Medicaid Expansion Waivers: What Will We Learn?

Six of the 32 states implementing the Affordable Care Act’s (ACA) Medicaid expansion to date have done so through Section 1115 waivers. Using these waivers, the Centers for Medicare and Medicaid Services (CMS) has approved terms that extend beyond the flexibility provided by federal law. Section 1115 waivers authorize research and demonstration projects that, in the view of the Health and Human Services (HHS) Secretary, further the purposes of the Medicaid program. The ACA implemented new requirements for these waivers, including that states must have a publicly available, approved evaluation strategy. States also must submit an annual report to HHS that describes the changes occurring under the waiver and their impact on access, quality, and outcomes. Additionally, a federal contract has been awarded to evaluate different types of Section 1115 waivers, including those related to the ACA’s Medicaid expansion. This brief examines some of the major research questions and hypotheses relevant to the federal and state evaluations of Medicaid expansion Section 1115 waivers and explores key challenges that may hamper research and evaluation efforts.

The federal evaluation of Section 1115 waivers is designed to consider the experiences of multiple states in implementing policy changes related to Medicaid expansion, including Marketplace premium assistance programs, premiums beyond the limits set in federal law, and healthy behavior incentive programs. While the state evaluations are unique to each state’s waiver, the evaluation questions identified by the states relevant to Medicaid expansion waivers can be grouped into five key areas: coverage, access to care and utilization, premiums, healthy behavior incentives, and program costs.

As additional states seek waivers, evaluations are key to understanding Medicaid expansion experiences under existing waivers. Evaluation plans include comprehensive research questions, but a number of challenges may hamper research efforts including: limited access to timely data; difficulty selecting outcome measures; difficulty generalizing the results; administrative complexity; and implementation of waivers in dynamic, continuously evolving environments. Despite the challenges in conducting waiver evaluations, timely and publicly available results are important. In the near term, availability of data can help states and CMS to understand issues and make mid-course corrections in the implementation of current waivers. In the near and longer term, data and analysis of existing waivers also begins to inform policy makers about which policies are effective and could be replicated or implemented more broadly as well as what approaches to avoid.


As of January, 2016, six of the 32 states1 implementing the ACA’s Medicaid expansion are doing so through a Section 1115 waiver (Arkansas, Iowa, Michigan, Indiana, New Hampshire, and Montana).2 The ACA expands Medicaid eligibility to nearly all adults with income at or below 138% of the federal poverty level (FPL, $16,394 per year for an individual in 2016); however, the Supreme Court’s ruling on the ACA’s constitutionality effectively made the Medicaid expansion a state option.3  For states that implement the expansion, the ACA provides for full federal financing from 2014 through 2016 for those made newly eligible by the law, then gradually decreases to 90% federal funding by 2020.

While each of the Medicaid expansion waivers is unique, they contain some common provisions.4 Common elements of the waivers include a “premium assistance” model, in which the state uses federal Medicaid funds to purchase Marketplace coverage for enrollees or other private coverage; enrollee premiums; elimination of the non-emergency medical transportation benefit, which is otherwise required under Medicaid; and use of “healthy behavior incentives” to reduce enrollee premiums and/or copayments. Indiana’s waiver contains additional provisions (some of which were subsequently approved in other states) that allow the state to waive retroactive Medicaid eligibility; make coverage effective beginning on the date of the first premium payment, rather than on the date of application; and bar certain expansion adults from re-enrolling in coverage for six months if they are disenrolled due to unpaid premiums. In addition, under separate Section 1916(f) waiver authority, Indiana received approval to charge higher cost-sharing than otherwise allowed under federal rules for non-emergency use of the emergency room. Also unique among the current expansion waivers, Montana received approval to implement 12-month continuous eligibility for expansion adults to reduce the effects of churn between Medicaid and Marketplace coverage due to small changes in income.  Except for Montana, where the evaluation plan is still under development, all of these states have approved evaluation plans.

Table 1:  Key Themes in Approved ACA Expansion Waivers
Waiver Provision AR IA* MI* IN* NH* MT*
Premium Assistance QHP ESI QHP ESI QHP
Premiums / Monthly Contributions X X X X X
Healthy Behavior Incentives X X X
Waive Required Benefits (NEMT) X X
Reasonable Promptness X
Waive Retroactive Eligibility X X
Co-payments Above Statutory Limits X
12-Month Continuous Eligibility X
NOTES: * New Hampshire transitioned from a SPA to a waiver in 2016. Cost-sharing waiver approved in IN under Section 1916(f), not Section 1115. IA has approval for mandatory QHP enrollment with premium assistance for new adults from 101-138% FPL but has a waiver amendment pending to instead require mandatory Medicaid managed care due to the loss of both QHPs. Under MI’s waiver amendment, beneficiaries from 101-138% FPL will choose between coverage in Medicaid managed care and QHPs beginning April 2018. PA transitioned from a waiver to a SPA in 2015 (not included in the table). An evaluation plan has not yet been submitted for MT.
SOURCE: KCMU analysis of waiver proposals.
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