Tag Archives: Section 1115 Medicaid Waivers

1115 Medicaid Waivers: From Care Delivery Innovations to Work Requirements

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After months of debate, the Medicaid program emerged from efforts to repeal and replace the Affordable Care Act (ACA) without major legislative changes. Now, however, the Trump administration is encouraging states to apply for waivers that place new conditions on Medicaid eligibility as well as additional costs on beneficiaries in the form of premiums and copayments at the point of service.

To better understand the continuing controversy over Medicaid, let’s take a look at the waiver program’s objectives and how states have used waivers in the past. Are recently proposed state waivers consistent with Medicaid’s underlying mission? And are federal and state authorities appropriately evaluating them for their impact on Medicaid populations?

What is a Medicaid Section 1115 waiver?

Medicaid grants states autonomy in how they run their programs. Under a provision of the Social Security Act, Section 1115, the U.S. Secretary of Health and Human Services (HHS) can waive federal guidelines on Medicaid to allow states to pilot and evaluate innovative approaches to serving beneficiaries. Most waivers are granted for a limited period and can be withdrawn once they expire.

States seek 1115 waivers to test the effects of changes both in coverage and in how care is delivered to patients. The Centers for Medicare and Medicaid Services (CMS), a government agency, reviews each waiver application to ensure not only that it furthers the core objective of Medicaid — to meet the health needs of low-income and vulnerable populations — but also that the proposed demonstration does not require the federal government to spend more on the state’s Medicaid program than it otherwise would.

However, a recent General Accountability Office (GAO) review found that, because of significant limitations, evaluations of 1115 demonstrations often do not provide enough information for policymakers to understand the waivers’ full impact.1 The GAO recommended that CMS establish procedures to ensure that all states submit final evaluation reports at the end of each demonstration cycle, issue criteria for when it will allow limited evaluations of demonstrations, and establish a policy for publicly releasing findings from federal evaluations.

How have 1115 waivers been used in the past?

States have been granted waivers throughout the 53-year history of Medicaid. Most waivers were small in scope until the 1990s, when states started to use them for a wide range of purposes, including to: expand eligibility, simplify the enrollment and renewal process, reform care delivery, implement managed care, provide long-term services and supports, and alter benefits and cost-sharing. Some states have used 1115 waivers to change the way care is delivered to Medicaid patients, like encouraging investments in social interventions. Oregon, for example, used its waiver to establish Coordinated Care Organizations — partnerships between managed care plans and community providers to manage medical, behavioral health, and oral health services for a group of Medicaid beneficiaries.

With the ACA’s enactment, a new category of low-income adults became eligible for Medicaid. After the Supreme Court ruled in 2012 that this eligibility expansion was optional for states, eight states applied for 1115 demonstration waivers from the Obama administration to test different approaches to expanding eligibility, including the introduction of premiums and copayments that exceeded federal guidelines. One of those states, Arkansas, has used Medicaid funds to purchase private health insurance for marketplace enrollees.

How are 1115 waivers changing?

With encouragement from the Trump administration, many states are applying for waivers to make employment, volunteer work, or the performance of some other service a requirement for Medicaid eligibility. The administration has also encouraged waivers to impose premiums and increases in cost-sharing.

States can take different approaches to work or service requirements. Some might require them only for the Medicaid-expansion population (working-age adults with incomes up to 138 percent of the federal poverty level), while other states might also require employment of the traditional Medicaid population.

As of early April 2018, three states — Kentucky, Indiana, and Arkansas — have received approval for work- or service-requirement waivers. Seven others have pending waivers for new applications, amendments to existing waivers, or requests for renewals or extensions.

In Kentucky — the first state to have its work-requirement waiver approved — affected beneficiaries must complete 80 hours per month of community-engagement activities, such as employment, education, job skills training, or community service. Documentation of meeting this requirement is required to remain eligible for coverage. Exemptions are granted to pregnant women, people considered medically frail, older adults, and full-time students. Indiana and Arkansas have received approval for similar waivers.

Shortly after Kentucky’s waiver was approved, attorneys representing 15 Medicaid beneficiaries sued the HHS secretary in federal court (Stewart v. Azar), arguing that the objective of promoting work is not consistent with Medicaid’s core purpose of “providing medical assistance (to people) whose income and resources are insufficient to meet the cost of necessary medical services.”2 The lawsuit’s outcome will affect whether some of the state demonstrations will be able to proceed.

What’s the bottom line?

The 1115 demonstration waiver program is intended to fulfill the primary purpose of Medicaid: to provide health care protection to poor and disabled Americans. The new waivers seeking to impose work or service requirements, as well as others that would impose lifetime coverage limits or premiums, should be fully and carefully evaluated to determine whether they meet this goal. In addition to state and federal evaluations, independent assessments of state demonstrations will be important to informing policymakers and the public about the waivers’ full impact.

