payments to providers in response to conditions created by the pandemic.

Background

As of July 2019, 40 states, including DC, contract with comprehensive, risk-based managed care plans to provide care to at least some of their Medicaid beneficiaries. Medicaid managed care organizations (MCOs) provide comprehensive acute care (i.e., most physician and hospital services) and in some cases long-term services and supports to Medicaid beneficiaries. MCOs accept a set per member per month payment for these services and are at financial risk for the Medicaid services specified in their contracts.

As of July 2018, almost 54 million Medicaid enrollees received their care through risk-based MCOs – or over two thirds (69%) of all Medicaid beneficiaries. Twenty-five MCO states covered more than 75% of Medicaid beneficiaries in MCOs. In FY 2018, state and federal spending on Medicaid services totaled nearly $593 billion. Payments made to MCOs accounted for about 45% of total Medicaid spending. State-to-state variation in MCO spending reflects many factors, including the proportion of the state Medicaid population enrolled in MCOs, the health profile of the Medicaid population, whether high-risk/high cost beneficiaries (e.g., persons with disabilities, dual eligible beneficiaries) are included in or excluded from MCO enrollment, and whether or not long-term services and supports are included in MCO contracts. Six firms – UnitedHealth Group, Centene, Anthem, Molina, Aetna, and Wellcare – accounted for over 47% of all Medicaid MCO enrollment in July 2018.

How do states set payment rates for MCOs?

Under federal law, payments to Medicaid managed care organizations (MCOs) must be actuarially sound.³  Actuarial soundness means that “the capitation rates are projected to provide for all reasonable, appropriate, and attainable costs that are required under the terms of the contract and for the operation of the managed care plan for the time period and the population covered under the terms of the contract.” The 2016 final rule on Medicaid managed care significantly strengthened the standards that states must meet in developing actuarially sound capitation rates and that CMS will apply in its review and approval of rates. Payments made to Medicaid managed care plans vary depending on the scope of services and populations covered by the plan. Unlike fee-for-service, capitation provides upfront fixed payments to plans for expected utilization of covered services, administrative costs, and profit.

In developing actuarially sound rates, states must follow accepted actuarial methods and specific federal requirements outlined in regulations and other guidance. Plan rates, usually for a 12-month rating period, are set using baseline utilization and cost data based on historical FFS claims, health plan services and utilization data (i.e., encounter data), and/or health plan financial data for the populations enrolled. Baseline spending data is trended forward to determine per member per month payment amounts and must take into account/adjust for factors such as medical cost inflation, expected changes in utilization, and state Medicaid program changes (e.g., changes to eligibility, benefits, cost-sharing, FFS payment rate changes (if state bases managed care rates on FFS rates)). Different rates are set for population subgroups (referred to as “rate cells”) taking into account eligibility category, age, gender, location, among other factors. Rates also include expected non-benefit costs including administration, taxes, licensing and regulatory fees, contribution to reserves, risk margin, and cost of capital.^4 ,5 ,6 

States may use a variety of other mechanisms to adjust plan risk (including catastrophic claims), incentivize plan performance, and ensure payments are not too high or too low, including:

