Health Affairs blog evaluates the tradeoffs of Medicaid expansion through Section 1115 waivers

March 14, 2016

As of this Health Affairs post, Rachel Sachs says six states expanded their Medicaid programs under Section 1115 waivers. Each state customized a slightly different package of changes to Medicaid expansion, she says, but many of the general changes they have sought are common across states. For example, using a privatized model by directing newly eligible enrollees onto ACA exchanges by purchasing private coverage with Medicaid funds. Most of these waiver states require newly eligible enrollees to pay small amounts in premiums each month or meet other contribution requirements. Several states allow individuals to reduce out-of-pocket contributions by participation in healthy behavior incentives. CMS has not approved all requests for modifications, and the approved waivers are the result of compromise, but it has approved many. Sachs says this new set of waivers are often being sought because of the political concerns at work in many of these states, rhetoric around values including personal responsibility and the desire to minimize additional spending on Medicaid populations. She is concerned the waivers may miss the goal of being "likely to assist in promoting the objectives of" the Medicaid program. She adds there may be concern about states, such as Arizona, which accepted Medicaid expansion and now seek to obtain waivers that would restrict access or impose other conditions on their Medicaid populations. However, Sachs contends, CMS has an incentive to grant waivers in states that have already expanded the program: the fear those states will walk back their expansion of Medicaid.