Section 1115 waivers give states the possibility to forgo key provisions of federal Medicaid law. The changes made possible by Section 1115 waivers are not as dramatic as those featured in the failed bills. For example, states cannot use 1115 waivers to fully restructure Medicaid under block grants or per capita caps, neither can the federal government use them to eliminate federal reimbursements for Medicaid expansion; however, they are still significant.
Under the President Trump's administration, CMS has authorized 1115 waivers that the former administration consistently rejected. Many states, for instance, have been allowed to make employment a condition for Medicaid enrollment. (The state of Kentucky; however, is presently in court proceedings over the new policy.).
Trump's administration is likewise allowing Kentucky to require beneficiaries to report income changes while Arkansas is disenrolling beneficiaries for the remainder of the calendar year if they do not comply with the work requirement.
The list below is what CMS has previously declined, as well as what is still under deliberations:
MEDICAID 1115 WAIVERS THAT HAVE BEEN REJECTED BY CMS
Lifetime limits
In May, CMS rejected an 1115 waiver application from Kansas to set up a three-year time limit for people enrolled in the Medicaid program.
Joan Alker, executive director of the Center for Children and Families at Georgetown University, said in a statement that she was "... pleasantly surprised by that."
Utah, Wisconsin and Arizona have also sent similar 1115 waiver applications to CMS for lifetime limits, which Alker anticipates will also get rejected.
In a statement by Seema Verma concerning Kentucky's attempt to sanction lifetime limits on Medicaid enrollees, she stated "We seek to create a pathway out of poverty, but we also understand that people's circumstances change, and we must ensure that our programs are sustainable and available to them when they need and qualify for them."
Partial expansion
CMS rejected Arkansas' bid to decrease the number of people who qualify for the state's Medicaid program. Arkansas was looking to reduce the eligibility requirement from 138 percent of the federal poverty to 100 percent; however, it was not a firm denial, rather, CMS stated it could not back the waiver application "at this time."
Whenever states vote to expand Medicaid the federal government pays 90 to 100 percent of the program's expenses. If Arkansas were permitted to simply cover people up to 100 percent of poverty, the formerly enrolled members who lose their Medicaid coverage would be eligible for federal health insurance subsidies. This would shift the liability to pay healthcare expenses from the state to the federal government. This scenario is most likely not attractive to the Trump administration.
OTHER 1115 WAIVERS CURRENTLY PENDING
Work requirements for non-expansion states
Besides the denial of permitting lifetime limits on Medicaid enrollees, an additional component of Kansas' 1115 waiver application is still pending; namely, a work requirement. But unlike Arkansas, Indiana and Kentucky, Kansas didn't expand Medicaid by way of the Affordable Care Act (ACA); so demanding individuals to maintain an employment (minimally 80-hours per week) would most likely exclude them for the state's Medicaid program since they would be making too much money.
Oklahoma, Alabama, South Dakota and Mississippi are other states that didn't expand under the ACA exploring work requirements. The Center on Budget and Policy Priorities issued a report that highlights the catch-22 of these proposals.
In the state of Mississippi, for example, a single parent can not earn over $370 per month to receive Medicaid. Nonetheless, if they acquired 20-hour per week employment at minimum wage, they would earn $580 a month, which is too much income to qualify for Medicaid.
"They will be complying with the work requirement but still lose coverage. You're in this situation that can't be fixed," says Jessica Schubel, a senior policy analyst for the Center on Budget and Policy Priorities.
CMS' Verma has stated that she is concerned about this "subsidy cliff" and wants to find a "pragmatic and empathetic" approach to work requirements and other new Medicaid initiatives.
Drug testing for Medicaid enrollment
Finally, last year Wisconsin was the first state to ask for authorization to drug test Medicaid applicants allowing the denial of enrollment if they test positive. Specialists say that there is no way to tell where the federal government will decide the issue. Having said that, CMS has indicated that they would advocate the use of Medicaid funds to cover neonatal abstinence syndrome (a withdrawal ailment that takes place when an infant is born with an opioid addiction from their mother's use during pregnancy). Medicaid experts say it is hypocritical for the federal government to cover babies with drug-related problems but not their parents.
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