Hard Work Pays Off for “Waiver Watchers”

By Wesley Prater

A number of states looking to save money in their Medicaid programs are asking the federal government for Section 1115 Research and Demonstration waivers  — in some cases asking for federal protection that preserve their coverage for children and families to be loosened.  However, recently three states – New Jersey, Texas, and Utah – pulled back on harmful provisions when submitting their waivers to the federal government because of strong advocacy work on behalf of low-income families.

The New Jersey Department of Human Services released a comprehensive waiver concept paper earlier this year detailing the changes that the state would make  if approved by the Centers for Medicare and Medicaid Services (CMS).  Chief among them was a substantial rollback of parent eligibility from 133% of the Federal Poverty Level (FPL) to mandatory coverage levels for parents at 28% of the FPL, making the Medicaid income eligibility limit for a parent in a family of three just $5,317, compared to the state’s current limit of $24,645.  It was estimated that 23,000 parents in New Jersey would be prevented from enrolling in Medicaid in the upcoming fiscal year as a result.  That means that a single parent with two children would not be able to make more than $103 per week and be eligible for Medicaid.  Approval by CMS would be necessary because the stability protections or “maintenance-of-effort requirements” in the Affordable Care Act prevent states from rolling back eligibility and enrollment procedures in Medicaid.  Additionally, the state was seeking a $25 co-payment for Medicaid patients that used the emergency room for non-emergencies.  Fortunately, advocates for low-income children and families fought against these aspects of the waiver and both were removed. 

In Texas, the Texas Health and Human Services Commission (HHSC) submitted Section 1115 waiver proposal to CMS primarily to expand their Medicaid managed care programs to more counties across the state and reform payment systems.  However, the proposal also included a limit of three prescription drugs (with certain drugs, such as insulin and drugs for contraception excluded) to adults that would have been set to begin in December 2011.  It seemed a bit misleading to say in one breath that reforming payment delivery in order to reward providers and reduce bad outcomes, while also saying in another breath that adults can only have three prescriptions per month.  Decisions on what medications a patient should take should be prescribed by doctors not by inflexible policies.  One can only imagine how this limit on prescription drugs would impact low-income individuals with cancer, AIDS, or mental illnesses.  Through more great advocacy work in Texas, HHSC announced that the three prescription drug limit would not be pursued as part of the state’s managed care waiver request.  It looks as if the other proposed changes in the waiver request will be granted according to a letter recently sent by CMS.

As discussed in an earlier Say Ahhh! blog, Utah has also submitted a waiver application to CMS to contain costs through payment system reforms.  The application originally asked to allow accountable care organizations (ACOs)–not state officials–to set co-payment amounts up to a maximum specified in the proposal and to pick and choose what co-payments to charge to children and others as “client incentives.”  Giving the ACOs this authority would be detrimental to low-income children in Medicaid since long-standing cost-sharing protections would be waived.  Plus, research has shown that cost-sharing for low-income families will often delay or reduce their use of needed care, leading to poor health outcomes.  Fortunately, advocates in Utah were successful in convincing the state to drop efforts to eliminate cost-sharing protections for children and pregnant women through the waiver. 

Section 1115 waiver processes are not as open as the legislative process and can be difficult terrain for advocacy organizations to navigate.  Hats off to the advocates and stakeholders in New Jersey, Texas, and Utah who overcame many barriers and showed us all how strong advocacy work can influence policy decisions, even on unfamiliar terrain during tough economic times.  And their work underscores how important it is to keep tabs on waiver requests your state may be pursuing.