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Short Analysis
December 2015

State Medicaid Expansion Waivers

UPDATE: On 12/17 CMS approved Michigan’s 1115 waiver amendment to the Healthy Michigan Program. The program will continue as it is currently with significant changes to the delivery system, cost-sharing structure and healthy behaviors protocols slated to take effect April, 2018.

New tool: Our interactive map shows the status of state waivers across the country.

As part of their Medicaid expansion programs, states can ask the Centers for Medicare and Medicaid Services (CMS) to waive certain Medicaid requirements. These requests are made through 1115 demonstration waivers.

Currently, 6 states are implementing expansion through a demonstration waiver and a seventh will be submitting a waiver for approval. Two other states are actively debating an expansion that will require a waiver.

And, as the remaining states expand Medicaid, it’s likely that they will also seek waivers. Because states tend to draw from other Medicaid programs, it’s important to understand how each state is handling waivers. Policymakers and advocates can help shape how a Medicaid expansion waiver is fashioned—from influencing the underlying legislation that is the basis for the expansion program to commenting on the waiver application itself.

We outline the components of each state’s Medicaid expansion waiver program, as well as the status of which waivers have been approved or requested by CMS (see table). Our interactive map provides a snapshot of the status of expansion efforts across all states. We’ll be updating this information as CMS makes determinations on additional waiver requests, so visit this page for developments.

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State Waivers to Expand Medicaid
Delivery system for expansion enrollees
Approved Requested but not approved

Requiring Medicaid expansion enrollees to get coverage through a choice of at least 2 private marketplace plans, also known as the “private option.”
Approved for: AR, IA, NH

AR: Approved for all expansion enrollees
NH: Approved for all exansion enrollees
IA: Approved for expansion enrollees with incomes above 100% of poverty. Currently not an option for enrollees because there is only one plan available. 

In all states, medically frail are not required to join marketplace plans.

State contracts with managed care plans to provide coverage; plans must meet federal Medicaid standards
Approved for: MI, PA, IN

State contracts with a “third party administrator” for claims processing, provider networks and other administrative functions in a managed fee-for-service structure.
Approved for: MT

Placing expansion enrollees into managed care plans that do not explicitly meet federal Medicaid standards.
Requested by: PA

Approved Requested but not approved

The ability to charge some expansion enrollees premiums.
Approved for: IA, MI, PA, IN, AR, MT

Individuals do not have to pay premiums until 6 months to one year after enrollment.
Approved for: IA, MI

The ability to require individuals to pay premiums before enrolling. Individuals below 100% to FPL may choose to wait 60 days and then be enrolled in a premium-free basic benefit plan.
Approved for: IN

Allowing all cost sharing, including premiums, that does not exceed 5% of income calculaed by monthly/quarterly income (in all programs).
Approved for: AR, IA, MI, PA, IN

Note: Enrollees who have to pay premiums do not have any other cost sharing except for non-emergency use of the ER.
Approved for: AR, IA, IN, PA

Authority to change program structure in year 2 in order to charge lower income enrollees premiums without going through the 1115 amendment and approval process.
Requested by: PA

Enrollees with incomes above 100% FPL (101%- 138%)
Approved Requested but not approved

For enrollees with incomes of 101-138% FPL, charging them premiums of up to 2% of income (same as marketplace premiums for this population).
Approved for: AR, IN, MI, PA, MT

The ability to charge individuals in this group premiums of $10/month.
Approved for: IA

The ability to charge individuals in this group premiums between $10 and $25 per month depending on income.
Approved for: AR

Non-payment penalties allowed—see Enrollees with incomes at and below 100% FPL

Premiums exceeding 2% of income for individuals with incomes over FPL.
Requested by: IA, IN, PA

Enrollees with incomes at and below 100% FPL
Approved Requested but not approved

Charging premiums at $5/month for individuals with incomes of 50-100% FPL (approximately 1% of income for an individual at 50% FPL). No penalty for non-payment.
Approved for: IA, AR

Charging premiums at 2% of income for individuals with incomes over 50% FPL. 
Approved for:  MT

Giving individuals below poverty the choice of an enhanced benefit package with premiums of 2% of income or $1, (whichever is larger), or a basic benefit package with no premiums and Medicaid-level co-pays.

Approved for: IN

Premiums at 3% of income for enrollees 50-100% FPL.
Requested by: IA

Premiums greater than 2% of income for people from 0%-100% FPL.
Requeseted by: IN

Penalty for non-payment of premiums
Approved Requested but not approved

Allowing disenrollment for individuals with incomes of 101-138% FPL with 90-day grace period. Individuals, however, must be able to immediately re-enroll.
Approved for: IA, PA

Allowing disenrollment for individuals with incomes of 101-138% FPL with 90-day grace period. Individuals may re-enroll upon payment of back premiums. 

