Medicaid Policy: 2018 in Review

December 19, 2018|4:01 p.m.| ASTHO Staff

Medicaid policies at both the federal and state levels continued to evolve in 2018, with an increasing federal emphasis on state flexibility and budget neutrality for demonstration waivers as well as a wider uptake of Medicaid expansion among the states. States are also pursuing new policies related to community engagement and improving access to substance use disorder (SUD) treatment. Presented below are several key takeaways and insights concerning Medicaid policies in 2018.

Medicaid expansion reaches new corners of the country: Virginia’s state legislature approved Medicaid expansion in May 2018, with services scheduled to begin Jan. 1, 2019. Maine voters adopted Medicaid expansion in November 2017 and (following a court order) the governor submitted a state plan amendment in September 2018, coupled with a letter asking CMS to deny the request. However, Maine voters elected a new governor last month who is expected to support Medicaid expansion. Medicaid expansion was a ballot initiative in four states and passed in three (Idaho, Nebraska, and Utah) in the midterm elections. Meanwhile, Montana’s voters did not pass a measure to sustain Medicaid expansion linked to an increased tobacco tax, so state legislators will be debating expansion in their 2019 session anew.

States explore community engagement and work requirements: On Jan. 11, 2018, CMS issued guidance to state Medicaid directors regarding incentivizing work and community engagement among non-pregnant, non-disabled adults through Section 1115 demonstration waivers. Over the course of the year, five states (Arkansas, Kentucky, Indiana, New Hampshire, and Wisconsin) received federal approval to establish work requirements for certain Medicaid populations. Similar demonstration waivers are pending in ten additional states, including Alabama, Arizona, Kansas, Maine, Michigan, Mississippi, Ohio, South Dakota, Utah, and Virginia. Arkansas was the first state to roll out community engagement requirements and, according to media reports, more than 12,000 beneficiaries lost coverage between September and December 2018 due to these new community engagement parameters.

ACA individual mandate is put in limbo: In December 2018, a federal judge in Texas ruled that the ACA’s individual mandate was unconstitutional, adding that the law’s other provisions—including Medicaid expansion provisions and the popular protections for pre-existing conditions—would thereby also be unconstitutional. Observers expect the ruling will be appealed to the Fifth Circuit.

CMS provides additional guidance on budget neutrality: In August 2018, CMS shared a new, formal approach to ensuring that Section 1115 demonstrations remained budget-neutral. States are required to use a standardized Performance Metrics Database and Analytics System for all monitoring and evaluation reports, and CMS will cap the federal Medicaid funding states receive for demonstration projects, so it is tied to the amount a state would have received without the demonstration in place.

States improve access to behavioral healthcare and SUD treatment through Medicaid policy: This year, CMS introduced two new innovation models as part of a national strategy to combat the opioid crisis. In August 2018, CMS introduced the Integrated Care for Kids (InCK) model to support states in expanding access to early identification and treatment of behavioral health issues among children covered by Medicaid and the Children’s Health Insurance Program. The InCK model will offer eight cooperative agreements at a maximum of $16 million each in Spring 2019.

In October 2018, CMS announced the Maternal Opioid Misuse (MOM) model to improve care coordination and access to treatment among expectant and new mothers receiving care through Medicaid. The MOM model has a five-year performance period between fall 2019 and fall 2024, and the notice of funding opportunity is expected to be released in early 2019.

In addition, the following month, CMS sent a letter to state Medicaid directors outlining new possible authorities through Section 1115 demonstrations to pay for short-term residential treatment services for adults and children with serious mental illness and serious emotional disturbance.

CMS proposes revisions to Medicaid managed care regulations: On Nov. 14, 2018, CMS proposed a revision to the Medicaid managed care regulatory framework, with the comment period open until mid-January 2019. These revisions would make a range of adjustments including, but not limited to, allowing a three-year transition period for new managed care programs to maintain fee-for-service passthrough payments to providers. It would also remove states’ network adequacy standards around time and distance in favor of multiple, state-defined quantitative standards for various provider types.

CMS creates flexibilities in the individual market: Section 1332 waivers allow states to adjust their individual and small group insurance markets, as long as they provide coverage at least as comprehensive as levels of coverage required by the Affordable Care Act (ACA). This year, CMS approved 1332 waivers in four states (Maine, Maryland, New Jersey, and Wisconsin) to create reinsurance programs.

On Oct. 22, 2018, CMS released new guidance on Section 1332 of the ACA, allowing states new flexibilities in the marketplace through Section 1332 waivers—now referred to as State Relief and Empowerment waivers. These waivers will now be able to include Association Health Plans (AHPs) and short-term, limited duration insurance (STLDI). States may also use federal subsidy funding to help residents purchase AHPs and STLDI plans.

CMS and states are likely to continue to focus on controlling drug prices, building linkages to services that address health-related social needs for Medicaid beneficiaries (including housing and Medicaid transportation), expanding value-based payments, and continuing to support the federal government’s multi-pronged approach to combating the opioid crisis. ASTHO will continue to monitor the evolving health insurance landscape and support its members in promoting state innovations while preserving access to high-quality care.

Tell us what you think icon that links to blog evaluation form