 

Health Care and the 2018 Midterms, Attitudes Towards Proposed Changes to Medicaid

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Kaiser Health Tracking Poll – February 2018: Health Care and the 2018 Midterms, Attitudes Towards Proposed Changes to Medicaid

 

KEY FINDINGS:
  • Medicaid continues to be seen favorably by a majority of the public (74 percent) and about half (52 percent) believe the Medicaid program is working well for most low-income people covered by the program.
  • When asked about proposed changes to the Medicaid program, attitudes are largely driven by party identification. A large majority of Democrats (84 percent) and most independents (64 percent) oppose lifetime limits for Medicaid benefits, while Republicans are more divided in their views with half (51 percent) believing Medicaid should only be available for a limited amount of time.

    Poll: Public split on whether adding work requirements for Medicaid beneficiaries aims at reducing spending (41%) or lifting people out of poverty (33%) 

  • Party identification also drives views on what individuals believe is the main reason behind some states imposing Medicaid work requirements. A larger share of Democrats and independents believe the main reason for these work requirements is to reduce government spending (42 percent and 45 percent, respectively) than believe it is to help lift people out of poverty (26 percent and 31 percent). On the other hand, a similar share of Republicans say it is to reduce government spending (40 percent) as say it is to help lift people out of poverty (42 percent). Individuals living in states pursuing Medicaid work requirements are also divided on the main reason for these limits, even when controlling for party identification.

    54% of the public now holds favorable views of the Affordable Care Act – the highest share in more than 80 tracking polls 

  • The February Kaiser Health Tracking Poll finds a slight increase in the share of the public who say they have a favorable view of the Affordable Care Act (ACA), from 50 percent in January 2018 to 54 percent this month. This is the highest level of favorability of the ACA measured in more than 80 Kaiser Health Tracking Polls since 2010. This change is largely driven by independents, with more than half (55 percent) now saying they have a favorable opinion of the law compared to 48 percent last month. Large majorities (83 percent) of Democrats continue to view the law favorably (including six in ten who now say they hold a “very favorable” view, up from 48 percent last month) while nearly eight in ten Republicans (78 percent) view the law unfavorably (unchanged from last month).
  • The majority of the public are either unaware that the ACA’s individual mandate has been repealed (40 percent) or are aware that it has been repealed but incorrectly think the requirement is not in effect in 2018 (21 percent). Few (13 percent) are aware the requirement has been repealed but is still in effect for 2018.
  • More than twice as many voters mention health care costs (22 percent) as mention repealing/opposing the ACA (7 percent) as the top health care issue they most want to hear 2018 candidates discuss in their campaigns. Health care costs are the top issue mentioned by Democratic voters (16 percent) and independent voters (25 percent), as well as one of the top issues mentioned by Republican voters (22 percent), followed by repealing or opposing the ACA (17 percent).

2018 Midterm Elections

With still a few months until the midterm elections are in full swing, the latest Kaiser Health Tracking Poll finds health care costs as the top health care issue mentioned by voters when asked what they want to hear 2018 candidates discuss. When asked to say in their own words what health care issue they most want to hear the candidates talk about during their upcoming campaigns, one-fifth (22 percent) of registered voters mention health care costs. This is followed by a series of other health care issues, such as Medicare/senior concerns (8 percent), repealing or opposition to the Affordable Care Act (7 percent), improve how health care is delivered (7 percent), increasing access/decreasing the number of uninsured (6 percent), or a single-payer system (5 percent). Health care costs is the top issue mentioned by Democratic voters (16 percent) and independent voters (25 percent), as well as one of the top issues mentioned by Republican voters (22 percent), followed by repealing or opposing the ACA (17 percent).

Figure 1: Health Care Costs Are Top Health Care Issue Voters Want 2018 Candidates to Talk About During Their Campaigns

Battleground Voters

Health care costs are also the top issue mentioned by voters living where there are competitive House, Senate, or Governor races. One-fourth (23 percent) of voters in areas with competitive elections mention health care costs when asked what health care issue they most want to hear candidates talk about. Fewer mention other health care issues such as improve how health care is delivered (9 percent) or increasing access/decreasing the number of uninsured (6 percent).

2018 Midterm Election Analysis

As part of Kaiser Family Foundation’s effort to examine the role of health care in the 2018 midterm elections, throughout the year we will be tracking the views of voters – paying special attention to those living in states or congressional districts in which both parties have a viable path to win the election. This group, referred to in our analysis as “voters in battlegrounds” is defined by the 2018 Senate, House, and Governor ratings provided by The Cook Political Report. Congressional and Governor races categorized as “toss-up” were included in this group. A complete list of the states and congressional districts included in the comparison group is available in Appendix A.

