A question on the minds of waiver watchers these days is whether the Obama Administration can, will, or should allow states to do a partial expansion of Medicaid to 100% of FPL for childless adults and parents who are newly eligible under the Affordable Care Act. Remember, Section 1115 demonstration waiver authority was created to further the objectives of the Medicaid program. As I blogged about a few months ago, it’s hard to imagine that covering fewer people than Congress had intended when it passed the Affordable Care Act would further Medicaid’s objectives. Longstanding federal policy also requires the consideration of the impact on the federal budget (i.e. “budget neutrality”).
This waiver request raises three key questions in my mind:
Could They?
Many legal experts argue that the federal government does not have the legal authority to authorize such a waiver for a variety of reasons that I won’t attempt to explain given my lack of a law degree.
Would They?
As I pointed out in a previous blog, allowing partial expansions would be an expensive proposition for the federal government — $3,000 a person according to the Congressional Budget Office (certainly not budget neutral).
Should They?
Individuals falling in between 100% to 133% of FPL that ended up in the Exchange rather than Medicaid would face higher premiums and cost-sharing, which would likely limit their access to needed care in some cases. (In these times of fiscal constraint, one would hope the federal government would opt for the most cost-effective and efficient option.)
The Supreme Court ruling opened the door to this discussion by making Medicaid coverage to newly eligible individuals a “de facto” state option. Some Governors have expressed interest in such a “partial expansion” to 100% of FPL because the ACA establishes tax credits to be used in the exchange for persons between 100-400% of FPL — although the law originally envisioned that the tax credits would be used primarily by those between 133% and 400% FPL and that states would extend their Medicaid coverage below those income levels. While this option provides individuals with lower quality coverage at a higher cost to both the individuals and the government, some Governors find it attractive as they would be able to shift the costs to the federal government if such a waiver were to be approved.
Arizona’s Waiver Request Contains Unique Features That May Limit It’s Applicability to Other States.
The state of Arizona is the first to submit such a request to the Center for Medicare and Medicaid Services – although its request has many unique aspects to it that may limit its applicability to other states.
With respect to the childless adults under poverty, in 2000, Arizona citizens passed a ballot initiative to extend coverage to adults under 100% of FPL. Currently an enrollment freeze exists for these individuals. Because the state already covered them (at least before the freeze!), Arizona is not eligible for the 100% match rate for the “newly eligible” but rather qualifies for what I like to call the “tweener” match for states that had already done some expansions on their own. “Tweener” because it falls between the 100% and the state’s current Medicaid match rate based on a formula included in the ACA. (Tweener states receive a phased-in increase in their match until it is consistent with the rate for newly-eligible adults in 2019.)
So, in an amendment to its current waiver, the state seeks to get this “tweener” match for childless adults under 100% FPL – though no promises are made to eliminate the enrollment freeze! Allowing the state to go forward and retain its ability to cap enrollment seems counter to the central goal of the ACA – universal coverage.
It is unclear when CMS will act on this request. Because the state submitted the request as an amendment to its current waiver, federal public process requirements do not apply. However CMS is currently taking public comments on the Arizona amendment on its Idea Factory. We will keep Say Ahh! Readers apprised of any developments!
