New Year: Medicaid Waiver Fights Continue

By Elizabeth Lower-Basch and Lena O’Rourke

In 2019, a handful of states—encouraged by the Trump Administration’s words and actions—tested what ideological policies could be advanced through Medicaid waivers. Thanks to the vigilance of state and national advocates, the waiver battles have been hard fought, and the most damaging proposals haven’t yet been implemented. Advocates and members of the general public submitted comments at the state and national level providing loud opposition to the damaging policies in these waivers. These extensive comments have helped draw public attention to the issues and contributed to the legal arguments against the waivers.

We anticipate 2020 will be another busy year for Medicaid waivers. States submitted several dangerous proposals to the Center for Medicare and Medicaid Services (CMS) at the end of last year, and we’re awaiting the outcomes. Other bad waivers are scheduled to take effect in the coming months.

Here are some of the big things we’re watching in 2020:

Work reporting requirements remain in limbo

The Trump Administration has continued to encourage states to impose work reporting requirements as a condition of eligibility for Medicaid and to authorize such waivers. In 2019, multiple states were approved to implement work reporting requirements in Medicaid. However, as of the end of the year, none of these were being implemented.

Work reporting requirements in Kentucky, Arkansas, and New Hampshire were all blocked by litigation. As a result, Indiana also announced it would delay its implementation of work reporting requirements until the legal issues were settled. And, after the November 2019 elections, the newly elected Kentucky Governor, Andy Beshear, sent a letter to CMS ending its Medicaid work requirement. This tremendous policy win was the result of years of comment writing, advocacy, litigation and, of course, the election. Similarly, Virginia Governor Ralph Northam has asked CMS to stop reviewing its waiver request, and the new legislature is expected to overturn the legislation requiring it.

However, as of January 1, Michigan is beginning to implement its work requirement, even though Governor Gretchen Whitmer recognizes the problems this policy will cause. Despite these problems, her administration is moving forward with implementation because the state passed legislation under the previous administration that would undo Medicaid expansion if the work requirements were not implemented.

CMS also continues to approve even more radical waiver requests. For instance, CMS authorized Utah’s work reporting requirement, which is more stringent than the others that have been approved—for example, beneficiaries who are unemployed must document that they have applied for 48 jobs.

More alarmingly, late last year, South Carolina became the first state to receive approval to apply work requirements in a non-expansion state. As the state’s Medicaid eligibility for childless adults is extremely low, this work requirement will apply almost exclusively to parents with children in the homes, putting both parents and their children at risk of losing health insurance. Georgia is also applying for an 1115 waiver that is very similar to South Carolina: it would expand Medicaid to 100 percent of the Federal Poverty Line but also make meeting the work requirements a condition of eligibility. In other words, to enroll in Medicaid, an individual must already have met the conditions of the work requirement. (By contrast, the other waivers allow applicants a period of eligibility before they must comply.)

Medicaid block grants may be approved

In a speech before the National Association of Medicaid Directors in late 2019, CMS Administrator Seema Verma continued to signal the administration’s interest in approving block grant waivers for Medicaid. News reports suggest that the administration will release guidance on state Medicaid block grants as soon as this month. Under a block grant, states receive a fixed allotment of federal funds in return for increased flexibility in the use of funds. However, under a block grant, when health care spending exceeds the federal allotment for any reason, such as a recession, a new epidemic, or the adoption of a new effective treatment, the state will be forced to increase its own spending or cut provider payments, eliminate certain benefits, or reduce enrollment in Medicaid. The lesson of other block grant programs is that there is no way to avoid these harsh tradeoffs.

In late 2019, Tennessee became the first state to apply for a waiver to block grant their Medicaid program, dramatically transforming the relationship between the state and the federal government—and putting people’s health care at risk. CMS is still reviewing Tennessee’s waiver request.

Medicaid is more popular than ever

While the Trump Administration and some states continue trying to undermine Medicaid, it is important to note that Medicaid is more popular than ever. Utah and Idaho both adopted Medicaid expansion as of January 1, 2020. Expansion is also being considered in Kansas, while both South Carolina and Georgia are partially expanding coverage for parents, although not childless adults.

Over the next year, even as America debates what the health care system of the future will look like, all of us who care about access to health care for people with low incomes must continue our advocacy on Medicaid waivers. These waivers push beyond the limits of the Medicaid program and will cause real harm to people who rely on Medicaid for their health insurance.