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Early Implementation Experience of Medicaid Expansion Waivers in Michigan and Indiana Can Help Inform Future Medicaid Waivers

Michigan and Indiana, led by Republican governors, each obtained a waiver from the Obama Administration to expand Medicaid in ways that differ from the terms of the Affordable Care Act. Notably, both states’ expansions include provisions related to charging enrollees premiums, requiring them to contribute to health accounts and providing incentives to participate in healthy behavior programs, though the details and implementation vary considerably between the two states.

A new analysis from the Kaiser Family Foundation explains the key components of Michigan and Indiana’s waivers and presents insights based on their early implementation experiences. Although the future of the ACA and the role of Section 1115 Demonstration waivers is unclear, the Medicaid expansion experience in Indiana and Michigan may provide information for other states that want to consider similar concepts.

Key insights from the new analysis include:

  • Medicaid expansion design, whether through state plan authority or waivers, is highly dependent on the features of a state’s underlying Medicaid program.
  • Implementation of complex programs involves collaboration with a variety of stakeholders, sophisticated IT systems, and administrative costs.
  • Premium costs and complex enrollment policies can deter eligible people from enrolling in Medicaid coverage.
  • Health accounts can be confusing for beneficiaries.
  • Beneficiary and provider education and tangible incentives appear central to implementing healthy behavior incentive programs.

The analysis also notes that it’s too early to determine whether health accounts and healthy behavior incentives can change beneficiaries’ behavior, lead to more efficient use of health care services and improve health outcomes.

The findings are based on 22 in person and telephone interviews with state officials, providers, health plans, beneficiary advocates and enrollment assisters in Michigan and Indiana, as well as four focus groups (two in each states) with beneficiaries enrolled in Medicaid waiver coverage. The analysis also incorporates data and reports from the states’ Medicaid agencies and other publicly available sources.

The Henry J. Kaiser Family Foundation Headquarters: 2400 Sand Hill Road, Menlo Park, CA 94025 | Phone 650-854-9400
Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone 202-347-5270

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.