States Seeking Major Changes to Medicaid Program

Congress is in recess, and, for now, the Affordable Care Act (ACA) fight is on hold, at least legislatively. This is not so, however, for states and the Centers for Medicare & Medicaid Services (CMS). While the rejection of ACA repeal proposals under which Medicaid would face significant cuts was seen as a major win for the program and the underserved communities, the fight goes on as states look to make changes through 1115 waivers and wait for the outcome of the Children’s Health Insurance Program (CHIP) funding reauthorization. Discussed below is some of the recent impactful waiver activity.


In a drastic shift in policy from the Obama administration, CMS recently approved Florida’s waiver, which provides for $1.5 billion per year for the next five years for the Low Income Pool (LIP) program, which compensates for the cost of emergency care for the uninsured. The Obama administration took the opposite track with winding down funding for this program and lowered the amount to $600 million in the last year. The rationale was that Florida should use the funds to provide Medicaid expansion coverage to this uninsured population, which would provide preventive services as well rather than only cover high-cost hospitalization and emergency care.

This waiver was also the first to use the simplified reporting requirements. CMS said it will instead monitor the move toward state-chosen benchmarks and partner with Florida to create a meaningful-use evaluation.


The public comment period recently closed on the Texas proposal to end funding to abortion providers under the Medicaid Women’s Health Program. The previous administration banned such a waiver, arguing such a program violated federal law and thus was not eligible for federal funds. The question now is whether CMS will reverse course under Trump and allow Texas to ban places such as Planned Parenthood from funding

The federal government has historically declined to give Medicaid funding to states that don’t allow patients to choose between “any willing provider.” In 2011, Texas ousted abortion providers from the Medicaid Women’s Health Program, which the Obama administration argued violated federal law, leading to an end to federal funds. Allowing for the waiver would provide $400 million in federal funds over five years but would reduce access to care for thousands of women.

Two Democratic senators recently sent a letter to CMS stating the waiver is a violation of federal law. Legality aside, if CMS approves this waiver, other states may follow suit as a way to ban Planned Parenthood and other providers.


Work and premium contribution requirements quickly gained popularity once Price took over as the Health and Human Services (HHS) Secretary, with five new states requesting work requirements this year. The most recent waiver to gain notoriety is Maine because it is the only one to not have expanded Medicaid out of the five proposals. This means the work requirement would affect the lowest income earning Americans instead of affecting those individuals within the 105% to 138% of the federal poverty level as in expansion states. Maine also includes a proposal to add a monthly premium requirement, ranging from $10 to $40 a month, to this same population. If approved, this waiver would be an unprecedented policy deviation for the Medicaid program.




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