We’re getting to the end of the year and a seasonal tradition for Medicaid Section 1115 waiver watchers is observing an uptick in waiver activity by the federal Centers for Medicare and Medicaid Services (CMS). Last Friday, CMS issued a temporary one-year extension (in place until December 31, 2024) for Wisconsin’s BadgerCare Section 1115 demonstration – a longstanding waiver which, among other things, authorizes Wisconsin’s fiscally dubious “partial expansion” extending coverage only to a subset of those who would be eligible under the full ACA Medicaid expansion – those with incomes below the poverty line.
CMS is backlogged and often turns to temporary extensions to give themselves more time to negotiate complex Medicaid waiver agreements — as they did in the case of Wisconsin. Some issues, however, may be resolved in which case CMS may address them in the extension letter. And that is exactly what happened last Friday – CMS was very clear that it will not approve the state’s request to charge premiums to adults covered by the demonstration. (Thus, the premium authority will expire without renewal on December 31, 2023.) Specifically, the letter states that the agency “has determined that premiums can present a barrier to coverage, and therefore charging beneficiaries premiums beyond those specifically permitted under the Medicaid statute are not likely to promote the objectives of Medicaid.”
This language is important because as SayAhhh! readers who followed the Medicaid work requirements debate closely will recall, promoting the objectives of Medicaid is required by the statute for a Secretary to approve Medicaid waiver demonstrations — which was reiterated by multiple federal court decisions.
These premiums and related harmful policies (such as a six-month lockout for nonpayment of premiums and denial of eligibility for not filling out a health risk assessment form) were part of state statutory changes enacted in the 2015-2017 biennial budget (the history of BadgerCare is described in the request see p. 7). Governor Evers is required by state statute to request federal approval, although he has made clear that he does not support them. The premiums and related policies had not yet been implemented due to the continuous coverage protections in Medicaid enacted for the duration of the public health emergency. The premium changes were slated to go into effect in January 2024, necessitating CMS action.
CMS drew this line and said no to premiums in December 2021 in three different state waiver contexts (AR, GA, MT) as I blogged about here. That was the right decision then, and it is the right decision now. Research has shown repeatedly that premiums for low-income people are barriers to coverage, and much of this work has come from evaluations of Section 1115 waivers. As researchers at KFF wrote:
While specific premium policies vary across states that have Section 1115 approval for premium requirements, available data and evaluations from five states that have implemented these requirements show that high numbers of enrollees fail to pay premiums, face consequences for nonpayment, and experience confusion over premium policies.
CMS provides sound and clear arguments in the Wisconsin extension solidifying its policy decision that premiums will not be considered approvable in Section 1115 requests. State policymakers should read the fine print and not waste anyone’s time and money by pursuing premiums in upcoming state legislative sessions.