Did CMS just sound the death knell for Medicaid expansion?

In their first joint action, HHS Secretary Price and newly confirmed CMS Administrator Verma issued a letter to state governors discussing potential improvements to the Medicaid program. The letter underscored the need to develop cost-effective, state-specific ways to serve vulnerable populations but made clear the administration’s anti-expansion stance, noting that the Patient Protection and Affordable Care Act’s (ACA’s) (P.L. 111-148) expansion of Medicaid “to non-disabled, working-age adults without dependent children was a clear departure from the core, historical mission of the program.”

Overall, Price and Verma emphasized their desire to grant states more freedom to design their own programs, but committed to retaining mechanisms to ensure state accountability, including budget neutrality in waivers and demonstration projects. To this end, the letter suggested fast-tracking waiver and demonstration project extensions and developing consistent guidelines for evaluating requests to waivers and demonstration projects that have already been approved in other states. Price and Verma plan to use “Section 1115 demonstration authority to review and approve meritorious innovations that build on the human dignity that comes with training, employment and independence.” Prior to serving as CMS Administrator, Verma was involved in crafting Indiana’s Healthy Indiana 2.0 expansion program. The program initially sought to impose a work activity requirement. CMS declined to approve the requirement linked directly to Medicaid eligibility, but allowed the state to encourage enrollees to participate in other voluntary state programs (see Amendment of Healthy Indiana Plan implements Medicaid expansion, Health Law Daily, February 11, 2015).

Price and Verma also noted the importance of maintaining public input processes and transparency guidelines, with respect to State Plan Amendments (SPAs) and other actions, expressed a desire to make the SPA process less burdensome. They discussed allowing states more time to comply with a 2014 Final rule regulating expanded access to home- and community-based services (see Final rule sets requirements for expanded home and community based services, Health Law Daily, January 16, 2014). They made suggestions for aligning Medicaid policies for non-disabled adults with commercial health insurance features to help them “prepare for private coverage,” including alternative benefit designs with aspects similar to health savings accounts (HSAs), designing emergency room copayments to encourage the use of primary and other providers for non-emergency care, and facilitating enrollment in employer-sponsored health plans. They also plan to work with states to combat the opioid epidemic, through state plans, the Medicaid Innovator Accelerator Program, and other methods.

Michigan expands Medicaid to cover pregnant women and children of Flint

Michigan obtained approval for its Section 1115 waiver request to extend Medicaid coverage to Flint residents affected by exposure to lead. The demonstration will extend Medicaid coverage to 15,000 additional children and pregnant women. Additionally, under the program, 30,000 Medicaid beneficiaries in the Flint area will be able to access expanded benefits.

Demonstration

The expanded coverage will apply to children up to age 21 and pregnant women who used Flint’s water system from April 2014 through a date when the water is deemed safe. The coverage will be limited to those with incomes up to 400 percent of the federal poverty level. However, Michigan will provide individuals with higher incomes an opportunity to purchase coverage without subsidies. The state will provide targeted case management services as part of the arrangement in order to assist impacted residents with obtaining medical, social, and educational services. The demonstration will last for a period of five years.

Water crisis

The lead exposure problem began two years ago when the city’s water supply was changed from Lake Huron to the Flint River. Following the source transition, residents noticed changes in their water—discoloration and bad smell and taste. Ultimately it was determined that lead was present in the water. Research indicated that children from the area younger than five—the population most vulnerable to lead poisoning—showed elevated blood lead levels. According to the Centers for Disease Control and Prevention (CDC), lead can have serious long-lasting effects on children, from learning difficulties to death. The approval of the waiver request follows a declaration by the President that the Flint water crisis reached a state of emergency.

Medicaid

Other states have used Medicaid in emergency situations in the past. For example, approximately 350,000 New Yorkers were covered by Disaster Relief Medicaid (DRM) for the four-month time period following the September, 11, 2001, attacks. Michigan also used a Section 1115 waiver to expand its Medicaid program under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The state’s demonstration waiver, known as the “Healthy Michigan Plan” was initially approved on December 23, 2013. The Healthy Michigan Plan covers eligible adults with income up to and including 138 percent of the federal poverty level.