Resource Page: Emerging Themes in State Medicaid Waivers

As the debate over the repeal of the Affordable Care Act (ACA) continues, the federal Health and Human Services (HHS) and Center for Medicare and Medicaid Services (CMS) are encouraging states to apply for Section 1115 Medicaid demonstration waivers to change eligibility, enrollment, and benefits beyond what is permitted under current guidelines.

CHCF will maintain this list of resources and analyses about Medicaid waiver activity across the country and its likely impacts with a particular focus on waivers that seek to change eligibility, enrollment, or benefits through features such as work requirements, health savings accounts, healthy behavior incentives, requiring enrollees to pay a portion of premiums, and/or other out-of-pocket costs, and more. This will include waivers that have not been approved by the Centers for Medicare & Medicaid Services (CMS) to date, as well as several that were approved by the Obama administration as part of negotiations with select states to expand Medicaid under the ACA. Resources are organized reverse-chronologically and under the following headings:

This page will be updated regularly. If you have suggested additions, please email Anne Sunderland.


Stewart et al. v. Hargan et al.
Complaint filed in the US District Court for the District of Columbia on behalf of 15 current Kentucky Medicaid recipients at risk of losing coverage under the state’s newly approved Medicaid Section 1115 waiver. Defendants are HHS Acting Secretary Eric Hargan, CMS Administrator Seema Verma, and other administration officials. According to the Washington Post, the complaint alleges that in granting the waiver, the administration has “effectively rewritten the [Medicaid] statute . . . overturning a half-century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country.” (US District Court for the District of Columbia, January 24, 2018)

Letter from Senator Ron Wyden and Senate Democrats to HHS Acting Secretary Eric Hargan
Signed by 29 Democratic senators, expresses concern about the legality of the Department of Health and Human Services’s decision to allow states to impose work requirements, lock-out periods, time limits, drug testing, and “onerous” premiums and cost-sharing in Medicaid through the Section 1115 waiver process. Indicates that such requirements “contradict the plain text and purpose” of the Medicaid law, which is to “provide medical assistance (to eligible individuals) whose income and resources are insufficient to meet the costs of necessary medical services,” as well as rehabilitation and other services to “attain or retain capability for independence or self-care.” Urges HHS to “reject Section 1115 demonstration requests that jeopardize the health and financial security of Medicaid beneficiaries.” (Ron Wyden et al., United States Senate, January 17, 2018)

Letter from CMS Deputy Administrator Brian Neal to the Office of Kentucky Governor Matthew Bevin (PDF)

Provides the administration’s approval of Kentucky’s Section 1115 Medicaid demonstration project, titled Kentucky Helping to Engage and Achieve Long Term Health (KY HEALTH), effective January 12, 2018, through September 30, 2023. Indicates that “to remain eligible for [Medicaid] coverage, nonexempt beneficiaries must complete 80 hours per month of community engagement activities, such as employment, education, job skills training, and community service.” Exempt beneficiary groups include former foster care youth, pregnant women, primary caregivers of a dependent, medically frail beneficiaries, beneficiaries with an acute medical condition that prevents them from complying with the requirements, and full-time students. Other provisions approved under the demonstration include premiums for some beneficiaries and a six-month lock-out for beneficiaries who fail to pay premiums or to comply with other administrative requirements. (Centers for Medicare & Medicaid Services, January 12, 2018)

Letter to State Medicaid Directors from Brian Neale, CMS Deputy Administrator and Director for the Center for Medicaid and CHIP Services
Affirms the administration’s support, and outlines its policy guidance, for Section 1115 Medicaid demonstration waivers that require “work or community engagement as a condition of eligibility, as a condition of coverage, as a condition of receiving additional or enhanced benefits, or as a condition of paying reduced premiums or cost sharing.” States are encouraged to align work requirements with similar policies under TANF and SNAP; exempt from the requirements are pregnant women, the disabled, the elderly, primary caregivers of dependents, those too ill or frail to work, those in treatment for opioid addiction, and several other groups; allow beneficiaries to meet work requirements through employment, job search activities, volunteering, and other types of community engagement. States may take into account local employment and transportation opportunities in designing the requirements. States seeking demonstration waivers must describe how they will support Medicaid recipients in meeting work requirements. Federal funds may not be used for such support purposes. (Centers for Medicare & Medicaid Services, January 11, 2018)