The Affordable Care Act

This month’s Kaiser Health Tracking Poll finds a slight increase in the share of the public who say they have a favorable view of the 2010 Affordable Care Act (ACA). The share of the public who say they hold a favorable view of the law has increased to 54 percent (from 50 percent in January 2018) while 42 percent currently say they hold an unfavorable view. This is the highest level of favorability of the ACA measured in more than 80 Kaiser Health Tracking Polls since 2010.  This change is largely driven by independents, with more than half (55 percent) now saying they have a favorable opinion of the law compared to 48 percent last month. Large majorities (83 percent) of Democrats continue to view the law favorably (including six in ten who now say they hold a “very favorable” view, up from 48 percent last month) while nearly eight in ten Republicans (78 percent) view the law unfavorably (unchanged from last month).

Figure 2: More of the Public Hold a Favorable View of the ACA

Public Awareness of the Repeal of the ACA’s Individual Mandate

The February Kaiser Health Tracking Poll finds a slight uptick (from 36 percent in January 2018 to 41 percent this month) in the share of the public who are aware that the ACA’s requirement that nearly all individuals have health insurance or else pay a fine, known commonly as the individual mandate, has been repealed. Yet, misunderstandings persist. The majority of the public (61 percent) are either unaware that this requirement has been repealed (40 percent) or are aware that it has been repealed but incorrectly think the requirement is not in effect in 2018 (21 percent of total). Few (13 percent) are aware the requirement has been repealed but is still in effect for 2018.

Figure 3: Confusion Remains on the Status of the ACA’s Individual Mandate

Medicaid

In recent months, President Trump’s administration has supported state efforts to make changes to their Medicaid programs, the government health insurance and long-term care program for low-income adults and children. Seven in ten Americans say they have ever had a connection to the Medicaid program either directly through their own health insurance coverage (32 percent) or their child being covered by the program (9 percent), or indirectly through a friend or family member covered by the program (29 percent).

Figure 4: Seven in Ten Americans Say They Have Ever Had A Connection to Medicaid

Majority of the Public Holds Favorable Views of Medicaid and Thinks the Program is Working Well

Overall, the majority of the public (74 percent) holds favorable views of Medicaid, including four in ten who have a “very favorable” view. About one-fifth of the public (21 percent) hold unfavorable views of the program. Unlike attitudes towards the ACA, opinions towards Medicaid are not drastically different among partisans and majorities across parties report favorable views. However, a larger share of Republicans do hold unfavorable views (29 percent) compared to independents (21 percent) or Democrats (13 percent).

Figure 5: Large Shares Across Parties Say They Have a Favorable Opinion of Medicaid

In addition, more believe the program is working well than not working well for most low-income people covered by the program. This holds true across partisans with about half saying the Medicaid program is “working well” and about one-third saying it is “not working well.”

Figure 6: Larger Shares Say Medicaid Is Currently Working Well for Most Low-Income People Covered by the Program

Support for Medicaid Expansion in Non-Expansion States

One of the major changes brought on by the ACA was the option for states to expand Medicaid to cover more low-income people. As of February 2018, 18 states have not expanded their Medicaid programs.

Figure 7: Status of Medicaid Expansion Among States

Among individuals living in states that have not expanded their Medicaid programs, most (56 percent) say they think their state should expand Medicaid to cover more low-income uninsured people while four in ten (37 percent) say their state should keep Medicaid as it is today. Slightly more than half of Republicans living in non-expansion states say their state should keep Medicaid as it is today (54 percent) while four in ten (39 percent) say their state should expand their Medicaid program. Majorities of Democrats (75 percent) and independents (57 percent) say their state should expand their Medicaid program.

Figure 8: Democrats and Independents Are More Likely to Want Their State to Expand Medicaid Than Republicans

Proposed Changes to Medicaid

SECTION 1115 WORK REQUIREMENT WAIVERS

In January, the Centers for Medicare and Medicaid Services (CMS) provided new guidance for Section 1115 waivers, which would allow states to impose work requirements for individuals to be covered by Medicaid benefits. As of February 21, CMS has approved work requirement waivers in two states (KY and IN) and eight other states have pending requests.1 When asked what they think the reasoning is behind these proposed changes to Medicaid, a larger share of the public (41 percent) believe the main reason is to reduce government spending by limiting the number of people on the program than say the main reason is to help lift people out of poverty (33 percent). There are differences among demographic groups with a larger share of Democrats and independents believing the main reason is to reduce government spending, while Republicans are more divided with similar shares saying the main reason is to lift people out of poverty (42 percent) as reduce government spending (40 percent).

Figure 9: Republicans Are Divided on the Main Reason Behind the Trump Administration Permitting Work Requirements

There are also differences between individuals living in states that have either filed a Medicaid waiver for a work requirement or have had a waiver approved and those living in states that do not have Medicaid work requirement waivers pending or approved.2 Individuals living in states with pending or approved Medicaid work requirements are divided on whether the main reason for these limits is to lift people out of poverty (37 percent) or reduce government spending (36 percent). This holds true even when controlling for other demographic variables such as party identification and income that may influence beliefs.

