Medicaid Waivers Should Advance Health Care–not Undermine It

By Elizabeth Lower-Basch and Lena O’Rourke

At a time when President Trump and Congressional Republicans’ efforts to defund and weaken the successful federal-state partnership behind Medicaid through legislation have failed there is a real risk that the Administration will still seek to undermine the core goals and protections of Medicaid through administrative means including waivers that allow states to impose work requirements and premiums, or to reduce the core package of health care benefits. All those who came together and fought the deeply destructive Congressional proposals and saved Medicaid should also be prepared to fight back against these waivers, both through the official public comment process and through grassroots advocacy that draws attention to the damage that these waivers would do to Medicaid and its effectiveness in improving the lives and prospects of low-income children, families, adults, seniors, and disabled people.

The Medicaid program is administered by states, which operate their programs within federal guidelines. Medicaid is required to cover a comprehensive set of benefits that are specifically designed to meet the needs of low-income people, and all states have opted to cover additional benefits. Children enrolled in Medicaid are entitled to all the services they need to heal and maintain current health. And Medicaid protects low-income consumers from out-of-pocket medical expenses by capping the cost sharing they can be charged. States have long had the power to request “waivers” from the Centers for Medicare and Medicaid Services (CMS) to shape their Medicaid programs to address the needs of their beneficiaries and to advance the health of their people.

Now, however, U.S. Secretary of Health and Human Services Tom Price and CMS Administrator Seema Verma have indicated (in a joint letter to governors sent on March 14, 2017) that they would approve waivers that go far beyond the intent of the program and grant states new authority to cut and shift costs to beneficiaries. Such waivers could include many ideas that have been repeatedly proposed and debunked, such as testing the limits of essential health benefits or rolling back preventive health mandates for children.

The letter specifically mentions permitting states to impose cost-sharing, health savings accounts, eliminating non-emergency transport and work incentives that may function as requirements. In a recent speech, Secretary Price specifically suggested the welfare reforms of the 1990s as a model. Under the Aid to Families with Dependent Children (AFDC) waivers, which led to the replacement of AFDC with Temporary Assistance for Needy Families (TANF), parents receiving cash assistance were subjected to strict and narrowly defined work requirements as a condition of getting help, and entire families could be denied benefits if the parents failed to participate for enough hours in the specified activities. Moreover, these TANF requirements have, contrary to Secretary Price’s claim, largely been ineffective at promoting employment.

With this invitation, states are likely to test the limits of what they can do—at the direct cost of beneficiary access. The policies they are considering directly shift costs to beneficiaries, reduce benefits, and implement significant barriers to care. Studies of the Healthy Indiana waiver, which required Medicaid recipients to pay a premium or face disenrollment or lockout, have found that it deters enrollment, and about one-third of individuals who applied and were found eligible were not enrolled because they did not pay the premiumAs we explained when Congress was considering allowing work requirements in Medicaid, such requirements would limit access to health care, especially for the most vulnerable, and would make it harder for them to get healthy enough to work. A key finding from the Ohio report confirms that providing access to affordable health care helps people maintain employment. More than half of Ohio Medicaid expansion enrollees report that their health coverage has made it easier to continue working. Without the support of Medicaid, health concerns would threaten employment stability. Excluding them from care would reduce work, not increase it.

As the Price-Verma letter acknowledges, there are requirements for public notice and comment before a waiver can be approved. States must have at least a 30-day public comment period and include a comprehensive description of the waiver. Stakeholders will have the opportunity to weigh in during the comment period, and states must have a least two public hearings. The federal government must also provide a 30-day public comment period, and all documents must be posted on CLASP will work with our advocacy partners to highlight any proposed waivers that would weaken protections for the low-income people who receive health care through Medicaid, and to submit comments. Everyone who cares about access to health care should take advantage of these opportunities to formally weigh in on proposed waivers.

However, the letter also indicates that CMS is committed to “fast track” approval of waivers and demonstrations, including easier approval of approaches that have already received approval in another state, even when the results of the evaluations are not yet known. State waiver proposals and demonstrations are complex, and the impacts of the waivers will touch the health and lives of vulnerable populations in the state. Major policy changes with direct human impact should be given the consideration they deserve—not rushed through to meet an arbitrary deadline. Therefore, it will be important for advocates at the federal and state level to work together to raise the profile of harmful proposals and make sure that the public is aware of them and understands what they would mean to beneficiaries and health care providers, and holds policymakers accountable.

In addition, HHS’s authority does have legal limits. The clear intent of the Medicaid program is to provide health care to low-income individuals. And while HHS has authority to approve waivers, advocates should be ready to challenge any waivers that undermine Medicaid’s fundamental goals, including seeking legal action.

The fight to defend the Affordable Care Act was successful largely because it was not just health care advocates engaged. A broad coalition of advocates and practitioners who care about children, seniors, schools, nutrition, employment, and poverty, as well as state-level policymakers and the public at large rose up to say that the proposed cuts to health care, including Medicaid, were unacceptable. The next stage of this fight will be spread out across the states, and will require people to learn new approaches, such as commenting on waivers. But it is equally important, and still requires the efforts of this broad coalition.