Medicaid waiver applications test new administration’s policies

If CMS approves Maine and Wisconsin’s proposed Section 1115 Medicaid waivers, it will be marking a departure from the Obama Administration’s stance against work requirements and other previously unapproved proposals. The Kaiser Family Foundation (KFF) examined provisions of state waivers that are unrelated to Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) Medicaid expansion, and opined that the Maine and Wisconsin proposals could result in a loss of coverage and higher costs for consumers. Both states’ proposals are open for public comment in the month of May; if approved, implementation could take place within six months.

Work requirements

The Obama Administration opposed the imposition of work requirements as a condition of the Medicaid program, finding that it did not promote health and access to care. However, HHS Secretary Price and CMS Administrator Varma recently issued a letter to state governors, stating, “The best way to improve the long-term health of low-income Americans is to empower them with skills and employment.” Verma also said that CMS would review Section 1115 waiver requests with an eye to encouraging “meritorious innovations that build on the human dignity that comes with training, employment and independence” (see Did CMS just sound the death knell for Medicaid expansion?, March 15, 2017).

Wisconsin’s plan would require childless adults ages 19 to 49 to work or participate in job training for 80 hours per month, but would allow exemptions for mental illness, receipt of Social Security Disability, and several other categories. Maine’s proposal would require traditional adults ages 19 to 64 to participate in paid employment or approved job training for 20 hours per week, volunteer 24 hours per month, enroll at least half-time at an academic institution, participate in combined work and education for 20 hours per week, receive unemployment benefits, or provide caregiver services for a non-dependent disabled person, but only if they are planning a career in that area. If approved, they would be the first approved work requirements in the nation. Wisconsin has also proposed drug screening, while Maine has proposed premiums higher than 2 percent of income in some cases. Both states proposed eligibility time limits. No such proposals have been approved in the past.

KFF concerned

KFF expressed concern that both states admitted that coverage would decrease as a result of the waivers and that costs would increase. It noted that CMS has traditionally required Section 1115 waivers to be budget neutral, resulting in post-waiver federal costs that do not exceed pre-waiver federal costs. It is also concerned that proposals that have been tested in other states, including health behavior programs, are overly complex, and that other provisions, such as a requirement that individuals pay a premium before coverage being, create barriers to access or result in loss of coverage.