States Will Be Allowed to Impose Medicaid Work Requirements, Top Federal Official Says
Provides highlights of a November 7, 2017 speech by CMS Administrator Seema Verma to the National Association of Medicaid Directors. The speech was “Verma’s most detailed public explanation of how she plans to approach Medicaid in a[n]… era in which Republicans still hope to roll back its expansion.” (Washington Post, November 8, 2017)

Personal Responsibility in Medicaid (PDF)
In this presentation to the annual Health Management Associates conference, CHCF Improving Access director, Chris Perrone, summarizes the research to date around the impact of features such as premium and cost-sharing, healthy behaviors incentives, and work requirements on Medicaid and low-income consumers. The presentation also provides useful context around the unique health needs and utilization patterns of Medicaid enrollees, the financial pressures within Medicaid, and approaches being pursued in California to control costs and improve care within the state’s Medi-Cal program. (Chris Perrone, California Health Care Foundation, September 12, 2017)

Letter to Governors from HHS Secretary Thomas Price and CMS Administrator Seema Verma (PDF)
Outlines HHS and CMS’ approach to Medicaid waivers under the Trump administration. Encourages demonstrations in specific areas, including job training and employment and “align[ing] Medicaid and private insurance policies for non-disabled adults.” (Department of Health and Human Services, March 2017)

Section 1115 Waivers: An Introduction
A webcast featuring Joan Alker, executive director of the Center for Children and Families of the Georgetown University Health Policy Institute, that describes how Medicaid 1115 waivers work, what they can and cannot do, and when they may not be needed, in addition to providing information on application and public comment processes, evaluation, and budget neutrality requirements. (Joan Alker, Georgetown University Health Policy Institute, February 23, 2017)


State Waivers as a National Policy Lever: The Trump Administration, Work Requirements, and Other Potential Reforms in Medicaid
Analysis of the administration’s use of regulatory processes in the last year to reshape Medicaid — from the appointment of Seema Verma (a designer of Indiana’s Section 1115 Medicaid demonstration) as head of CMS, to the approval of the Kentucky and Indiana waivers in early 2018. Notes CMS’s newly stated criteria for waiver approval that “no longer places an emphasis on coverage . . . [but rather on] upward mobility, greater independence and beneficiary engagement, [and] incentive structures.” Summarizes the Kentucky and Indiana waiver programs and provides an overview of pending waivers focusing on work requirements, lockout periods, lifetime benefit caps, waiver of hospital presumptive eligibility, and reductions in eligibility. Also notes state regulatory actions indicating a willingness to permit exclusion of Planned Parenthood and to implement drug formularies in Medicaid. Concludes that, with the administration’s support, states are “ushering in an era of profound change for the decades-old program.” (Billy Wynne and Taylor Cowey, Health Affairs Blog, February 6, 2018)

Medicaid and Work Requirements: New Guidance, State Waiver Details, and Key Issues
Provides a summary of approved and pending Section 1115 Medicaid waiver requests to implement work requirements. Includes a table outlining, for each state, what the work requirements would be (including what would count as work activities), the hours required, and what the common exemptions to the requirements would be. (MaryBeth Musumeci, Rachel Garfield, and Robin Rudowitz, Kaiser Family Foundation, January 16, 2018)

State 1115 Proposals to Reduce Medicaid Eligibility: Assessing Their Scope and Projected Impact
Summarizes elements of pending Medicaid Section 1115 waiver applications in 10 states — Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, Mississippi, New Hampshire, Utah, and Wisconsin — seeking to limit Medicaid enrollment through work requirements, lock-outs for failure to provide information, time limits, and curbs on retroactive and presumptive eligibility. Summarizes the required impact estimates that, to date, have been submitted by 5 of the 10 states. Estimated reductions in enrollment range from 0% in Kansas (despite a work requirement and time limits) to nearly 15% in the fifth year of the demonstration in Kentucky. Raises two policy questions: (1) Does a proposal that lacks impact estimates or that claims to have no impact satisfy 1115 requirements?, and (2) Do proposals that will result in the loss of health insurance or the future denial of benefits fall within the scope of the HHS Secretary’s Section 1115 authority, which enables him/her to undertake demonstrations that promote the statutory objective of Medicaid (to furnish medical assistance to people who need it)? (Sara Rosenbaum et al., The Commonwealth Fund, January 11, 2018)