Allowing disenrollment for individuals with incomes of 101-138% FPL with a 60-day grace period followed by a 6 month lock-out period
Approved for: IN

Allowing individuals below poverty to be moved from an enhanced benefit package with vision and dental coverage to a basic benefit package for non-payment of premiums.
Approved for: IN

State may consider unpaid premiums or coinsurance a collectable debt.
Approved for: AR, IA, MI, PA, MT

Non-payment grace period.
Requested by: IA

Disenrollment for non-payment with lock-out periods.
Requested by:

Disenrollment penalties for individuals with incomes below FPL.
Requested by:

Cost-sharing (that is different from what is allowed under Medicaid rules)
Approved Requested but not approved

Pre-paid cost-sharing placed in individual accounts. No cost-sharing for the first 6 months. Starting in month 7, enrollee has monthly pre-paid cost sharing, based on pro-rated cost-sharing experience of the first 6 months. Thereafter, enrollees’ monthly cost-sharing payments are adjusted quarterly, based on the prior quarter’s service use. Enrollees receive account statements, but funds do not accumulate in accounts. Cost-sharing payments are disbursed to providers.
Approved for: MI

Monthly premiums based on income paid into individual accounts. Accounts are fully funded by the state and premium contributions and used to pay co-pays at point of service, unless enrollee fails to pay premiums. If an individual fails to pay the montly premium, they must pay out-of-pocket for Medicaid level co-pays at point of service.
Approved for: AR

Montly premiums based on income are paid into individual accounts. Non profits and employers may pay premium contributions on behalf of an individual. Account funds will be used to pay for the first $2,500 in claims; claims beyond the initial $2,500 will be fully covered by Medicaid managed care. Acconts are fully funded by the state and premium contributions.
Approved for: IN

2-year demonstration allowing cost sharing for non-emergency use of the ER exceeding Medicaid rules for a test group of enrollees. $8 first non-emergent use and $25 for the second.
Approved for: IN

For more detail on Indiana, Arkansas, and Michigan's cost sharing structure, see Health savings account-like features.

Cost-sharing percentage calculated on an annual rather than quarterly or monthly basis.
Requested by: IA

Cost-sharing for non-emergency use of the ER that exceeds what is allowed under Medicaid rules (Medicaid rules allow for $8 cost-sharing). States requesting this were approved to charge the standard Medicaid cost-sharing, but nothing more.
Requested by: IA, PA

Wraparound benefits
Approved Requested but not approved

One-year waiver exempting state from paying for enrollees’ non-emergency transportation. Medically frail enrollees are still provided non-emergency transportation.
Approved for: IA (with a one-year extension), PA, IN

Waiver of all wraparound benefits.
Requested by: PA

No wraparound benefits for individuals enrolled in marketplace plans (incomes above 100% FPL). 
Requested by: IA

Waiver EPSDT for 19 and 20 year-olds.
Requested by: IA, IN

Three-month retroactive coverage
Approved Requested but not approved

Waiver of 3-month retroactive coverage.
Approved for: IN

State may request waiver from being required to provide retroactive coverage in year two, and from having to provide data on application processing times and gaps in service
Approved for: PA

Waiver of 3-month retroactive coverage.
Requested by: IA, PA

Wellness programs
Approved Requested but not approved

Allowing state to use wellness plans with premium costs, penalties, and/or cost-sharing amounts waived or reduced for enrollees who complete wellness program requirements.
Approved for: IA, IN, MI, PA, MT

Health savings account-like features
Approved Requested but not approved

Enrollee premiums and cost-sharing payments are placed into individual health accounts. Cost-sharing is distributed to providers. However, premiums accumulate in accounts and are used to offset the costs of care. Health plans provide coverage before drawing on enrollee accounts. Once these accounts are empty, the plan covers all services. Enrollees are never denied care. Unused individual payments roll over to the next year. If an enrollee is no longer eligible for the demonstration, unused payments are returned to the enrollee or used to purchase other coverage. Entities such as employers and nonprofits may also contribute to accounts.
Approved for: MI

Individuals above 50% FPL make montly contributions based on income into "Independence" Health Savings Accounts. Independence Accounts are used to pay co-pays at the point of service. Medicaid fully funds account if co-pay costs exceed account balance. If individuals make 6 months of consecutive contributions, they receive a cash credit that may be used for future premium bills.
Approved for: AR

All income level enrollees have the option to make payments into POWER accounts with contributions equaling 2% of income or $1, whichever is greater. POWER accounts are fully funded by premium payments and Medicaid, and used to pay for the first $2,500 in claims. Individuals who use POWER accounts have access to HIP Plus, a more generous benefit package including vision and dental services.
Approved for: IN

Employment and job search
Approved Requested but not approved

Allowing state to use state funds to develop a program to encourage employment.
Approved for: IN, PA

Request to link Medicaid coverage or cost-sharing to employment status or job-search activities or work referral.
Requested by: IN, PA

Optional program that would result in reduced premiums or cost-sharing for individuals who work or participate in a job search program.

Note: In PA, this was an amended request; the initial waiver request included participating in a mandatory program as a condition of eligibility.

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Health savings account-like features: Hypothetical example

Here is a hypothetical example to illustrate health savings account-like features, using Jane, an enrollee who is single and has an annual income of $12,000. She will pay $20 a month in premiums ($240 per year) plus any standard copayments for services.

  • Jane will not have to pay any premiums or copayments for the first 6 months of enrollment.
  • In month 7, she will start paying $20 a month plus any required copayments as she uses services. Both copayments and premium payments will be placed into Jane’s account. Copayments will not accumulate; they will be disbursed to the providers Jane sees. Her monthly premium payments will accumulate in her account.
  • The health plan will draw on Jane’s account to offset the cost of services once she has used more than $760 in services ($1,000 minus $240, which is her annual contribution).
  • In month 4, Jane needs $850 in services. The health plan pays the first $760. There is $150 that will be drawn from Jane’s account, but at that point, Jane has not contributed anything into her account (no premiums in first 6 months). The health plan will start withdrawing once Jane’s payments begin and continue withdrawing her monthly deposits up to $150. In the meantime, the health plan will pay Jane’s providers.
  • If Jane uses less than $760 in services in a year, the amounts in her account will roll over to the next year. If Jane leaves Medicaid, unused payments will be returned to her or used to buy marketplace coverage.