• Risk & Acuity Adjustments – Rates can be risk adjusted to account for the health status (or other demographic factors) of enrollees which may reduce the incentive for plans to avoid sicker members. Acuity adjustments are applied to total payments across all managed care plans to account for significant uncertainty about the health status or risk of a population.
• Risk Sharing Arrangements– Rates may take into consideration the use of plan risk sharing mechanisms including risk corridors, stop-loss, or reinsurance. Under risk corridor arrangements, states and plans agree to share profit or losses (at percentages specified in plan contracts) if aggregate spending falls above or below specified thresholds (two-sided risk corridor). Stop-loss and reinsurance arrangements protect plans from losses beyond a specified threshold.
• Medical Loss Ratio (MLR) – The MLR reflects the proportion of total capitation payments received by an MCO spent on clinical services and quality improvement (where the remainder goes to administrative costs and profit). CMS published a final rule in 2016 that requires states to develop capitation rates for Medicaid to achieve an MLR of at least 85% in the rate year. Contracts must include a requirement for plans to calculate and report an MLR. There is no federal requirement for Medicaid plans to pay remittances to the state if they fail to meet the MLR standard but states have discretion to require remittances – 24 states reported that they “always” require MCOs to pay remittances while six states indicated they “sometimes” require MCOs to pay remittances, as of July 1, 2019.⁷ 
• Incentive & Withhold Arrangements – States may factor payment mechanisms like incentive and withhold arrangements into rate development. Using incentive arrangements, states may make payments over and above capitation rates to plans for meeting specified performance targets. Under withhold arrangements, states may hold back a portion of capitation rates to be paid if/when plans meet specified performance targets (e.g., quality performance measures or quality-based outcomes).

After CMS approval, states may increase or decrease rates by 1.5% (per rate cell) without requiring new approval. CMS must review and approve capitation rates including supporting data and documentation for a 12-month rating period. States must update capitation rates and seek approval from CMS each year before new rates become effective. States must obtain federal approval for adjustments that exceed 1.5%.

What guidance has CMS provided to states to address MCO payment issues in response to COVID-19?

Under existing Medicaid managed care authority, states have several options to address payment issues that have arisen as a direct result of the COVID-19 pandemic. CMS has acknowledged that costs associated with the COVID-19 pandemic could not have been reasonably prospectively included in the development of current MCO rates. CMS has also noted that the COVID-19 public health emergency is causing major shifts in utilization across the healthcare industry, causing uncertainty for health care providers. In response, CMS has outlined state options to modify current managed care contracts and rates in response to COVID-19.⁸  CMS discussed several options available to states and outlined key considerations in evaluating these options including: mitigating MCO and state risk, MCO cash flow, beneficiary continuity of care, and administrative burden (for states, the federal government, and MCOs). The following options described below will all require CMS approval. States will need to submit MCO contract amendments and in most instances revised actuarial certifications. (Also see box below for specific examples discussed on CMS stakeholder call related to options for covering COVID-19 tests.)

States can implement two-sided risk corridors. Most states have experience with risk corridors. Risk corridors can mitigate MCO risk without impacting enrollee continuity of care, as beneficiaries would be able to continue to see existing providers in their plan network. CMS advises states should implement risk corridors for all medical costs, not just COVID costs, noting it is simpler to implement for all medical costs and doing so accounts for risks related to non-COVID costs changes. Risk corridors provide financial protection to MCOs and limits on financial risk to states but would not address immediate MCO cash flow issues, as they would be reconciled and paid out at the end of the contract period. In its May 2020 guidance, CMS notes states could implement two-sided risk corridor based on a target MLR – where a plan and the state would be required to share in gains or losses if the plan did not meet the target MLR within a specified margin. CMS will consider state requests to retroactively amend or implement (for current rating periods) risk mitigation strategies (e.g., risk corridors) only for the purpose of responding to the COVID-19 pandemic.^9 ,10 

States can adjust capitation rates. Risk corridors can be combined with a capitation rate adjustment to address MCO cash flow risks. Many states are implementing temporary increases in Medicaid FFS provider payment rates as part of disaster State Plan Amendments (SPAs). Some states have CMS approved state directed payments which contractually require managed care plans to adopt Medicaid FFS provider rates for specific provider types or services. States can make rate adjustments in response to COVID-19 that result in an increase or decrease to the capitation rate per rate cell of less than 1.5% with a contract amendment (but do not need a revised actuarial certification). For adjustments of more than 1.5% per rate cell, states must submit a revised actuarial rate certification and contract amendment to CMS. States can submit prospective or retrospective rate amendments (for the current rating period) associated with COVID-19 (or adjust for non-COVID-19 costs) but CMS has noted that a significant amount of uncertainty still exists around the spread of the pandemic and costs associated with treatment, which would make it very difficult to develop assumptions or assess the reasonableness of final rates/rate adjustments.