Work Requirements Don’t Work
In the context of state proposals to impose work requirements on nondisabled Medicaid enrollees, summarizes research on the impact of work requirements in TANF (cash assistance). Major findings: employment increases among TANF recipients subject to work requirements were modest and faded over time; the most successful programs included education and skills-training for those subject to work requirements; and the large majority of programs did not lift people out of poverty (“although recipients were likelier to be employed within two years of facing work requirements, their earnings weren’t enough to lift them out of poverty”). (LaDonna Pavetti, Center on Budget and Policy Priorities, January 10, 2018).

Section 1115 Medicaid Demonstration Waivers: The Current Landscape of Approved and Pending Waivers
Issue brief with an appendix that lists all approved and pending Section 1115 waivers. As of December 2017, 34 states have 42 approved waivers, and 20 states have 22 pending waivers. Seven states (Arizona, Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire) used Section 1115 waivers to implement the ACA Medicaid expansion; these waivers also include restrictions on benefits and cost sharing. Emerging themes among the 22 pending waivers include work requirements and more restrictive eligibility and enrollment provisions than have been approved to date. In many cases, requirements in pending waivers would apply to both traditional and expansion Medicaid populations. (Elizabeth Hinton et al., Kaiser Family Foundation, December 13, 2017)

Tracker: Which States Have Approved and Pending Section 1115 Medicaid Waivers?
Interactive national map, updated December 13, 2017, allowing the user to view approved and pending waiver activity by state, and in the following categories: Medicaid expansion; work requirements; eligibility and enrollment restrictions; benefit restrictions, copays, healthy behaviors; behavioral health, MLTSS; other targeted populations; and delivery system reform. Also includes the same data in a downloadable table format. (Kaiser Family Foundation, December 13, 2017)

Medicaid Work & Community Engagement Requirements: Federal Activity and State Considerations
Presentation from a state technical assistance webinar by Manatt Health. Reviews CMS’s position on conditioning Medicaid coverage on work or community engagement, reviews state waiver requests with respect to these topics, and discusses considerations for states in crafting and implementing such requirements. Also provides a high-level summary of the impact of existing work requirements in SNAP and TANF as follows: “In SNAP, work requirements have resulted in substantial declines in enrollment. . . . In TANF, work requirements helped increase employment, at least initially.” (State Health Reform Assistance Network, November 28, 2017)

Medicaid Retroactive Coverage Waivers: Implications for Beneficiaries, Providers, and States
Highlights CMS’s October 2017 approval of Iowa’s Section 1115 waiver request permitting the elimination of three-month retroactive coverage for nearly all new Medicaid applicants. Iowa’s waiver is expected to reduce monthly enrollment by 3,344 enrollees and reduce annual federal and state Medicaid spending by $36.8 million ($9.7 million state share). Notes that relatively little is yet known about the impact of such waivers on patients’ access to care, and that it is unclear whether or not Iowa will conduct an evaluation of this new policy. (Kaiser Family Foundation, November 10, 2017)

What to Watch for in Trump Administration Actions on Medicaid Waivers
Catalogs pending state Medicaid waiver proposals that base Medicaid eligibility on work-related activities or drug screening; impose premiums on people with incomes below the poverty line; impose a time limit on Medicaid enrollment; limit the Medicaid expansion to people with incomes below the poverty line; and lock people out of coverage for failure to report certain information in a timely manner. Highlights Kentucky’s pending waiver request — which will likely be the first to be acted upon by the Trump administration — as a “bellwether” of what may be approved in other states. The Kentucky proposal includes work requirements, higher premiums, and a lock-out, and is predicted to reduce the number of Medicaid enrollees. (Center on Budget and Policy Priorities, November 2, 2017)

Section 1115 Demonstrations
Resource page that includes an overview of Section 1115 waivers, the application process, transparency requirements, CMS-sponsored evaluations, and a searchable database of all current and concluded state programs authorized under Section 1115 and 1915 waivers. (Centers for Medicare & Medicaid Services)