Figure 10: Those in States with Medicaid Work Requirements Are Divided on the Main Reason Behind Them

SECTION 1115 LIFETIME LIMIT WAIVERS

In addition to work requirement waivers, five states are currently seeking waivers from the Trump administration to impose Medicaid coverage limits. These “lifetime limits” would cap Medicaid health care benefits for non-disabled adults. When asked how they think Medicaid should work, two-thirds of the public say Medicaid should be available to low-income people for as long as they qualify, without a time limit, while one-third say it should only be available to low-income people for a limited amount of time in order to provide temporary help. The vast majority of Democrats (84 percent) and most independents (64 percent) say Medicaid should be available without lifetime limits, while Republicans are divided with similar shares saying they favor time limits (51 percent) as saying they do not favor such limits (47 percent). Seven in ten (71 percent) of individuals who have ever had a connection to Medicaid say they do not support lifetime limits compared to three in ten (28 percent) who say it should only be available for a limited amount of time in order to provide temporary help.

Figure 11: Majorities of Democrats and Independents Say Medicaid Should Be Available Without a Time Limit; Republicans Are Divided

 

 

Understanding the Intersection of Medicaid and Work

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Medicaid is the nation’s public health insurance program for people with low incomes. Overall, the Medicaid program covers one in five Americans, including many with complex and costly needs for care. Historically, nonelderly adults without disabilities accounted for a small share of Medicaid enrollees; however, the Affordable Care Act (ACA) expanded coverage to nonelderly adults with income up to 138% FPL, or $16,642 per year for an individual in 2017. As of December 2017, 32 states have implemented the ACA Medicaid expansion.1 By design, the expansion extended coverage to the working poor (both parents and childless adults), most of whom do not otherwise have access to affordable coverage. While many have gained coverage under the expansion, the majority of Medicaid enrollees are still the “traditional” populations of children, people with disabilities, and the elderly.

Some states and the Trump administration have stated that the ACA Medicaid expansion targets “able-bodied” adults and seek to make Medicaid eligibility contingent on work. Under current law, states cannot impose a work requirement as a condition of Medicaid eligibility, but some states are seeking waiver authority to do so.  These types of waiver requests were denied by the Obama administration, but the Trump administration has indicated a willingness to approve such waivers. This issue brief provides data on the work status of the nearly 25 million non-elderly adults without SSI enrolled in Medicaid (referred to as “Medicaid adults” throughout this brief) to understand the potential implications of work requirement proposals in Medicaid.  Key takeaways include the following:

  • Among Medicaid adults (including parents and childless adults — the group targeted by the Medicaid expansion), nearly 8 in 10 live in working families, and a majority are working themselves. Nearly half of working Medicaid enrollees are employed by small firms, and many work in industries with low employer-sponsored insurance offer rates.
  • Among the adult Medicaid enrollees who were not working, most report major impediments to their ability to work including illness or disability or care-giving responsibilities.
  • While proponents of work requirements say such provisions aim to promote work for those who are not working, these policies could have negative implications on many who are working or exempt from the requirements. For example, coverage for working or exempt enrollees may be at risk if enrollees face administrative obstacles in verifying their work status or documenting an exemption.

Data Findings

Among nonelderly adults with Medicaid coverage—the group of enrollees most likely to be in the workforce—nearly 8 in 10 live in working families, and a majority are working themselves. Because policies around work requirements would be intended to apply to primarily to nonelderly adults without disabilities, we focus this analysis on adults whose eligibility is not based on receipt of Supplemental Security Income (SSI, see methods box for more detail). Data show that among the nearly 25 million non-SSI adults (ages 19-64) enrolled in Medicaid in 2016, 6 in 10 (60%) are working themselves (Figure 1). A larger share, nearly 8 in 10 (79%), are in families with at least one worker, with nearly two-thirds (64%) with a full-time worker and another 14% with a part-time worker; one of the adults in such families may not work, often due to caregiving or other responsibilities.

Because states that expanded Medicaid under the ACA cover adults with family incomes at higher levels than those that did not, adults in Medicaid expansion states are more likely to be in working families or working themselves than those in non-expansion states (Table 1). Adults who are younger, male, Hispanic or Asian were more likely to be working than those who are older, female, or White, Black, or American Indian, respectively (Figure 2 and Table 2). Not surprisingly, adults with more education or better health were more likely to work than others (Figure 3 and Table 2). Perhaps reflecting job market conditions, those living in the South were less likely to work than those in other areas, though similar rates of enrollees in urban and rural areas were working (Table 2). 