States can incorporate supplemental kick payments. Kick payments are one-time fixed, supplemental payments made to plans, allowing them to cover certain services (e.g., maternity care) without assuming financial risk for their use. States could use kick payments to cover COVID-related costs, which would require a contract amendment and rate certification.

States can cover COVID-19 costs on a non-risk basis. This could include all COVID-19 related service costs or all service costs for beneficiaries with a COVID-19 diagnosis. States would then reimburse MCOs for these costs net of capitation payments paid. CMS noted that this option could also be combined with a risk corridor to reduce the risk that remaining costs are significantly lower than originally projected. Covering costs on a non-risk basis would eliminate MCO risk, reduce MCO cash flow problems, and ensure continuity of care for beneficiaries. However, the success of the non-risk model would depend on accurately identifying relevant costs/enrollees.

States can carve-out costs related to COVID-19 and cover them on a FFS basis. States could either carve out all COVID-19 related service costs or all service costs for beneficiaries with a COVID-19 diagnosis. Again, CMS would recommend implementing with a risk corridor. A COVID-19 carve-out would be administratively burdensome and would disrupt beneficiary continuity of care, especially in states that heavily use managed care that don’t have much of a FFS provider network to utilize. This model would also depend on accurately identifying all COVID-19 costs and/or beneficiaries.

States may also consider adjusting their managed care contract quality measurement requirements. States may need to revisit contract provisions that have been affected by pandemic in ways that were not anticipated. CMS has indicated that the COVID-19 pandemic is likely to affect clinical practices and timely reporting of quality data. States may need to reexamine arrangements tied to performance metrics/reporting requirements such as withhold and incentive arrangements, state-directed payments, as well as other contract requirements and penalties. Depending on the nature of the changes, rate certification amendments may or may not be needed; however, states will need to submit contract amendments to reflect any revisions to these provisions.

How do MCOs pay providers?

States generally pay the plans a capitation payment, but then plans determine how to pay the providers in their network.¹²  Plans generally have wide latitude to determine how to pay their contracted providers. Medicaid MCOs may pay the providers in their networks on a FFS basis, capitation basis, or on other terms. Although plans may use alternative provider payment models (e.g., capitation, bundled payments etc.) for some providers, MCOs still widely use FFS reimbursements to pay providers.

Under current MCO rules, states are prohibited from directing how a managed care plan pays its providers except for certain payment methodologies that have been approved and reviewed by CMS. States may require MCOs to adopt minimum or maximum provider payment fee schedules or provide uniform dollar or percentage increases for network providers that provide a particular service under the contract, as approved by CMS. States also can seek CMS approval to require MCOs to implement value-based purchasing models for provider reimbursement (e.g., pay for performance, bundled payments) or participate in multi-payer or Medicaid-specific delivery system reform or performance improvement initiatives. State directed payments must be based on utilization and delivery of services covered under the managed care plan contract and must be reflected in capitation rate development and certification.¹³ 

What guidance has CMS issued related to state options to direct MCO provider payments in response to conditions created by the COVID-19 pandemic?

States can direct that managed care plans make payments to their network providers using methodologies approved by CMS to further state goals and priorities, including COVID-19 response. This strategy can address the scenario in which states are making capitation payments to plans, but providers are not receiving reimbursement from plans due to decreased service utilization while social distancing measures are in place and non-urgent services are suspended. For example, states could require plans to adopt a uniform temporary increase in per-service provider payment amounts for services covered under the managed care contract, or states could combine different state directed payments to temporarily increase provider payments, according to recent CMS guidance. Specific examples from the CMS guidance are outlined in the box below. CMS will allow states to develop and implement these specific state directed payments retrospectively to the start of the current contract rating period.