Section 1115 Medicaid Demonstration Waivers: A Look at the Current Landscape of Approved and Pending Waivers
Issue brief with an appendix that lists all approved and pending Section 1115 waivers. As of September 2017, 33 states have 41 approved waivers and 18 states have 21 pending waivers. Seven states (Arizona, Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire) used Section 1115 waivers to implement the ACA Medicaid expansion; these waivers also include restrictions on benefits and cost sharing. Emerging themes among the 21 pending waivers include work requirements and more restrictive eligibility and enrollment provisions than have been approved to date. In many cases, requirements in pending waivers would apply to both traditional and expansion Medicaid populations. (Elizabeth Hinton et al., Kaiser Family Foundation, September 13, 2017)

Section 1115 Medicaid Expansion Waivers: A Look at Key Themes and State Specific Waiver Provisions
Issue brief focusing on approved and pending Section 1115 waivers that implement the ACA’s Medicaid expansion. (These are a subset of all approved and pending Section 1115 waivers, which are described in a companion paper above.) Focuses on work requirements and more restrictive eligibility and enrollment provisions than have been approved to date. An appendix provides extensive details about approved and pending Medicaid expansion waivers in each relevant state. (MaryBeth Musumeci, Elizabeth Hinton, and Robin Rudowitz, Kaiser Family Foundation, August 16, 2017)

State-Specific Medicaid Program Changes
As of June 2017, a compendium of key pending waiver requests for both ACA Medicaid expansion and traditional Medicaid populations. Organized by waiver feature and state. (Anita Cardwell, National Academy for State Health Policy, June 13, 2017).

Emerging Themes in Proposed State Medicaid Waivers
High-level overview of waiver features in the seven states (Arizona, Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire) that used Section 1115 to expand Medicaid. The paper also highlights pending waivers in other states that incorporate disenrollment for nonpayment of premiums, work requirements as a condition of eligibility, time limits on coverage, and drug screening. Notes that “states considering similar proposals for Medicaid enrollees will need to take into account the potential for increased administrative costs and staff burdens associated with tracking individuals’ compliance to various requirements, determining which populations are exempt, and providing clear information to beneficiaries about complex program rules.” (Anita Cardwell, National Academy for State Health Policy, June 13, 2017)

PRIMER: A Survey of State Medicaid Expansion 1115 Waivers
A description of Section 1115 waivers for the expansion of Medicaid under the ACA in seven approved states (Arizona, Arkansas, Indiana, Iowa, Michigan, Montana, and New Hampshire) and one pending approval (Kentucky). The primer also includes a description of Wisconsin’s state-funded Medicaid expansion. It presents evaluation data where available. (Tara O’Neill Hayes, American Action Forum, May 22, 2017)

Overview of Alternative Medicaid Expansion Waivers (PDF)
Overview, as of January 2017, of both approved and rejected features of “alternative Medicaid expansion” waivers in seven states, including Indiana, whose waiver was crafted under the leadership of current CMS Administrator Seema Verna. Waiver features include premiums, cost sharing, health savings accounts, healthy behavior incentives, work requirements, benefits and eligibility variations, and premium assistance through state exchanges and/or employer-based insurance. (Patricia Boozang, Deborah Bachrach, and Mindy Lipson, State Health Reform Assistance Network, January 2017)

Analyses and Evaluations

Are Medicaid Work Requirements Legal?
Legal analysis of current and potential future court challenges to work requirements in Medicaid. Indicates that the pending lawsuit (PDF) challenging CMS’s approval of Kentucky’s waiver will hinge on whether the program meets the statutory standard of Section 1115 — requiring that it must be a genuine “experimental, pilot, or demonstration project” that is “likely to assist in promoting the objectives” of Medicaid. The author notes that courts have rarely invalidated an approved Section 1115 waiver because the language of the statute is so broad “that CMS can maneuver most waivers into it. . . . All the agency has to do is explain how a waiver might yield insight into how to improve Medicaid and why such improvements, if they materialized, would ‘assist in promoting [Medicaid’s] objectives.’ When the explanation is reasonable, judges will usually defer.” (Nicholas Bagley, JAMA Network Viewpoint, January 30, 2018)

