Different strokes for different folks as the old adage goes. This saying, however, is particularly true when you look at the states that have chosen to expand their Medicaid programs under the Affordable Care Act (ACA) through waivers.
States do not have to seek a waiver from the federal government in order to expand their Medicaid programs under the ACA. However, if a state wants to implement the expansion in a way that does not comport with federal law, it must seek a waiver from the federal Centers for Medicare & Medicaid Services (CMS). Three states – Arkansas, Iowa and Michigan – have received approval from CMS to provide access to health care coverage through specifically-tailored, Medicaid expansion programs.
Review of these waivers provides insight into the availability of coverage for the mostly uninsured, poor and childless adult population. These waivers also provide an opportunity to observe and analyze additional issues for states, including utilization of health services, possible health outcomes, health care spending priorities and states’ values related to these issues. Insight on these issues will affect future policy, not only in the waiver states but across all states that are considering the needs of this population.
Before looking into the different waivers, it is worth noting that the expansion of Medicaid was intended to cover mostly low-income adults without dependent children who earn up to 138% of the federal poverty level ($15,856 for an individual). Since the U.S. Supreme Court’s ruling made the expansion of Medicaid optional for states, 25 states have chosen not to expand coverage. The vast majority of the states that have expanded, chose to provide to this population Medicaid benefits that look like the state’s traditional Medicaid program or a similar Medicaid benefit. In these states, you can predict service utilization because the benefit packages are the same.
The Arkansas, Iowa and Michigan waivers present fresh opportunities to consider how states provide services, effect positive outcomes and attempt to keep health care costs down. Notable similarities exist among the waivers. For example, cost-sharing, or requiring individuals to pay for a portion of the cost of service, is required in all three plans. The cost-sharing component is structured in accord with Medicaid laws that limit the percentage of income that can be required of an individual to pay out-of-pocket costs. The inclusion of cost-sharing requirements may be reflective of a desire for Medicaid expansion consumers to use mechanisms that are very common in commercial health insurance plans.
On the other hand, the waivers differ significantly where each state has perceived that individual choice may have some impact on health outcomes and the sustainability of Medicaid expansion. For example, Arkansas and Iowa will provide premium assistance for adults to enter the ACA-created, health insurance marketplace to purchase a qualified health plan instead of enrolling these individuals in the state’s Medicaid program. Arkansas will not require these individuals to pay any premiums in the health care marketplace, but in Iowa, individuals may have a premium obligation. Michigan will not offer premium assistance. Rather, the state will cover this population through its existing Medicaid managed care delivery system. Arkansas’ legislature recently approved the private option plan.
These innovations emerged out of a robust debate regarding state values and attitudes toward Medicaid expansion under the ACA. As we approach future milestones, it will be interesting to see which innovations will have the greatest impact on cost and quality.