Biden’s Medicaid Director Reflects on Lessons Learned and Worries for the Future

Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode above!

Dan Gorenstein (DG): It’s unknown what changes the incoming Trump administration and Republican-led Congress will make to the U.S. health care system. But since the November elections one program just keeps coming up.

Medicaid
Medicaid
Medicaid
Medicaid

DG: Medicaid, the public health insurance program for low-income and disabled Americans, covers 80 million people — nearly 1 in 4 Americans. Few people have thought more about Medicaid than Dan Tsai.

Dan Tsai (DT): I think it is the coolest public program in existence. Others may debate with me, but that is my. That is my stance.

DG: Dan’s run the program at the federal level for the last three years. And he arrived with a to-do list: provide care outside the walls of the doctor’s office and make it easier for people eligible for Medicaid to stay on Medicaid.

Today, with the Trump administration waiting in the wings, we talk with Dan Tsai about what he’s learned and his hopes — and concerns — for the program’s future. From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

*****

DG: Dan Tsai calls being the federal Medicaid director his “dream job.” When he got the gig back in 2021, he wrote up his priorities in the journal Health Affairs. One of them: tackle what’s called churn — a chronic issue where eligible people lose their coverage because of problems with paperwork or other administrative barriers. A reason his job even exists, Dan says, is to just make it as easy as possible for people to sign up or stay enrolled. He came to Washington driven to end what he saw first-hand in Massachusetts.

DT: I remember going one day to literally help people fill out their enrollment forms. And I was sitting there, a family came in and needed help. And Massachusetts is, you know, a great state when it comes to health care. And I’m the Medicaid director, and I couldn’t help them diddly squat. I was flipping through, I forget how many pages, 14 pages of the application. There are questions around this thing that happened to them or this income change. That really cast a very clear light on why is it so difficult for folks to enroll in and renew their Medicaid. Fast forward to ’21, when I came to CMS. I had regret that I did not do more in Massachusetts in my time there to really target and look at that. 

DG: So you’re saying during your time at CMS, in moments when you’ve thought about churn, part of you has gone back to that family in Massachusetts and the 14 page application, and you feeling impotent to help them.

DT: Yes. And wishing that I had done more.I guarantee, if you and I were enrolled in Medicaid for our families and my best answer to you of when you would go up for your Medicaid renewal was, “I don’t know, check your mail every day for the next year and make sure you don’t miss that piece of paper. And if you don’t respond in the 10 days or whatever that your state gives you, you’re going to lose health care coverage. And your kid who relies on critical medications might not be able to get them,” we would be so angry, so frustrated. We would not accept that. And that is what 1 in 4 people in the country have had to experience for far too long. And so I wish I had done more in Massachusetts to focus on that.

DG: So you get to CMS and are confronted with churn on steroids — the so-called Great Unwinding. That’s when states had to check the eligibility of around 95 million people who were on Medicaid right after the pandemic, and lots of folks were worried people who qualified would get kicked off.

Ultimately, around 25 million people were disenrolled, but most seem, Dan, to have found other coverage. What was the biggest lesson you feel like you learned from the unwinding about how to avoid churn, to make it easier for eligible people to stay on Medicaid?

DT: I think one, it is possible to make real material progress on how burdensome and complicated and how much churn there is in Medicaid eligibility. We doubled the rate of auto renewals. The percent of people going through a renewal where a state — based on using their state wage data and other data sources — can just ping up and say, you know what? That person was at $13,000 of income last year, they were still at $13,000 of income. We should auto renew them. 

DG: So when you’re talking about auto-enrollment, no more waiting by the mailbox.

DT: No more waiting by the mailbox. You’ll get a piece of mail that says, congratulations, you were eligible last year. We have access to data sources that say you’re still eligible. You’re re-enrolled in Medicaid. We doubled that from 25 to 53 percentage points over the course of 18 months. I have very seldom seen progress at this scale and speed, and I think this came from the entire country having this amount of absolute dedicated focus with both CMS and states rolling up their sleeves and doing a shit ton of work. I cannot emphasize how difficult, whether it’s a blue or red state, you have dedicated public servants doing incredible things. Those numbers speak for themselves. 

DG: It sounds like the result is an increase in people who are being auto-enrolled in the program. What’s the lesson, though, Dan?

DT: The lesson is that there are quickly implementable both policy operations and systems changes that states and the federal government can make. Churn is still there. The experience is still too complicated, but we’ve made a massive dent in that. This is not an insurmountable thing. That is such deep rocket science like, how to improve the entire health of the population. That is a holy grail question. This question is much simpler. And it takes very concerted, detailed work, but it can actually happen, and it can happen over a relatively compressed time frame. 

DG: Dan, I’m sure you are familiar with this. Some conservatives have said your office needlessly kept people on the rolls. They point to studies showing that during the Great Unwinding, more than 10 million people didn’t know they were still on Medicaid, and many of them — at the same time — went out and bought private insurance, arguing that demonstrates peoples’ ability to afford their own coverage. Critics call this a waste of taxpayer dollars that just lined the pockets of insurance companies who get paid by the government to run these plans. What do you make of this critique?