CMS explains that state directed increased payments for actual utilization of services can preserve the availability of covered services for enrollees during a time when providers may be experiencing dramatic utilization declines or incurring additional costs due to the public health emergency. The guidance also says that states may use directed payments to address increased use of telehealth or other approaches to maintain access to care for all enrollees or specific subgroups with specialized needs during the emergency. States must direct payments to a class of providers, such as dental, behavioral health, home health and personal care, pediatric, federally-qualified health centers, or safety-net hospitals, to support providers that may serve a high proportion of Medicaid enrollees and may be disproportionately affected by the public health emergency. Directed payments must be appropriate and reasonable compared to the total payments the provider would have received in the absence of the public health emergency.¹⁵  For states that have approved directed payment proposals, CMS guidance says that states wishing to make changes to such arrangements in light of COVID-19 can submit an amended directed payment preprint and/or contract and rate certification amendments to CMS.

To the extent that home and community-based services (HCBS) are included in MCO contracts, states may contractually require MCOs to make retainer payments to allow certain HCBS providers to continue to bill for individuals enrolled in Medicaid even if HCBS services (e.g., habilitation and personal care) cannot be provided during a public health emergency. The retainer payments must be authorized as part of the Section 1915(c) HCBS waiver, Section 1115 demonstration waiver, or other Medicaid authority. To effectuate these payments, states must submit a directed payment preprint to CMS for approval.

Looking Ahead: What to Watch

With 69% of beneficiaries enrolled in comprehensive Medicaid managed care plans, plans play a critical role in responding to the COVID-19 pandemic. Given unanticipated costs related to COVID-19 testing and treatment as well as depressed utilization affecting the financial stability of many Medicaid providers, states are currently evaluating options to adjust current MCO payment rates and/or risk sharing mechanisms as well as evaluating options and flexibilities under existing managed care rules to direct MCO payments to Medicaid providers. Key considerations in evaluating these options include:

• Does the policy mitigate risks to MCO and states? Some MCO payment options like rate adjustments, kick-payments, or covering costs on a non-risk basis may mitigate risks to MCOs. Other options like rate adjustments and the use of two-sided risk corridors may mitigate both risks to MCOs and states. However, states may need to consider where they are in their rate cycle, as money may not be returned to states, or additional funding provided to MCOs, until after the end of the rating period (when options like risk corridors or retrospective rate adjustments are used). Going into the next contract period, states will face continued challenges in setting rates as uncertainty about new costs and utilization will remain. Additionally, will CMS revisit some proposals in its Proposed Medicaid Managed Care Rule like the current provision which would prohibit states from retroactively adding or modifying risk sharing mechanisms after the start of the rating period?
• Does the option address MCO or provider cash flow issues? States may consider the fiscal stability/viability of both MCOs and providers and the timing of when additional funding might be paid out. Some policy options, like HCBS retainer payments, are limited to a 90-day cap per individual. States and providers may need to consider alternative options when this period ends.
• Does the policy enhance enrollee access or continuity of care for enrollees? States may consider the impact of payment policy options on beneficiary continuity of care, as some options – like carving out services to FFS systems – may disrupt established beneficiary-provider relationships. States considering directed payments could consider how policy options may enhance access to care for enrollees (including access to telehealth services).
• How feasible are the options given uncertainty about COVID-19 costs and the spread of the pandemic? And, how administratively burdensome are the options for states, the federal government, and plans? Both retroactive and prospective rate adjustments may be extraordinarily difficult to develop and implement because of significant uncertainty related to COVID-19 costs and utilization. States may consider what is required for approval – contract amendments, actuarial rate certification amendments, and/or state directed payment pre-prints and whether options under consideration may meet criteria for expedited review at CMS as well as the implementation/operationalization complexity and how quickly they may be able to get new monies out to plans and providers.