Most Medicaid enrollees who work are working full-time for the full year, but their annual incomes are still low enough to qualify for Medicaid. Among adult Medicaid enrollees who work, the majority (51%) worked full-time (at least 35 hours per week) for the entire year (at least 50 weeks during the year) (Table 3).2Most of those who work for only part of the year still work for the majority of the year (26 weeks or more). By definition (that is, in order to meet Medicaid eligibility criteria), these individuals are working low-wage jobs. For example, an individual working full-time (40 hours/week) for the full year (52 weeks) at the federal minimum wage would earn an annual salary of just over $15,000 a year, or about 125% of poverty, below the 138% FPL maximum targeted by the ACA Medicaid expansion.

Many Medicaid enrollees working part-time face impediments to finding full-time work.  Among adult Medicaid enrollees who work part-time, many cite economic reasons such as inability to find full-time work (10%) or slack business conditions (11%) as the reason they work part-time versus full-time. Other major reasons are attendance at school (14%) or other family obligations (14%).

Nearly half of working adult Medicaid enrollees are employed by small firms, and many work in industries with low employer-sponsored coverage offer rates.  Working Medicaid enrollees work in firms and industries that often have limited employer-based coverage options. More than four in ten adult Medicaid enrollees who work are employed by small firms with fewer than 50 employees that will not be subject to ACA penalties for not offering coverage (Figure 4). Further, many firms do not offer coverage to part-time workers. Four in ten Medicaid adults who work are employed in industries with historically low insurance rates, such as the agriculture and service industries. A closer look by specific industry shows that one-third of working Medicaid enrollees are employed in ten industries, with one in 10 enrollees working in restaurants or food services (Figure 5). The Medicaid expansion was designed to reach low-income adults left out of the employer-based system, so, it is not surprising that among those who work, most are unlikely to have access to health coverage through a job.

Among the adult Medicaid enrollees who were not working, most report major impediments to their ability to work.  Even though individuals qualifying for Medicaid on the basis of a disability through SSI were excluded from this group, more than one-third of those not working reported that illness or disability was the primary reason for not working. SSI disability criteria are stringent and can take a long time to establish. People can have physical and/or mental health disabilities that interfere with their ability to work, or to work full-time, without those impairments rising to the SSI level of severity. Other analysis indicates that nearly nine in ten (88%) non-SSI Medicaid adults who reports not working due to illness or disability has a functional limitation, and more than two-thirds (67%) have two or more chronic conditions such as arthritis or asthma.3

30% of non-working Medicaid adults reported that they did not work because they were taking care of home or family; 15% were in school; 6% were looking for work and another 9% were retired (Figure 6). Women accounted for 62% of Medicaid enrollees who were not working in 2016, and parents with children under the age of 6 accounted for 17%.

Policy Implications

Under current law, states cannot impose a work requirement as a condition of Medicaid eligibility. As with other core requirements, the Medicaid statute sets minimum eligibility standards, and states are able to expand coverage beyond these minimum levels. Prior to the ACA, individuals had to meet not only income and resource requirements but also categorical requirements to be eligible for the program. These categorical requirements provided coverage pathways for adults who were pregnant women or parents as well as individuals with disabilities, but other adults without dependent children were largely excluded from coverage. The ACA was designed to fill in gaps in coverage and effectively eliminate these categorical eligibility requirements by establishing a uniform income threshold for most adults. States are not allowed to impose other eligibility requirements that are not in the law.

Some states have proposed tying Medicaid eligibility to work requirements using waiver authority that may be approved by the Trump Administration. Under Section 1115 of the Social Security Act, the Secretary of HHS can waive certain provisions of Medicaid as long as the Secretary determines that the initiative is a “research and demonstration project” that “is likely to assist in promoting the objectives” of the program. The Obama administration did not approve waivers that would condition Medicaid eligibility on work on the grounds that they did not meet the waiver test to further the purpose of the program which is to provide health coverage. The Trump Administration has indicated a willingness to approve waivers to require work.

Research shows that Medicaid expansion has not negatively affected labor market participation, and some research indicates that Medicaid coverage supports work. A comprehensive review of research on the ACA Medicaid expansion found that there is no significant negative effect of the ACA Medicaid expansion on employment rates and other measures of employment and employee behavior (such as transitions from employment to non-employment, the rate of job switches, transitions from full- to part-time employment, labor force participation, and usual hours worked per week). In addition, focus groups, state studies, and anecdotal reports highlight examples of Medicaid coverage supporting work and helping enrollees transition into new careers. For example, individuals have reported that receiving medication for conditions like asthma or rheumatoid arthritis through Medicaid is critical in supporting their ability to work.  Addressing barriers to work requires adequate funding and supports.  While TANF spending on work activities and supports is critiqued by some as too low, it exceeds estimates of state Medicaid program spending to implement a work requirement.

Implementing work requirements can create administrative complexity and put coverage at risk for eligible enrollees who are working or who may be exempt.  States can incur additional costs and demands on staff, and some eligible people could lose coverage.  While work requirements are intended to promote work among those not working, coverage for those who are working could be at risk if beneficiaries face administrative obstacles in verifying their work status or documenting an exemption.  In addition, some individuals who may be exempt may face challenges in navigating an exemption which could also put coverage at risk.

