The Medicaid 1115 waiver program allows states to apply for and receive permission from the Center for Medicare and Medicaid Services (CMS) to waive certain federal guidelines for Medicaid. Almost every state has a 1115 waiver for something. They are most commonly known as the alternative pathway for Medicaid Expansion for Red states.
CMS just released a letter last night indicating that it has new guidance and new desired boundaries for 1115 waivers that it will now approve. CMS is looking for more punitive waiver applications as well as indicating that it is willing to take Indiana HIP 2.0 HSA based Medicaid expansion to a national scale.
Deprioritizing etc — Really — your administration wants to cut $880 billion from Medicaid over a decade for upper income tax cuts so please cut the sanctimony.
Here is the work requirement.
The Obama Administration would not tie Medicaid to work requirements. Medicaid is a medical program. There are other work search and job training programs that are optimized as such.
This is a combination of splitting the poor into the deserving and non-deserving as well as an introduction of friction to decrease enrollment. Most people on expansion are either working, looking for work, in school or a primary care giver for dependents with significant needs. There are very few lazy lay-abouts. Instead these requirements create more hurdles that people have to jump, more hoops they have to shimmy through and more opportunities for their paperwork to be messed up. It aligns with the ritualistic humiliation of drug testing requirements for unemployment and TANF benefits. It is an assertion of power.
It won’t significantly reduce costs. The Kentucky 1115 application that was submitted last summer is good proof of that.
Cancer patients will make sure they have their paper work in. The twenty four year old who just finished up their associates degree and is waiting for benefits to get started at work is the one who is more likely to not complete the paper work. That person only went to their doctor once in the past year anyways. Work requirements and more importantly the paperwork to confirm participation and eligibility will drive away healthy and inexpensive.
Currently Medicaid allows states to retroactively pay significant bills for uncovered people if they are found to be eligible for Medicaid. This usually happens because hospitals and other providers are allowed to presumptively enroll individuals into a state Medicaid program if they have good reason to believe the patient who is otherwise uninsured is eligible for Medicaid. Hospitals like this because it significantly reduces their bad debt and charity care expenses. This is good for patients because it gets them the care that they need. And that looks like it will go away in some states.
The enthusiasm for HSA like accounts is predictable.
That is what Adminstrator’s Verma’s previous consulting business was built on. She designed the Indiana HIP 2.0 Medicaid Expansion with its system of HSA, wellness incentives and hoops to jump through. That model will now be encouraged to go national even as the evidence base for its success is thin..
So what are the distributional impacts?
For states that have already expanded Medicaid, these changes would make current beneficiaries significantly worse off.
It is more complicated for states that have not expanded Medicaid. If these changes (plus the fact that the President is not Obama) are the necessary and finally sufficient impetus to get the some hold-out states to expand Medicaid, then they are enrolling into a worse program then people in current Expansions but they are in a better position after a bad expansion than no expansion. I have a hard time saying that the working poor in Texas or Alabama or North Carolina should wait for a better program instead of getting needed care and needed financial stability now in a sub-optimal program design. I have pragmatic objectives that overwhelm ideological objectives.