Oregon’s 1115 Medicaid Waiver Request is a Mixed Bag

State seeks to become the first to provide continuous coverage to all children enrolled in Medicaid until age six while continuing to restrict children’s access to health care by continuing to deny them the EPSDT benefit package provided to children in all other states.  

After months of engaging stakeholders, Oregon has posted its draft application to extend, and amend, its “Oregon Health Plan (OHP)” section 1115 demonstration waiver for five years. The current demonstration is set to expire June 30, 2022, next year.

The renewal application includes new, innovative provisions aimed at expanding access to coverage and improving quality of care for Medicaid-eligible populations. One particularly groundbreaking group of policies includes requests to lengthen the normal 12-month continuous eligibility for children and adults; Oregon is the first state to propose this policy, which is the type of request that a Section 1115 waiver should be for. However, the proposal also contains several concerning provisions that threaten access to care and benefits including a continued waiver of the critically important EPSDT benefit package that is widely recognized as the definitive standard of care for children. (Oregon is the only state that waives EPSDT for children under 19).

The state’s application has a number of new requests and renewals of existing waiver policies. We detail some of the key elements impacting children and their families below.

Provisions promoting increased access and equity:

Continuous Eligibility for Children Through Their 6th Birthday. Oregon is seeking to provide continuous OHP coverage for all enrolled children until the end of the month of their sixth birthday. If approved, eligible children would receive coverage through their sixth birthday regardless of when they enrolled or experienced changes in circumstance that would otherwise affect their eligibility. This policy would increase access to primary and preventative health care for children as well as prevent disruptions in OHP coverage. Oregon is the first state to pursue approval for multi-year continuous eligibility for any eligibility group, which would provide a longer period of stable coverage for young children during a critical stage of development.

Continuous Eligibility for Individuals Ages 6 and Up. The state’s waiver application also proposes to provide two-year continuous eligibility for all Medicaid beneficiaries ages 6 and older. Children over age 6 and adults would be continuously enrolled in OHP coverage during the two-year period following any enrollment or redetermination, regardless of changes in circumstance. Continuous eligibility mitigates beneficiaries moving on and off Medicaid due to temporary income fluctuations and ensures more consistent access to care, among many other benefits. Only two other states have adopted continuous eligibility for adults (MT and NY), neither of which were for a two-year period, and Oregon the first state to seek to provide two years of continuous eligibility for any Medicaid population.

Investments in Health Equity and Social Determinants of Health (SDOH). One core goal underlying Oregon’s extension request is to advance health equity, aligning with the state’s vision to eliminate health inequities by 2030. Two of the proposals aimed at reducing health inequities are: (1) providing SDOH services to beneficiaries experiencing certain life transitions and (2) directing funding toward health equity investments and building a community-led infrastructure. To address transitional events that beneficiaries may experience, the state would provide health-related, housing, food assistance, and employment services and supports to eligible populations, to include individuals experiencing homeless, justice-involved populations, youth with special health care needs, and child welfare-involved youth. Additionally, the proposal would require the state’s coordinated care organizations (CCOs) to direct a portion of their budgets (3%) toward health equity investments, with almost a third of the directed health equity spending designated for new community-led entities, community investment collaboratives (CICs). Part of the CICs’ role would be to operate as an accountability structure for all health equity spending.

Provisions that restrict coverage and access to services:

Waiver of EPSDT Benefits. Oregon is seeking to continue waiving the requirement to provide the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) benefit to children over the age of 1 in its extension; it has waived this critical, comprehensive benefit since the inception of its OHP demonstration. EPSDT-related services are only provided if they are funded through the state’s prioritized list of health services, which determines the benefits covered by the state. Oregon is the only state to have a waiver of EPSDT for children under 19. Without EPSDT, children in the state are not guaranteed access to the comprehensive set of services that support healthy growth and development.

Waiver of Retroactive Coverage for MAGI Populations. The state is seeking to continue waiving  3-month retroactive coverage for almost all Medicaid beneficiaries including pregnant women, children, and foster care youth. The only exempt populations are those in the Aged, Blind, and Disabled eligibility groups. As a result, children and their families are all without financial protections for cost of care incurred in the three months prior to submitting a Medicaid application.

Closed Formulary and Exclusions on Certain Prescription Drugs. The state is requesting to waive a key beneficiary protection required under the Medicaid Drug Rebate Program.  Under the rebate program, states are required to cover nearly all FDA-approved drugs.  The waiver would allow the state to adopt a closed formulary for all adult enrollees (which may potentially include 19- and 20-year olds), covering only at least one drug per therapeutic class, with cost being one of the considerations for formulary placement. The waiver application also makes no mention of what appeals process would be available for beneficiaries seeking coverage of off-formulary drugs.  (This is even more restrictive than the closed formulary approved in Tennessee by the Trump administration, which was also highly problematic.)  For example, unlike Tennessee, Oregon does not provide any exceptions for six “protected” class drugs including immunosuppressants and anticonvulsants as required in Medicare Part D.) The proposal would also separately allow the state to exclude drugs, including but not limited to drugs approved under the FDA’s accelerated approval pathway, that the state determines to have “limited or inadequate” clinical efficacy as well as drugs that are deemed to have “no incremental clinical benefit” compared to others in its therapeutic class. The proposal does not spell out how the state would make these determinations. This provision would also apply to pediatric drugs, unlike the broader closed formulary. Both of these proposals would risk restricting beneficiary access to needed prescription drugs, which is especially concerning for those with chronic conditions or special health care needs.

We will have more on Oregon’s demonstration extension in the coming weeks and months. Our colleagues will have blogs exploring some of these proposals more in-depth and CCF will submit comments during the ongoing comment period. The state comment period is open from December 7, 2021, through January 7, 2022.