Payer Roundup—Mississippi gets 10-year Medicaid waiver extension; A third of Americans believe ACA is repealed

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Medicaid

CMS approves 10-year Medicaid waiver extension for Mississippi

Last week, the federal government approved its first 10-year extension of a Section 1115 Medicaid demonstration program.

The Mississippi program provides family planning services for people ages 13-44 with income of up to 194% of the federal poverty level. To get approval for its 10-year extension, the state agreed to submit monitoring reports and participate in calls with CMS every year.

The lengthy waiver extension, according to CMS Administrator Seema Verma, lets Mississippi administer its Medicaid program “without the inconvenience of obtaining routine approvals from CMS.” The action also shows the agency’s “continuing commitment to giving states the flexibility they deserve to meet the unique needs of their people,” she said.

Alabama won’t freeze CHIP enrollment or stop coverage—for now

Because of the temporary funding for the Children’s Health Insurance Program included in Congress’ year-end spending bill, Alabama officials canceled their plans to freeze CHIP enrollment on Jan. 1.

The state will also not follow through with its plan to terminate coverage for current CHIP enrollees by Feb. 1, according to AL.com. But Cathy Caldwell, director of the Alabama Bureau of Children’s Health Insurance, told the publication that “we desperately need Congress to act, hopefully in January.”

Federal funding for CHIP expired Sept. 30, and Congress’ effort to reauthorize funding have been bogged down by partisan disputes. The short-term spending bill passed before the holiday break set aside $2.85 billion to temporarily tide states over.

One-third of Americans believe ACA has been repealed

President Donald Trump was not correct when he said that the GOP tax bill repealed the Affordable Care Act, but a new poll indicates a sizable chunk of Americans believe it nonetheless.

According to the poll (PDF), conducted by The Economist/YouGov, 31% of respondents indicated that Trump has delivered on his promise to repeal the healthcare law. Forty-nine percent said that he didn’t, and 21% were unsure.

The sweeping overhaul to the tax code that Republicans passed before the holiday break did repeal the ACA’s individual mandate, a key part of its insurance market reforms. But experts disagree on how big of an impact that will have, and other core components of the law—like premium subsidies—remain intact.

ACA expert to stop blogging for Health Affairs

Timothy Jost, who has chronicled nearly every Affordable Care Act-related development over the past 8½ years, will no longer contribute to the Health Affairs Blog’s “Following the ACA” series.

Jost, a Washington and Lee University professor emeritus, wrote more than 600 blog posts about the adoption and implementation of the healthcare law, plus the omnipresent political battles surrounding it. Jost wrote in his final post that “I am getting older and believe it is time to slow down.” He will continue to write a monthly “Eye on Reform” column for Health Affairs, however.

Katie Keith, a health policy expert with a law degree from Georgetown University and a master of public health from Johns Hopkins University, will take the helm as the author of the Health Affairs blog series on the ACA.

 

Section 1115 Medicaid Expansion Waivers: A Look at Key Themes and State Specific Waiver Provisions

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Seven states currently are implementing the Affordable Care Act’s (ACA) Medicaid expansion to low income adults up to 138% of the federal poverty level (FPL, $16,643 per year for an individual in 2017) in ways that extend beyond the flexibility provided by the law through Section 1115 demonstration waivers. While the future of federal legislation affecting the Medicaid expansion is unclear at this time, Section 1115 Medicaid expansion waiver activity continues as states submit amendments, extensions, and new waivers. While no decisions on expansion waivers have been issued under the new Administration to date, the Administration’s March, 2017 letter to state governors signaled some potential policy changes beyond what has been approved in the past. This issue brief focuses on approved (Arizona, Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire) and pending (Arkansas, Kentucky, and Indiana) Section 1115 waivers that implement the ACA’s Medicaid expansion. Table 1 below summarizes approved and pending provisions in Medicaid expansion waivers across these states. (See the Appendix Tables for additional detail about each state’s waiver.)

The ACA’s Medicaid expansion changes the role of Section 1115 waivers for coverage expansions, eliminating the need for a state to obtain a waiver to cover childless adults and providing significant federal funding (100% from 2014 through 2016, gradually decreasing to 95% in 2017, and 90% by 2020) for states to expand coverage. Prior to the ACA, a number of states used Section 1115 waivers to expand coverage to childless adults who then could not otherwise be covered under federal rules. Because Section 1115 waivers must be budget neutral for federal spending, according to long-standing federal policy, states could not receive additional federal funds to expand coverage to these adults and, as such, needed to redirect existing federal funds or find offsetting program savings to finance this coverage. The ACA eliminates the historic exclusion of adults without dependent children from Medicaid, enabling states to expand coverage without a waiver and with enhanced federal matching funds. As of August, 2017, 32 states including DC have adopted the expansion, with most implementing traditional expansions as set forth by the law, and seven states using Section 1115 waivers to implement in ways not otherwise permitted under federal law. In March 2017, the Trump Administration sent a  letter to state governors signaling support for waiver provisions including provisions not previously approved like those related to work requirements.Introduction

