Thursday, July 12, 2012

Medicaid Waiver: Obamacare or Affordable Care Act: Medicaid Spends Less/ Person than Private Insurance but Waivers Must Be 'Budget Neutral'

">Medicaid is sometimes described as a complex program that is difficult for potentially eligible people, health care providers, as well as policymakers, to understand.  Waivers could be used to make the program less complicated and easier to enroll in and administer, but a number of recent have made the program more complex...... Medicaid played an important role during the most recent economic downturn by offsetting much of the decline in employer-basedcoverage and keeping millions of people (mostly children) from becoming uninsured.......experience with recent waivers shows that increased programmatic flexibility may not be thesolution for addressing state fiscal problems while maintaining access to needed care." NOTE: There is no information in the above Kaiser publication re: any Medicaid Waiver activity as associated with NC.It was published in 2005.

It would take a policy wonk to understand all of this but here goes. This Medicaid Waiver matter is ALL related to the expansion of Obamacare in 2014. As more and more people go onto Medicaid rosters, Medicaid Waivers become more and more likely.

Key words include 'neutrality' (it does not cost the Fed government more to implement the waiver than it would to not implement it). Or as more clearly stated in the below, " It limits a state’s 
access to open-ended federal financing, putting the state at risk for costs that exceed the cap
and creating the potential for the state to experience additional fiscal stress over time.  ..."

From the Kaiser Foundation, as recommended by the Philly attny familiar w/ Medicaid Waivers, mentioned in a previous Defarge post:

Here is a excellent overview of Medicaid Waivers:


Medicaid finances health coverage for low-income families and elderly and disabled people.
Often poorer and sicker than the privately insured, Medicaid enrollees rely on the program for
preventive, medical, and long-term care services.  The federal government and the states jointly
fund Medicaid, with the federal government paying 50% to 77% of the costs, depending on the
state.  States administer the program guided by a combination of federal standards and state
options that qualify them to receive federal matching funds.

Section 1115 waivers give states federal approval to alter the way they provide coverage and/or
deliver services to the low-income population outside of the federal standards and options and
still receive federal matching funds.  That is, they allow states to use federal Medicaid funds in
ways not otherwise allowed under federal law.  States have used waivers to test and try a variety
of changes affecting program coverage and costs throughout the 40-year history of the Medicaid
program.  For example, in the mid-1990’s a number of states relied on waivers to require
beneficiaries to enroll in managed care, a service delivery option that later became available to
states without a waiver.  Tennessee, Oregon, New York and others used waivers to significantly
expand coverage to new groups, using managed care savings or redirected Disproportionate
Share Hospital (DSH) funds to meet budget neutrality requirements of the federal government.

Waivers have been used in good and bad economic times both to try new ways to provide
coverage for the low-income population as well as to try alternative approaches to contain costs.
Over the past few years, as states have faced significant budget shortfalls and increasingly
difficult fiscal situations, new federal waiver guidelines offered states increased programmatic
flexibility through waivers and new financing mechanisms to meet budget neutrality
requirements.  This combination of severe fiscal pressure on states and increased flexibility has
led to a new round of waiver activity.  Recent waiver activity has focused on reducing coverage
to relieve state fiscal pressures....."


How are states currently using Section 1115 Medicaid demonstration waivers?
 States have used waivers for many purposes, including to expand coverage, change delivery
systems, alter benefits and cost-sharing, modify provider payments, and quickly extend coverage
during an emergency.
 Currently, 30 states and the District of Columbia operate one or more comprehensive Section 1115
Medicaid waivers that involved an estimated $54.6 billion in federal outlays in 2011. These waivers
generally fall into several categories, including waivers to implement managed care, to expand
coverage with limited benefits, to restructure federal financing, and to expand coverage to lowincome adults in preparation for the Medicaid expansion in 2014.

How does the Affordable Care Act (ACA) impact Section 1115 waivers?
 The ACA does not change the key provisions of Section 1115, but IT DOES REQUIRE NEW REGULATIONS TO INCREASE THE TRANSPARENCY (caprs are mine)of the approval process and creates new waiver authorities.  Since the passage of the ACA, several states have obtained Section 1115 waivers to expand coverage to low-income adults in preparation for the coverage expansions under reform. Other states haveexpressed interest in pursuing waivers focused on reducing costs to address budget shortfalls.


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