Looking to the future, the duration of the temporary increase in the federal Medicaid match rate as well as overall state fiscal conditions will also be factors states must consider when evaluating policy options in response to the COVID-19 pandemic. Reduced state revenues and projected state budget shortfalls will likely put pressure on state Medicaid programs and states’ ability to pay for any policies that increase state costs, particularly without additional federal support or certainty about the duration of the current enhanced federal funding. States will want to carefully review options to mitigate risks related to overpayments to MCOs in a time of heightened uncertainty and state fiscal constraints. Due to significant challenges around revising rates for current contract periods (either retrospectively or prospectively), CMS is likely to encourage states to include two-sided risk corridors as part of state strategies to guard against overpayment.

1. The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program and Health Care Enhancement Act provide $175 billion in provider relief funds to reimburse eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus. HHS has allocated $15 billion to Medicaid providers however, there have been some delays and challenges in applying for these funds and the allocation may not be sufficient to remedy the fiscal issues faced by some providers. ↩︎
2. Abelson, Reed. “Major U.S. Health Insurers Report Big Profits, Benefiting from the Pandemic.” The New York Times. Aug. 5, 2020. https://www.nytimes.com/2020/08/05/health/covid-insurance-profits.html (accessed Aug. 12, 2020). ↩︎
3. These requirements apply to comprehensive risk-based plans as well as limited-benefit plans (e.g., those providing only dental or behavioral health services). ↩︎
4. MACPAC, Setting Per Capita Caps: Significant differences between current methods and those anticipated under financing reforms, March 2017, https://www.macpac.gov/wp-content/uploads/2017/03/Setting-Per-Capita-Caps.pdf. ↩︎
5. MACPAC, Payment Policy in Medicaid Managed Care, June 2011, https://www.macpac.gov/wp-content/uploads/2011/06/Payment-Policy-in-Medicaid-Managed-Care.pdf. ↩︎
6. Centers for Medicare & Medicaid Services (CMS), “2020-2021 Medicaid Managed Care Rate Development Guide For Rating Periods Starting between July 1, 2020 and June 30, 20211,” July 2020, https://www.medicaid.gov/medicaid/managed-care/downloads/2020-2021-medicaid-rate-guide.pdf. ↩︎
7. Kathleen Gifford, et al., A View from the States: Key Medicaid Policy Changes: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2019 and 2020 (Washington, DC, Kaiser Family Foundation (KFF), Oct. 2019), https://modern.kff.org/medicaid/report/a-view-from-the-states-key-medicaid-policy-changes-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2019-and-2020/. ↩︎
8. CMS Coronavirus COVID-19 Stakeholder Calls. Friday, April 10, 2020 CMS Medicaid and CHIP All State Call, https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/PodcastAndTranscripts. ↩︎
9. Although the proposed rule at CMS would prohibit states from implementing retroactive risk mitigation strategies, given the unique and unanticipated circumstances presented by the COVID-19 pandemic CMS will consider state requests to retroactively amend or implement risk mitigation strategies (e.g., risk corridors) only for the purpose of responding to the COVID-19 pandemic ↩︎
10. CMS, COVID-19 Frequently Asked Questions (FAQs) for State Medicaid and Children’s Health Insurance Program (CHIP) Agencies (last updated June 30, 2020), https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf (pgs. 83-84 V.C.6). ↩︎
11. CMS Coronavirus COVID-19 Stakeholder Calls. Friday, March 27, 2020, CMS Medicaid & CHIP All State Call, https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/PodcastAndTranscripts. ↩︎
12. Some plans may include certain services in their contract with the state (e.g., pharmacy, NEMT, dental) but may subcontract these services to other entities. ↩︎
13. The proposed MCO rule pending at CMS would make some changes to minimum fee schedule arrangements for directed payments. ↩︎
14. CMCS Informational Bulletin, May 14, 2020, “Medicaid Managed Care Options in Responding to COVID-19,” https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/cib051420.pdf. ↩︎
15. CMS will require the implementation of a two-sided risk corridor when states implement state-directed payments intended to mitigate impact of the public health emergency. ↩︎