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How Do Section 1115 Medicaid Expansions Compare with Traditional Expansions? Considerations for Kentucky
December 19, 2016:The upcoming administration has indicated that it will be looking for ways to give states greater flexibility in how they design their Medicaid programs. One way to achieve this flexibility is through the use of Section 1115 demonstration waivers, through which the Centers for Medicare and Medicaid Services (CMS) can approve state-led experimental, pilot, or demonstration projects to evaluate program modifications such as eligibility expansion, provision of additional services not typically covered, or the use of innovative delivery systems that improve care, increase efficiency, and reduce costs. [1]
Shifting from Traditional Expansion to a Section 1115 Expansion: Uncharted Territory
Six of the 32 states that have expanded—or announced plans to expand—their Medicaid programs under the Affordable Care Act have done so using Section 1115 waivers. The State of Kentucky is among the 26 states that have implemented a traditional Medicaid expansion, but it has since announced plans to shift to an alternative 1115 waiver-based expansion. To date, only New Hampshire has transitioned from a traditional to a waiver-based expansion. And unlike Kentucky, that state’s traditional expansion was planned as a temporary step until the state implemented a waiver-based expansion.
A Closer Look at the Waiver Components under Discussion
SHADAC is currently conducting a study of the impact of ACA implementation in Kentucky that evaluates the ways in which the ACA impacts health care coverage, access, quality, cost, and health outcomes in the state.
Most recently, in light of Kentucky’s waiver proposal and in order to inform the discussion around the waiver, we have examined the main components of existing Medicaid expansion waivers in five states where the waivers most closely align with the Kentucky’s waiver discussion: Arkansas, Indiana, Iowa, Michigan, and Montana. The findings from this analysis are detailed in a special issue brief, “Section 1115 Waivers and ACA Medicaid Expansions: A Review of Policies and Evidence from Five States.” The waiver components explored in the brief include premium assistance, enrollee contributions, modified cost-sharing, healthy behavior incentives, and waiver of required benefits. In each case, arguments for and against the specific component as well as the relevant evidence. Overall, the results were mixed on the potential of the specific waiver activities to impact either access to health coverage and services or costs for newly eligible Medicaid beneficiaries.
View the full brief to access the detailed findings.
Waivers Increasingly Considered
The findings from this analysis having implications for other states moving forward with or considering Section 1115 waiver proposals. So far, in addition to Kentucky, Arizona and Ohio have announced intentions to transition from traditional to waiver-based expansions.
Learn more about SHADAC’s analysis of the impact of ACA implementation in Kentucky.
[1] Centers for Medicare and Medicaid Services. “About Section 1115 Waivers.” Baltimore, MD. Available at https://www.medicaid.gov/medicaid/section-1115-demo/about-1115/index.html.