Dangerous Medicaid waivers likely to be approved under Trump administration

What's Medicaid with premiums and work requirements? Private Insurance.

Administrator of the Centers for Medicare and Medicaid Services Seema Verma listens at right as President Donald Trump speaks during a meeting on women in healthcare, Wednesday, March 22, 2017, in the Roosevelt Room of the White House in Washington. (AP Photo/Evan Vucci)
Administrator of the Centers for Medicare and Medicaid Services Seema Verma listens at right as President Donald Trump speaks during a meeting on women in healthcare, Wednesday, March 22, 2017, in the Roosevelt Room of the White House in Washington. (AP Photo/Evan Vucci)

A philosophical change is underway for the decades-old Medicaid program, which provides health coverage for over 68 million people, including children, pregnant persons, seniors, modest income-earners, and those living with disabilities.

The Centers for Medicare and Medicaid Services (CMS), a division within the Department of Health and Human Services (HHS), released new criteria Tuesday outlining how it will judge state applications that look to innovate the 1965 insurance program. Notably omitted from the newly unveiled plan: “expanding eligibility.” Veering away from the Obama administration’s goal to extend coverage, the Trump administration is seemingly prioritizing overall efficiency and personal responsibility among enrollees instead.

This marks a “new chapter” for the program, CMS administrator Seema Verma explained on Tuesday while unveiling her vision at the National Association of Medicaid Directors fall conference. “We will not just accept the hollow victory of numbers covered, but will dig deeper and demand more of ourselves and of you,” Verma said.

Under the new criteria, CMS will now accept applications it has historically rejected, such as those that impose work requirements on Medicaid beneficiaries.

The changes have prompted outcry from health care advocates.

“New CMS Medicaid waiver criteria is thinly veiled rhetoric to pave the way for approvals of state policies that will cause loss of coverage,” Joan Alker, executive director of Georgetown University Center for Children and Families, tweeted on Tuesday.

Medicaid is a joint program: the federal government sets the policy parameters and the states implement it according to their respective needs. For every dollar a state spends on the program, the federal government must at least match it.

From there, it gets a bit complicated. States have some flexibility to change the program, and they do this by applying for Section 1115 waivers.

Previously, the Obama administration denied 1115 waivers it said would undermine access to affordable insurance. CMS, for instance, denied Ohio’s waiver application in September 2016, after the state attempted to raise premiums on Medicaid beneficiaries following a traditional Medicaid expansion two years earlier. It was clear from the outset that the Obama administration would reject the waiver given its policy.

Waiver benchmark as of Nov. 1, 2017Credit: Screen-capture
Waiver benchmark as of Nov. 1, 2017
Credit: Screen-capture

However, the new criteria posted on the CMS website hopes to align Medicaid with private insurance — more importantly, its implementation marks a not-so-secret victory for Verma, whose health care consulting firm, SVC Inc., actually designed Ohio’s rejected Medicaid 1115 waiver. Under Verma’s leadership, rejected applications like the one her company previously crafted for Ohio could be — and likely will be — approved: on Tuesday, Verma said CMS would approve proposals that promote “community engagement”, a cloaked reference to work requirements.

Verma’s Medicaid objective has been met with pushback. Jennifer Ryan, who worked at CMS between 2009-2014 and is now vice president at Harbage Consulting, told ThinkProgress that imposing premiums or work requirements went against the statute outlined in the Title XIX of The Social Security Act, which created Medicaid. The law does not tether Medicaid eligibility to employment but to income, she said.

“My understanding is changing language on the website does not give you new legal authority,” said Ryan.  

Jack Comart, litigation director of Maine Equal Justice Partners — a group dedicated to improving the lives of low-income people — told ThinkProgress that his group would immediately file a lawsuit once CMS approves a waiver the state submitted over the summer. The waiver would impose work requirements and premiums to some enrollees.

Maine is looking to expand Medicaid eligibility. Voters get to decide Tuesday if 89,473 people get to gain Medicaid coverage. State officials could subsequently apply the work provisions to the Medicaid expansion group.

“Expanding Medicaid will increase access,” Comart said, noting, “If the waiver ends up being implemented, still better off than with no expansion.”

Several states in addition to Maine have have submitted waiver proposals to CMS that would impose requirements, including Arizona, Indiana, Kentucky, New Hampshire, Utah, and Wisconsin. There are other waivers before CMS that align with Verma’s overall goal for Medicaid, imposing premiums (Indiana, Kentucky, Maine, Wisconsin), imposing time limits on those enrolled (Maine, Utah, Wisconsin), and implementing coverage lockouts for those who don’t submit their paperwork on time (Indiana, Kentucky).

A CMS official told Kaiser Health News that it would likely approve pending waivers before the end of the year. Already, Kentucky’s State Medicaid Director said the state plans to implement the working requirement in July once the application is accepted.

More than half of nondisabled adults on Medicaid are already working, according to the Kaiser Family Foundation. The rest are at risk of losing coverage.

Imposing extra obstacles like work requirements and premiums is just not “realistic”, Ryan said, adding that most of those individuals live below the poverty level.

This article has been updated to further contextualize Jennifer Ryan’s quotes.