Key Waiver Policy Findings

APPROVED ACA EXPANSION WAIVERS

As of August, 2017, seven states (Arizona, Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire) have approved Section 1115 waivers to implement the ACA’s Medicaid expansion in ways that extend beyond the flexibility provided by the law. Some states sought waiver authority as a politically viable way to expand coverage and receive enhanced federal matching funds. Nearly all of these waivers are limited to provisions related to the Medicaid expansion; these waivers were the mechanisms by which these states first implemented their expansions. The exception is Arizona, which has a long-standing Section 1115 waiver that governs its entire Medicaid program, and which initially implemented a traditional expansion but subsequently obtained waiver authority to alter the terms of that expansion in ways not otherwise permitted under existing law.

While each expansion waiver is unique, they include some common provisions, such as implementing the Medicaid expansion through a premium assistance model; charging premiums beyond what is authorized in federal law; eliminating non-emergency medical transportation, an otherwise required benefit; and using healthy behavior incentives to reduce premiums and/or co-payments (Table 2). Indiana’s waiver includes provisions that had not been approved in other states, such as making coverage effective on the date of the first premium payment instead of the date of application; barring certain expansion adults from re-enrolling in coverage for six months if they are dis-enrolled for unpaid premiums (a three-month lock-out was later approved in Montana); and eliminating retroactive eligibility (later approved in New Hampshire and Arkansas). The retroactive eligibility waivers were conditional, requiring states to implement safeguards to protect beneficiaries from unpaid medical costs incurred just prior to Medicaid eligibility. For example, Indiana expanded its presumptive eligibility program and implemented a prior claims payment program to cover retroactive costs for the mandatory (non-expansion) parents and 19 and 20 year olds covered under its waiver. Arkansas and New Hampshire were required to ensure that eligibility determinations are timely and without gaps in coverage.

The previous Administration denied some specific provisions included in states’ Medicaid expansion waiver proposals, including premiums for beneficiaries with incomes under 100% FPL as a condition of eligibility; elimination of Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefits and beneficiaries’ free choice of family planning provider; and work requirements as a condition of eligibility. The previous Administration also denied Ohio’s waiver application, noting that Ohio had implemented a successful traditional ACA expansion and estimated that its proposed policy changes “would lead to over 125,000 people losing coverage each year” compared to the current expansion. CMS also issued policy guidance, consistent with its legal interpretation of the ACA, indicating that states cannot receive enhanced federal ACA expansion funding unless they cover all newly eligible adults through 138% FPL.DENIED ACA EXPANSION WAIVERS OR WAIVER PROVISIONS

PENDING ACA EXPANSION WAIVERS

Three states (Indiana, Kentucky and Arkansas) currently have Medicaid expansion waivers pending before the Centers for Medicare and Medicaid Services (CMS). Indiana proposes to extend its current Medicaid expansion waiver from 2018 through 2021, with some changes, such as a three-month coverage lock-out for beneficiaries who do not timely renew eligibility, a 1% premium surcharge for tobacco users beginning in the second year of enrollment, and outcome-based healthy behavior incentives related to tobacco cessation, substance use disorder treatment, chronic disease management, and employment. Indiana also submitted an amendment to its extension application, which includes conditioning eligibility on work for most adults, changing to a tiered premium structure instead of a flat 2% of income, and ending the premium assistance program for people with access to employer-sponsored insurance, among other changes (see Appendix Table 3). Kentucky has a waiver pending that seeks changes to its traditional expansion including:  implementing sliding scale premiums, requiring premium payment before coverage is effective, locking those above 100% FPL out of coverage for six months for premium non-payment, requiring work as a condition of eligibility for most adults, locking beneficiaries out of coverage for six months for failure to timely renew eligibility, adding a high deductible health savings account, offering a healthy behavior incentive account, and waiving NEMT (see Appendix Table 5). Kentucky also submitted an amendment to its pending application, which includes changing the work requirement from a graduated requirement (beginning at 5 hours/week and increasing to a maximum 20 hours/week) to a flat 20 hour/week requirement; adding disenrollment and lock-out provisions for failing to timely report changes to income or employment, or for making false statements involving work verification; and removing a proposed expansion of presumptive eligibility sites included in the original waiver application (see Appendix Table 5). Additionally, Arkansas submitted a proposed waiver amendment that would reduce Medicaid eligibility for expansion adults from 138% to 100% FPL while continuing to receive enhanced federal matching funds, establish a work requirement, end its premium assistance program for those with access to employer-sponsored insurance, and remove the conditions on its waiver of retroactive eligibility (establishing a hospital presumptive eligibility program, offering coverage during a reasonable opportunity period for verification of immigration status, and completing an eligibility determination mitigation plan).