Approved Changes to Medicaid in Kentucky
Fact sheeting describing key features of the Kentucky Section 1115 Medicaid waiver approved (PDF) on January 12, 2018, including work requirements, premiums, coverage lock-outs, deductibles and incentive accounts, benefit restrictions, and changes to the substance abuse disorder program. Notes that previous coverage expansions in Kentucky have resulted in “gains in coverage and reductions in the uninsured, increases in access and health care utilization, and positive fiscal impacts.” Concludes that it will be important to watch implementation of the new provisions to determine “whether there are adequate resources available, and the waiver’s impact on eligible people and state administrative procedures and costs.” (MaryBeth Musumeci, Robin Rudowitz, and Elizabeth Hinton, Kaiser Family Foundation, January 17, 2018)

Work Requirements in Social Safety Net Programs: A Status Report of Work Requirements in TANF, SNAP, Housing Assistance, and Medicaid
Provides an overview, and summarizes the impact, of work requirements currently in use in TANF, SNAP, and some federal housing assistance programs. Discusses the implications of those findings for possible work requirements in Medicaid and summarizes pending Medicaid waiver requests that include work requirements. Finds that work requirements have had mixed results in terms of increasing employment and reducing poverty and reliance on assistance. Concludes with a set of design questions for states considering Medicaid work requirements about the purpose, expected outcomes, practical implementation, and associated costs of the requirements. (Heather Hahn et al., Urban Institute, December 2017)

The Effects of Premiums and Cost Sharing on Low-Income Populations: Updated Review of Research Findings
Analysis of 65 papers published between the years 2000 and 2017 on the effects of premiums and cost sharing on low-income populations in Medicaid and CHIP. It finds that premiums are a barrier to obtaining and maintaining Medicaid and CHIP coverage among low-income individuals, with the largest effects among the lowest-income individuals, and that even relatively small levels of cost sharing ($1 to $5) are associated with reduced use of care, including necessary services. Further, it finds that cost sharing can also result in increased use of the emergency room and have a negative effect on access to care and health outcomes. It notes that state savings from premiums and cost sharing in Medicaid and CHIP are limited and are offset by increased disenrollment, increased use of more expensive services, increased costs in other areas, and administrative expenses. (Kaiser Family Foundation, June 1, 2017)

Medicaid Lessons from Pioneering States
A collection of resources synthesizing available evidence on how Medicaid HSAs, cost sharing, payment enforcement, and healthy behavior programs have worked in Arkansas, Indiana, and Michigan — all states that used Section 1115 waivers to expand Medicaid under the ACA. Includes:

(Vanderbilt University School of Medicine, June 2017)

Healthy Michigan Quarterly Report for Second Quarter of Federal Fiscal Year 2017 (PDF)
This paper describes Healthy Michigan, the 1115 waiver program through which the state expanded Medicaid under the ACA in 2014, with all enrollees either choosing or being assigned to a Medicaid managed care plan. The program is intended to “test innovative approaches to beneficiary cost sharing and financial responsibility for health care for the new adult eligibility group.” Provides data on enrollment, choice of plans, number of beneficiaries completing a health risk assessment and engaging in certain documented healthy activities (actions that result in reduced cost sharing), status of outreach and enrollment efforts, status of encounter data collection, consumer complaints, quality monitoring activities, etc. (Michigan Department of Health and Human Services, June 19, 2017)

How Many Will Be Impacted by Work Requirements: Indiana Gives Us the First Clue
Highlights data from Indiana’s pending Section 1115 waiver amendment (PDF) and accompanying analysis by the state’s independent evaluator, Milliman. The author calculates that, if proposed work requirements were applied to current beneficiaries, just under 25,000 would lose coverage for noncompliance, out of a total of 438,000 people enrolled in Healthy Indiana 2.0. (Joan Alker and Alexandra Corcoran, Georgetown University Health Policy Institute, May 26, 2017)

Preliminary Findings from Evaluations of Medicaid Expansions Under Section 1115 Waivers (PDF)
This presentation before the Medicaid and CHIP Payment and Access Commission (MACPAC) in April 2017 provides background on Section 1115 waivers in addition to the features of Medicaid expansion waivers in seven states and across four design elements (benefits waived, premiums and cost sharing, healthy behavior incentives, and premium assistance). Early evaluation findings from Arkansas, Indiana, Iowa, and Michigan include evidence that changes in cost sharing have not significantly altered beneficiary behavior, beneficiary understanding of health savings account programs is mixed, and the use of preventive services is high, but substantial portions of members do not understand or are unaware of healthy behavior incentive structures. It also presents limited findings on premium assistance. (Kacey Buderi, MACPAC, April 20, 2017)