DT: I don’t think that is a fair criticism. Many of the types of policies we put in are focused on how to keep eligible people enrolled. And we have seen many people that lost their coverage during the unwinding period came back very quickly. That tells us they were still eligible. 

DG: And so when you say this is not a fair criticism, what part of the critique do you feel like misses the mark the most?

DT: So I’ll give you one example. If last year you were low income, meaning under the federal poverty limit, so $15,000 for an individual or $31,200 for a family of four. And this year, when the state pings up against all known electronic data sources and does not return any income, 92% of the time, in that case, you’re likely still to be low income and would qualify for the Medicaid program. We know from the data a lot of those people were falling through the cracks. You have many eligible people inappropriately losing health care coverage. And that really is behind a lot of the detailed, not sexy, but really important work that we and states did to make some of those numbers move in the way I mentioned.

DG: So let me repeat this cause it sounds like what you said is really a big deal. You all analyzed Medicaid enrollment data and found that for people who made under the federal poverty limit, 92% of the time, those folks were still eligible for Medicaid a year later. 92% of the time.

DT: That’s right, that’s right.

DG: And, for you, that’s evidence that the work you did was really about keeping eligible people enrolled. And so what I’m hearing from you is when you step back and you have to accept that no solution is perfect. In fact, there are. I’m sort of being funny here. There are tradeoffs.

DT: Correct.

DG: The bigger problem is when people are inappropriately getting kicked off of Medicaid. That is a bigger problem than when people are inappropriately staying on Medicaid.

DT: That’s right.This is a very surgical way of reducing red tape. And these are the types of, I think, smart, data driven policies that actually make a difference and they’re well calculated.

DG: Republicans historically have been more interested in keeping Medicaid rolls smaller, regularly checking people’s eligibility. With the new Trump administration and a GOP Congress, do you think the strides that you’ve made, these auto enrollment strides, are going to last?

DT: So I am both optimistic, and I think we’re at a time of great risk for the program. I’m optimistic because so much of the progress that we just discussed was a ton of systems and operational work between our team and the states to actually fix things that were at the state level. And the reason why I say progress is at risk is because the types of policies that could be considered, they will lead to more eligible people going uninsured. And I think it will be very damaging to the health of the American people.

DG: We’ll talk about those potential changes Republicans are considering and lessons Dan has learned about Medicaid covering unconventional care after the break.

MIDROLL

DG: Welcome back. We’re talking with Dan Tsai about the lessons he’s learned in his three years as the federal Medicaid director under President Biden.

Dan, one of the other priorities you outlined back in 2021 was innovation in particular, exploring if and how Medicaid should pay for things beyond traditional health care, things like housing and food. I’m curious if there’s a story that explains why pushing the bounds of Medicaid outside of a doctor’s office or the hospital was a priority for you?

DT: So I used to cut hair at Boston Healthcare for the Homeless. And I got to know, I’ll call him Rob. He was unhoused, unsheltered. He had some medically complex physical health care issues and also a range of behavioral health issues. And I would always cut his hair when he was basically admitted across the street into Boston Medical Center, and then he’d be discharged. Over the course of a year and a half, he became almost unrecognizable in terms of his physical appearance and also his mental capacity.  You know, I was the Medicaid director at that time, cutting hair. He was enrolled in Medicaid. And yet I could do absolutely nothing for him but watch him cycle in and out.

DG: You were watching a man deteriorate in front of your eyes? 

DT: Yes, in multiple ways. Mentally. Physically. 

DG: One of the challenges, it sounds like, Dan, is that in Massachusetts, the state was paying for Rob to get medical attention. He’s accessing care and he’s still getting worse. 

DT: And I think that feeling of not even treading water, but going backwards everyone has those same observations and a deep frustration of, why can’t we organize the different parts of the health care and social service system in a way that has fewer people falling between the cracks? And there are many really important questions, not least of which is, what should Medicaid pay for? Because we are a health insurance health coverage program. And after a year and a half of intense policy debate at the federal level, we came to the conclusion that, yes, Medicaid does have a role with guardrails in actually paying for, in certain circumstances, things like housing and nutrition supports.

DG: When you came to CMS to push this idea forward, what data did you come with to help persuade people that Medicaid should do something that it really historically has just not done in as serious a way, which is really lean into the social service supports for people?

DT: You know, I don’t have the exact numbers at the national level. But I remember various states and in Massachusetts when we looked, you always find a small percentage — five seven, sometimes even two percent of people — account for an enormously large portion of health care costs. Those individuals, almost without fail, have this incredible complexity of physical health care conditions, often mental health, behavioral health conditions, and a range of psychosocial things, including housing instability, sometimes nutritional instability. And on a Medicaid program that costs $900 billion across the country, you have to find a better way of making sure we can deliver care, how we think about the sustainability of the program and not having kind of this incredible spend for folks just to bounce in and out of acute care settings.