One other state is preparing a waiver submission to CMS. Arizona completed a state public comment period for a waiver amendment that proposes changes to coverage for all “able-bodied” Medicaid adults, not only those who newly gained coverage under the ACA’s expansion, including a work requirement as a condition of eligibility, a 5-year lifetime limit on benefits, monthly income and work verifications and eligibility renewals, and a one-year lock-out for those who knowingly fail to report a change in income or make a false statement about work compliance. Arizona previously sought similar changes, which were denied by the Obama Administration in September, 2016, but state law requires Arizona to request these components annually. Table 3 summarizes states’ pending waiver requests that have not been approved by CMS to date.

Certain requirements apply to all Section 1115 waivers, not just those that authorize Medicaid expansions. While not required by statute or regulation, CMS has a longstanding policy that waiver financing must be budget neutral for the federal government, meaning that federal costs under a waiver must not exceed what federal costs would have been for that state without the waiver. The ACA also established new rules about transparency and evaluations for all waivers. Recognizing that waivers can authorize changes that impact beneficiaries, providers, health plans, and other stakeholders in important ways, the waiver transparency rules require state and federal public comment periods before all new waiver applications and extensions of existing waivers are approved by CMS. Although the final regulations involving public notice do not require a state-level public comment period for amendments to existing/ongoing demonstrations, CMS has historically applied these regulations to amendments.1 However, recently, Indiana submitted an amendment to its pending extension application and Kentucky submitted an amendment to its pending waiver application without completing/holding a state-level public comment period before submission.2 3 In keeping with statutory requirement that Section 1115 waivers test new program approaches, the evaluation rules require states to have a publicly available, approved evaluation strategy and to submit an annual report to HHS that describes the changes occurring under the waiver and their impact on access, quality, and outcomes.OTHER WAIVER PARAMETERS

Looking Ahead

State interest in Medicaid waivers (for expansion and for traditional Medicaid populations as well) as a way to gain flexibility to adapt their programs continues under the Trump Administration. While no decisions on new or amended expansion waivers have been issued to date, the Administration’s March, 2017 letter to state governors signaled some potential policy changes beyond what has been approved in the past. In terms of the waiver approval process, the letter reaffirms support for HHS’s long-standing budget neutrality policy, acknowledges reasonable public input processes and transparency guidelines, offers an expedited process for waiver renewals, and suggests greater consistency in evaluating and incorporating waiver requests that already have been approved in another state. The future of federal legislation affecting the Medicaid expansion is unclear at this time, so Medicaid policy changes authorized through Section 1115 waivers could happen on a faster timeline than federal legislative changes to the program and thus will be a key area to watch.

Republican governors have a stake in keeping the Medicaid expansion. Will congressional Republicans listen?

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https://www.brookings.edu/blog/fixgov/2017/01/24/medicaid-governors-and-congress/

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The House and Senate took the first steps two weeks ago towards an eventual repeal of parts of the Affordable Care Act (ACA). At the same time, significant uncertainty as to how efforts proceed from here remains. There are disagreements among congressional Republicans on virtually every component of a path forward, including a timeline, the connections between a repeal bill and an approach to replacement, and what, if any, components of the law should be preserved.

One important set of actors, however, has already begun to weigh in on the process: several of the nation’s Republican governors. In particular, a number—including Charlie Baker of Massachusetts, Rick Snyder of Michigan, John Kasich of Ohio, Asa Hutchinson of Arkansas, and Brian Sandoval of Nevada—have voiced concerns about eliminating the Medicaid expansion. Together, these governors—several of whom recently met with members of the Senate Finance Committee to discuss the law—lead roughly one third of the 16 states that chose to expand Medicaid and currently have Republican executives. According to new data from the Kaiser Family Foundation, they represent roughly 2.2 million individuals who enrolled in Medicaid in 2015 thanks to the ACA’s expansion, or roughly 6 percent of the total population in these states. (By comparison, the national average for states for which Kaiser was able to obtain data is roughly 7 percent of a state’s population.)

In the case of Medicaid, as political scientist Shanna Rose has demonstrated, Republican governors have a long history of taking a different tack than their national counterparts. One source of this state-level variation involves the ability of the Secretary of Health and Human Services to waive provisions of federal law, at a state’s request, to allow for Medicaid pilot, or demonstration, programs. Beginning in earnest during the Reagan administration and escalating in particular under Clinton, governors nationwide have experimented with service delivery through waivers. Some feared that this experimentation could lead to restricted access, but research by Frank Thompson and Courtney Burke finds that, pre-ACA, governors more often than not used section 1115 Medicaid waivers to expand access for low-income Americans. This historical trend has continued throughout the ACA era, as governors have bargained with the Obama administration to secure waivers that expand access to Medicaid in their states.