Evidence from the Private Option: The Arkansas Experience
Evaluation of the first two years of Arkansas’s Section 1115 waiver expanding Medicaid under the ACA. The waiver approach, “known as the ‘private option,’ uses Medicaid funds to purchase private health plans on the state’s marketplace.” It finds that “Arkansas’s private option improved access to primary care and prescription medications, reduced reliance on the emergency department, increased use of preventive care, and improved perceptions of quality and health among low-income adults in the state compared to Texas, which did not expand Medicaid. Arkansas’s benefits were similar to those observed in Kentucky’s traditional Medicaid expansion.” (Bethany Maylone and Benjamin D. Sommers, The Commonwealth Fund, February 22, 2017)

An Early Look at Medicaid Expansion Waiver Implementation in Michigan and Indiana
Describes Indiana and Michigan’s approved Section 1115 Medicaid expansion waivers, focusing on premiums, health savings accounts, and healthy behavior incentive programs. The paper presents insights based on “22 in-person and telephone interviews conducted in July and August 2016 with state officials, providers, health plans, beneficiary advocates, and enrollment assistors” in both states, in addition to reports from the state Medicaid agencies and four beneficiary focus groups. Key insights include evidence that, among other things, implementation of complex programs involves collaboration with many stakeholders, sophisticated IT systems, and administrative costs; premium costs and complex enrollment policies can deter eligible people from enrolling in coverage; and health savings accounts can be confusing for beneficiaries. (MaryBeth Musumeci et al., Kaiser Family Foundation, January 31, 2017)

Indiana Healthy Indiana Plan 2.0: Interim Evaluation Report (PDF)
This report, as required by CMS, provides an independent evaluation of the progress made by the Healthy Indiana Plan (HIP) 2.0 in the first year of a three-year demonstration period (February 1, 2015, to January 31, 2018). The report describes the features of HIP 2.0, including coverage through a high-deductible health plan paired with a Personal Wellness and Responsibility (POWER) account, with richer coverage available to those who make contributions to POWER accounts, and thinner coverage available to those who do not. Members with incomes above 100% FPL who do not make contributions are disenrolled from HIP 2.0 and locked out for six months. Also described are the HIP Link premium assistance program for employer-based insurance and Gateway to Work (GTW), a voluntary job training and search program for eligible HIP members. (The Lewin Group, July 6, 2016)

Arkansas Health Care Independence Program (“Private Option”) Section 1115 Demonstration Waiver Interim Evaluation Report
As required by CMS, Arkansas provided an interim evaluation of its Health Care Independence Program (HCIP), an ACA Medicaid expansion established by Section 1115 waiver. The program, also known as the “private option,” uses premium assistance to secure private health insurance through the state’s exchange for nonelderly adults with incomes at or below 138% FPL. The program covered 225,000 people through 2015. The report examines claims, enrollment, provider, and survey data from 2014. Compared to traditional Medicaid, HCIP enrollees had improved access, improved used of preventive care, reduced use of emergency department care, and higher per-member, per-month costs. (Arkansas Center for Health Improvement, June 16, 2016)

Section 1115 Demonstration Extension — Iowa Wellness Plan (PDF)
June 2016 proposal to HHS to extend the Iowa Wellness Plan. The plan includes the state’s own evaluation of the original waiver, approved in 2014 under the name “Iowa Health and Wellness Plan” (IHAWP). The evaluation was conducted in December 2015 by the University of Iowa Public Policy Center and found that “enrollees have experienced enhanced access to care and positive outcomes on a variety of quality measures. Of note, when compared to low-income Medicaid State Plan enrollees, waiver recipients have lower emergency department and prescription drug per-member, per-month costs, higher rates of preventive care, and lower unmet need for nonemergency medical transportation.” Evaluations findings begin on page 14 of the extension request. (Iowa Department of Health and Human Services, June 1, 2016)