State 1115 Proposals to Reduce Medicaid Eligibility: Assessing Their Scope and Projected Impact

By Sara Rosenbaum, Vikki Wachino, Rachel Gunsalus, Maria Velasquez and Shyloe Jones
The Commonwealth Fund, January 11, 2018

In a marked contrast to the Clinton, Bush, and Obama administrations, which encouraged states to use Section 1115 demonstrations to expand Medicaid coverage for low-income adults, the Trump administration has signaled its desire to move in the opposite direction by using 1115 — which allows the U.S. Department of Health and Human Services (HHS) and states to test innovations in Medicaid and other public welfare programs without formal legislative action — to shrink eligibility and enrollment, in expansion and nonexpansion states alike. Guidance released today by the Centers for Medicare and Medicaid Services could speed up the approval of such demonstrations.

The administration likely will integrate 1115 Medicaid eligibility reduction demonstrations as part of its anticipated initiative to reduce the scope of means-tested public assistance.

Ten States with Pending Medicaid Section 1115 Waiver Applications

Arizona: Work requirement; additional eligibility redeterminations; five-year lifetime limit on coverage

Arkansas: Work requirement; elimination of retroactive eligibility

Indiana: Six-month lockout for failure to provide necessary information at reenrollment; work requirement; increased premiums

Kansas: Work requirement; three-year lifetime time limit on coverage

Kentucky: Enforceable premiums accompanied by lockout; elimination of retroactive eligibility; and a work requirement

Maine: Work requirement; reintroduction of an asset test; elimination of retroactive eligibility; and elimination of hospital presumptive eligibility (that is, temporary eligibility while a full application is being considered)

Mississippi: Work requirement

New Hampshire:  Work requirement

Utah: Work requirement; enrollment caps; five-year lifetime limit on coverage; removing presumptive eligibility

Wisconsin:  Denying eligibility for premium nonpayment; a 48-month time limit (with the ability to gain additional coverage time by working); and behavioral modification requirements

These proposals raise significant questions, such as whether a proposal that lacks impact estimates or that claims to have no impact satisfies 1115 requirements. Federal regulations governing 1115 demonstrations would seem to say no. Another, perhaps deeper, question is whether proposals that purport to impose criteria that will result either in the loss of health insurance or the future denial of benefits even fall within the scope of authority 1115 confers on the HHS Secretary. The purpose of 1115 is to enable the Secretary to undertake demonstrations that promote the objectives of programs that are the subject of the demonstration. In the case of Medicaid, its objective, as stated in law, is to furnish medical assistance to people who need it. In any demonstration, it is likely that potential gains are weighed against risks. In these pending demonstrations, however, the scale appears lopsided, with only downsides for the poor. How, exactly, do proposals to deny or end health insurance advance Medicaid’s basic program objective? While achieving greater efficiencies are laudable and necessary aims of any program, especially one as large as Medicaid, simply culling the rolls of needy residents should not be confused with efficiency; indeed, such a result runs counter to the program’s most basic purpose of providing care to those who need it.…


You’re Sick. Whose Fault Is That?

By Dhruv Khullar
The New York Times, January 10, 2018

The idea that Americans should take personal responsibility for their health has recently received renewed attention. Vice President Mike Pence has argued for “bringing freedom and individual responsibility back to American health care.”

Mick Mulvaney, director of the Office of Management and Budget, expressed a more punitive view, saying, “That doesn’t mean we should take care of the person who sits at home, eats poorly, and gets diabetes.”

What does it actually mean to take personal responsibility for health?

The basic idea is that if we adopt healthful lifestyles, are compliant patients and save money for our own medical care, we’ll feel better, spend less and reduce our burden on others.

Medicaid reform is the policy context in which personal responsibility is most frequently discussed.

Seema Verma, administrator of the Centers for Medicare and Medicaid Services, previously helped shape Indiana’s Medicaid expansion. To get full benefits in Indiana, patients must contribute monthly to a “personal wellness and responsibility account.” If they fail to pay, they may have benefits cut or lose coverage entirely for six months.

Personal responsibility is not always demanded equally of people at every income level. Many lawmakers want more “skin in the game” for Medicaid recipients, but not as many clamor for higher deductibles for wealthy Americans — even though they’re more likely to have enough “skin” to meaningfully play “the game.”

Personal responsibility is an attractive goal with deep roots in American culture. But if it’s too aggressively pursued, it may conflict with another worthy ideal: In a nation as wealthy as the United States, sick humans deserve health care — even if they can’t pay, and even if they’ve made some bad choices.…

Medicaid is a program designed to help low-income individuals obtain the health care that they need. Section 1115 waivers are a process established to allow states to facilitate the goal of furnishing medical assistance to people who need it (the purpose as stated in law). Yet the current administration is encouraging the use of the waivers to shrink eligibility and enrollment – taking health care away from those in need – the exact opposite of the intent and letter of the law.

Representatives of the administration cloak this in terms of encouraging personal responsibility for one’s own health. Taking away an individual’s health benefits is not a policy that improves health; it impairs it.

Nobody is going to argue that an individual should not be expected to take care of his own health. But the role of society should be to encourage good health through educational efforts and appropriate social programs. One of the most important programs is the provision of health care which should be rendered regardless of ability to pay, even for those individuals who may have made some bad choices (as have we all).

If a person does not complete his lessons in a school class does that mean that he should be deprived of any further education? If a person receives a speeding ticket, does that mean that she should be denied access to our nation’s highways? If person has a grease fire flare up on her stove does that mean that fire protection services should be denied in the future? If a person was unable to contribute to an IRA, does that mean that future Social Security benefits should be denied? If a person ran over their municipal water allotment does that mean that their water services should be cut off permanently? If a person under 65 is unable to find a job does that mean that she should she be denied health care? Of course not to all of these.

Where personal responsibility does lie is with our public stewards and their obligation to make our public programs work for the people. Now there we can be justly critical of their failure to fulfill their own personal responsibility while serving in their stewardship. Should we take way their health care? (No, just fire them.)

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