DG: Dan, what did you see in the evidence during that year and a half that convinced you that Medicaid could make a difference?

DT: Sothere’s a lot of room to improve on the literature and to actually be able to measure the impact on health outcomes and cost over time. But there are so many pieces of literature that actually do coalesce around very specific types of housing supports and interventions, as well as very specific nutritional supports, which is why we really zone in on housing and nutrition and very specific types of interventions that we could find evidence for, including things like permanent supportive housing, transitional housing, and the sort of case management that really needs to exist and wrap around that in order to make the housing interventions effective.

DG: And so that’s part of why you, at CMS, have approved various state experiments to try to figure out what sort of social supports can we provide this small group of people to help them improve their health and stop them from cycling in and out of the hospital, in and out of the emergency room, and costing the program so much money.

DT: That’s exactly right. And that’s why we’ve done it in these things called Medicaid 1115 waivers, because the whole point of those is to actually test different ways of delivering care and to find ways to monitor, to evaluate that and to figure out what of that can additionally be scaled across the entire program.

DG: What do you feel like now, do you feel like you have learned about how far outside the four walls of the hospital Medicaid should go? 

DT: One really critical thing I would say to anyone interested in this is to not underestimate how difficult it is to make this actually work on the ground. In part because you are bringing oil and water together. I’ve been in rooms with shouting matches, literally between health care providers and the CBOs, the community based organizations, all accusing the others of malintent or lack of competence and things of that sort. And so I think that is a huge area where we need to make progress in order to fully realize the potential of solving the sort of cases that I mentioned with Rob and, and, and folks cycling in and out and through the system.

DG: You’ve spent the last three years trying to make it easier for people to get on Medicaid and stay on Medicaid. The incoming Congress and the incoming administration have talked about various plans that ultimately could shrink the program. And so the question is, based on the evidence and data, what do we know about the health impacts of people having Medicaid?

DT: Medicaid saves people’s lives. I do not think it is at all an exaggeration to say, because those are massive cuts to the program, you are going to have worse health outcomes and people will lose their lives as a result.

DG: So I just want to spend a minute, Dan, with you in the evidence and in the data. As a health care reporter, people have told me for years health insurance is just one of multiple factors that contribute to a person’s overall health. And in fact, insurance itself is not maybe even the most important. Given that we’re going to hear a lot of people talking about that and making that sort of point, that health insurance is actually less important than other things to living a healthy life. What can we sort of say, again, based on evidence and data, definitively about the benefits that come from having Medicaid as a form of insurance?

DT: We know very clearly that having Medicaid leads to a significant reduction in kids dying. One study showed a 5% reduction in childhood mortality for kids having access to Medicaid, and also in adult mortality. Medicaid expansion has been shown to reduce adult mortality by 9% over the first four years of Medicaid expansion after the Affordable Care Act. That’s 15,000 deaths that could have been avoided had all states adopted Medicaid expansion in 2014. We also have a wealth of studies that show when people do have access to Medicaid coverage, they will use primary care, they will access preventative services, mental health services. And they don’t forego getting things like their prescription drugs. 

DG: If you were called back to testify in front of Congress and people asked you what is the value of Medicaid, you would say something to the effect of Medicaid saves lives.

DT: Absolutely.And I just also want to emphasize the broader economic and societal benefits from Medicaid that I think most folks don’t fully internalize. When I was the Medicaid director in Massachusetts, some of the most urgent phone calls I would get would be around the viability of a local hospital, the ability for Medicaid to be able to continue reimbursing that hospital, and the implication of hundreds, in some cases, thousands of jobs local to that community of having an anchor institution available. Whether or not your teachers in the community and others could have a place to access oncology care, or whether or not there would be a hospital available for people in the community to deliver babies locally.And I think that’s a really, really important piece to underscore as well.

DG: You’re obviously concerned about the fate of Medicaid under President Trump and a Republican Congress. You were also a state Medicaid director during the first Trump administration. What did you learn between 2016 and 2020 that could help other Medicaid directors who share your values find common ground with the new incoming administration?

DT: I think, number one, you run your program well, you don’t give any reason for the feds to have to audit you or look at you doing something incorrectly. You have to have your ship in order.And we really identified the many areas where states have tremendous discretion in running their own state programs. And that creates a lot of opportunity for states to continue to make day to day operational choices that don’t rise up to a needing federal approval or some big, splashy thing, but has a tremendous impact on, say, keeping eligible people enrolled and covered in the program. Those, I think, are really, really important pieces.

DG: What’s next for you, Dan? Final question.

DT: I don’t know. I generally have always had the philosophy of doing whatever I’m doing with my whole heart and doing it until the very end. What I know is, I love Medicaid, I love health care, and so I don’t see myself straying far from this sort of work. What that looks like remains to be seen. I hope to have a few months to see my kids and get back in shape.

DG: Dan, thanks for taking the time to talk to us on Tradeoffs.

DT: Thanks so much for having me.

DG: I’m Dan Gorenstein, this is Tradeoffs.