Section 1115 Medicaid Demonstration Waivers: The Current Landscape of Approved and Pending Waivers

Appendix A

How Have States Used Section 1115 Demonstration Waivers in the Past?

From Medicaid’s beginning in 1965 through the early 1990s, waivers were small in scope. Beginning in the 1990s, there was an increase in waiver activity, and waivers became broader in scope. General periods of waiver activity are discussed below:

Broad Expansion Waivers (Mid-1990s-2001). In the pre-ACA mid-90s through the early part of this decade (before statutory authority/federal funds were directly authorized for coverage expansion to childless adults), most waivers focused on expanding coverage. Many began as state efforts to implement broader managed care systems than were then permitted under federal law. States used savings from mandatory managed care or redirected disproportionate share hospital funds to offset expansion costs, and flush economic times during the mid- to late-90s helped support expansion efforts. Two of the largest waivers approved during this time (Oregon Health Plan and Tenncare) also restructured coverage for existing beneficiaries in ways that were considered very controversial at the time.

HIFA Waivers (2001 Forward). In August 2001, under President Bush, the administration announced the Health Insurance Flexibility and Accountability (HIFA) waiver initiative, which promoted the use of waivers to expand coverage within “current-level” resources and offered states increased flexibility to reduce benefits and charge cost-sharing to offset expansion costs. However, states had limited interest and success in expanding coverage under HIFA, and waivers instead began to increasingly focus on cost control as the nation moved into an economic downturn. Expansions that did move forward under HIFA waivers were generally limited, particularly when compared to the larger expansions of the 1990s.

Reform Waivers (2005 Forward). Beginning in 2005, some broad waivers were approved that restructured Medicaid financing and other key program elements, including a couple (RI, VT) that set a global cap on federal funds. These waivers stemmed from continued federal emphasis on and interest by some states in controlling and increasing predictability of program costs as well as ideas about reshaping Medicaid to promote personal responsibility and reflect private market trends. However, during this same period, Massachusetts obtained a waiver that provided support for its efforts to provide universal coverage without significantly restructuring its Medicaid program.

Pre-ACA Expansion Waivers (2010-2013). Six states (California, Colorado, the District of Columbia, Minnesota, New Jersey, and Washington) used waivers to expand Medicaid coverage to adults after the enactment of the ACA to prepare for 2014.

Emergency Waivers (periodic over time in response to emergencies). Beyond these themes, waivers have also helped states quickly provide Medicaid support during emergencies, for example, by enabling a vastly streamlined enrollment process in New York in the wake of the September 11th attacks, and by assisting states in providing temporary Medicaid coverage to certain groups of Hurricane Katrina survivors.

Appendix B

What are the CMS Criteria for Evaluating Section 1115 Medicaid Demonstration Waivers?

In response to criticism from the General Accounting Office (GAO) about the lack of standards used to determine whether proposed Section 1115 demonstrations further Medicaid program objectives, the CMS posted a set of criteria to use when considering waiver requests in 2015. These criteria were revised by the Trump Administration in November 2017. For comparison, both sets of criteria are listed below.

2015 CMS Waiver Approval Criteria:

  1. Increase and strengthen overall coverage of low-income individuals in the state;
  2. Increase access to, stabilize and strengthen providers and provider networks available to serve Medicaid and low-income populations in the state;
  3. Improve health outcomes for Medicaid and other low-income populations in the state; or
  4. Increase the efficiency and quality of care for Medicaid and other low-income populations through invitations to transform service delivery networks.

November 2017 Revised CMS Waiver Approval Criteria:

  1. Improve access to high-quality, person-centered services that produce positive health outcomes for individuals;
  2. Promote efficiencies that ensure Medicaid’s sustainability for beneficiaries over the long term;
  3. Support coordinated strategies to address certain health determinants that promote upward mobility, greater independence, and improved quality of life among individuals;
  4. Strengthen beneficiary engagement in their personal healthcare plan, including incentive structures that promote responsible decision-making;
  5. Enhance alignment between Medicaid policies and commercial health insurance products to facilitate smoother beneficiary transition; and
  6. Advance innovative delivery system and payment models to strengthen provider network capacity and drive greater value for Medicaid.
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