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States Seek to Revamp, Not Expand Medicaid

May 6, 2019

A number of states under pressure to expand their Medicaid programs are instead finding opportunities to customize their programs through federal waivers.

According to Kaiser Family Foundation, as of April 1 the Centers for Medicare and Medicaid Services (CMS) had approved 47 Section 1115 Medicaid Demonstration Waivers across 39 states, including 10 states that have not expanded their Medicaid programs.  

Legislative fights over Medicaid expansion have been taking place in several states.  With Idaho voters having approved expansion in November 2018, the state is trying to limit eligibility to 100 percent of the poverty level. In Kansas, lawmakers are dealing with a new governor who supports expansion. As of mid-April, the fate of expansion rests with the state Senate.  Georgia, which has not expanded its Medicaid program, enacted the Patients First Act in February, giving the governor authority to study the state’s program and apply for waivers. Tennessee is seeking a work requirement, permission to explore low-income pools, and broadening managed care with seniors and people with disabilities in group settings.  

At the national level, the Trump administration is proposing to roll back expansion and convert Medicaid to a block grant system giving states more control over their programs. President Donald Trump’s budget for the 2020 fiscal year would cut $1.5 trillion from Medicaid over the next ten years. The budget also calls for strengthening work requirements for able-bodied people on Medicaid. 

Open to Innovation

Giving states more control to manage their programs opens the door for innovation, says Naomi Lopez Bauman, director of health care policy at the Goldwater Institute. Lopez coauthored the “Medicaid Waiver Toolkit” for the State Policy Network,which describes 20 reforms designed to improve delivery and control costs.

“Section 1115 waivers have been around for a long time, but it was not until recently that we have an administration more open to these innovation reforms,” Bauman said. “This is really the first time we’ve seen a willingness, an openness, and encouragement of states to innovate.”

Bauman says the federal government must make itself open to innovations, because Medicaid funding is rapidly becoming unaffordable.

“We have a ballooning budget and a ballooning deficit and Medicaid spending that is on autopilot, which is not sustainable,” said Bauman.

She says expansion is crowding out other spending in states. “We have a Medicaid program that is on automatic spending and it cannot be sustained,” said Bauman. Among the reforms she advocates are closing programs when they reach certain enrollment levels, enrollment audits, health savings accounts, time limits for enrollment, and a system of “skin in the game” measures where enrollees have to pay a modest premium.

Nicole Staley(nicole.staley24@gmail.comwrites from Pensacola, Florida.