With 5 State Proposals Approved, What is the Future of Medicaid Waivers?

While 29 states plus the District of Columbia have chosen to expand Medicaid under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), five other states have proposed and been approved for Medicaid waivers. A Kaiser Family Foundation (KFF) Issue Brief explained that these waiver programs have been implemented in these states as they are seen as a “politically viable way to implement expansion in order to expand coverage and capture federal dollars.” As such, many other states are considering and have proposed demonstration projects in the form of Medicaid waiver programs.

Section 1115 Waivers

Under section 1115 of the ACA, states may choose to expand Medicaid coverage without following the expansion spelled out in the ACA, yet still receive funding available under the ACA through the creation and administration of a demonstration project. These waivers must be approved by CMS and, thus far, five states have submitted waivers that have been approved by the agency—Arkansas, Iowa, Michigan, Pennsylvania, and Indiana. These states have been allowed to administer a more flexible version of Medicaid expansion while still receiving 100 percent of the funding for the program from those found to be eligible between 2014 through 2016 and 90 percent of the costs of the program starting in 2020.

The KFF brief describes the shared features of the alternative Medicaid expansion models in the five states this way: “While the waivers are each unique, they include some common provisions such as implementing the Medicaid expansion through a premium assistance model, charging premiums, eliminating certain required benefits (most notably non-emergency medical transportation), and healthy behavior incentives.”

Indiana

The KFF Brief highlighted the most recently approved waiver in Indiana due to its unique characteristics. The provisions that are present in the Indiana waiver that were not included in other waivers include: (1) no retroactive eligibility; (2) effective dates of coverage beginning on the date of the first premium payment (rather than the application date); and (3) a bar on enrollment for adults re-enrolling in coverage for a time period of six months if that individual is dis-enrolled for unpaid premiums. Indiana also is allowed to charge higher cost-sharing rates for non-emergency use of the emergency room under a separate waiver pursuant to section 1916(f) of the ACA.

The Future of Waivers

In addition to approved waivers in the five states, KFF noted that many states have waiver proposals in the works. Most notably, both Tennessee and Utah have engaged in negotiations with CMS for waiver approval, yet these proposals also will need to be approved by the respective state legislatures. In February of 2015, the Wyoming alternative model, called SHARE, was rejected in the state Senate. In New Hampshire, a state which already expanded Medicaid under the ACA, a waiver with CMS based on a premium assistance model is also pending. For those waivers that CMS has denied, KFF states the following as reasons for the denials: (1) conditional work requirements; (2) premiums for individuals that have incomes less than 100 percent of the federal poverty line; and (3) requirements to provide certain wrap-around benefits to the extent that the Health Insurance Marketplace does not offer such coverage.

KFF concludes its Brief by considering the future of other waivers, such as those that will be made available to states under section 1322. In 2017, explains KFF, states will be allowed to apply for waiver of Marketplace coverage provisions and to combine those with Medicaid expansion waivers.