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Medicaid, SCHIP, and Federal Authority
Medicaid is a jointly funded federal-state program that provides health insurance coverage for low-income families and children, people with disabilities, and the elderly. It is the nation's largest health insurance program, providing coverage for more than 50 million people and costing over $300 billion annually.
Because of the opportunity to obtain federal matching funds, Medicaid is often looked to as an integral part of state strategies to provide insurance coverage for the low-income uninsured. States administer their Medicaid programs within federal guidelines. Each state establishes specific eligibility rules under Medicaid, but must also meet mandatory minimum federal requirements. Additionally, there are groups of individuals that states have the option to cover under Medicaid.
There are still some people, however, who are ineligible for Medicaid regardless of their income because they don't meet the categorical requirements of Medicaid-meaning, they don't fall into a group that federal Medicaid eligibility rules allow. For example, in most states childless adults are not eligible for Medicaid regardless of how low their income is unless they fall into an otherwise allowable federal group.
Source: The Henry J. Kaiser Family Foundation, Medicaid Enrollment and Spending by "Mandatory" and "Optional" Eligibility and Benefit Categories, June 2005
Most states have chosen to expand Medicaid coverage above the minimum federal levels. The federal rules give states flexibility in how income eligibility is calculated within these groups. This flexibility as well as coverage expansions through federal waivers has created a large amount of variation from state to state in Medicaid eligibility thresholds. There are states that cover parents with incomes up to 275 percent of the federal poverty level (FPL) while other states require parental income to be below 20 percent FPL to receive Medicaid.
Low-Income Families
Over the years, numerous changes have been made to Medicaid to create more optional coverage groups. Recent changes include the 1996 welfare reform law, which de- linked Medicaid and cash assistance and created a new eligibility category based on state Aid to Families with Dependent Children (AFDC) eligibility standards in effect on July 16, 1996. Known as Section 1931, this provision requires states to cover at least those families with incomes below the 1996 AFDC income limits, regardless of whether they receive cash assistance. In addition, under Section 1931, states have greater flexibility to extend eligibility to more low-income families using any of these three mechanisms: 1) income disregards; 2) asset disregards; and 3) increasing income and asset limits by as much as the increase in inflation since July 1996. Income disregards and asset disregards are both tools that states can use to virtually "ignore" a portion of an individual's income or countable assets, which in effect will allow higher income and asset limits for Medicaid eligibility. There are no limits to these disregards, so states are free to raise effective income limits as high as they choose.
Specific Eligibility Groups
More recently, the Ticket to Work and Work Incentives Improvement Act of 1999 allows states the option to permit individuals with disabilities who are working to maintain their Medicaid eligibility. By May 2004, 29 states had implemented Medicaid buy-programs for working individuals with disabilities. Collectively, these programs are serving approximately 64,000 people with significant disabilities. Of the 29 states that have implemented buy-in programs, 15 have been implemented under the authority of the Ticket to Work Act. In 2000, states were given the option to extend Medicaid eligibility to women who are diagnosed with breast or cervical cancer through a screening program funded by the Centers for Disease Control and Prevention (CDC). All 50 states have approved state plan amendments to cover this group.
State Children's Health Insurance Program (SCHIP)
The State Children's Health Insurance Program (SCHIP) allows states to provide insurance coverage to uninsured children in low-income families that are not otherwise eligible for Medicaid. Enacted in 1997, the program now covers more than four million children. Like Medicaid, states administer the SCHIP program and receive federal matching funds. However, the federal government provides a higher matching rate for SCHIP than for Medicaid.
Under SCHIP, states also have greater flexibility than under Medicaid to define benefits and set cost-sharing requirements. States can use SCHIP funds to expand Medicaid eligibility for children or to establish stand-alone SCHIP programs to provide coverage for children. Fourteen states have opted to use the federal SCHIP matching funds to finance Medicaid eligibility expansions for children; 19 states have created separate SCHIP programs; and 18 states have combination Medicaid and SCHIP programs.
Waivers
In addition to covering mandatory and optional groups under Medicaid and SCHIP, states have used waivers to change federal requirements in these programs and cover more people.
Medicaid/SCHIP Section 1115 Waiver
Section 1115 of the Social Security Act grants the Secretary of the U.S. Department of Health and Human Services broad authority to waive certain federal requirements for the purpose of conducting pilot, experimental, or demonstration projects that are likely to promote the objectives of the program. States have used this federal waiver authority to change their program in ways that would not otherwise be allowable under federal requirements. Many states have used waivers to expand Medicaid eligibility to new groups of people. In addition to eligibility changes, waivers have been used to change other federal requirements such as rules related to the delivery system or benefit package design.
The review process for Section 1115 waivers can be lengthy and the Centers for Medicare and Medicaid Services (CMS-the federal agency responsible for granting the waivers) policy requires that Medicaid waivers must be budget neutral. This means that CMS will not approve waivers that would result in a higher level of federal spending than would have occurred without the waiver. Budget neutrality agreements between the state and federal government are negotiated during the waiver approval process and require a number of assumptions about spending trends and the likely impact of cost-saving features of the proposed waiver.
In 2000, CMS issued guidelines for states in proposing waivers under the SCHIP program. These guidelines required that states seeking to expand coverage through a SCHIP Section 1115 waiver show that they had met the primary goal of SCHIP: providing services to low-income children, enrolling, and serving them. Several states have used SCHIP waivers to expand coverage to parents. While states are already able to cover many parents under Medicaid without a waiver, expanding coverage under SCHIP allows states to receive the SCHIP enhanced federal matching rate.
Under the SCHIP program, each state receives a federal allotment that limits the amount of federal funds available to them. Unlike Medicaid waivers, SCHIP waivers don't have to meet the budget neutrality requirement, however they must limit federal spending to what is available under the state's SCHIP allotment. This feature is known as allotment neutrality.
IN-DEPTH: Section 1115 Waiver
Alcalde, G. "Exploring a New Option: Section 1115 Waivers Under the State Children's Health Insurance Program," National Conference of State Legislatures, April 2001.
Birnbaum, M. "Expanding Coverage to Parents through Medicaid Section 1931," State Coverage Initiatives Issue Brief, May 2000.
CMS Section on 1115 Waivers
Davidoff, A. et al. "Health Coverage for Low-Income Adults: Eligibility and Enrollment in Medicaid and State Programs," Kaiser Commission on Medicaid and the Uninsured, February 2005.
Dubay, L. "Extending Medicaid to Parents: An Incremental Strategy for Reducing the Number of Uninsured," The Urban Institute, June 2000.
Families USA: Waiver Tool Box
Kaiser Commission on Medicaid and the Uninsured, Medicaid Section 1115 Waivers: Current Issues, January 2005.
Kaiser Commission on Medicaid and the Uninsured, Section 1115 Waivers in Medicaid and the State Children's Health Insurance Program: An Overview, July 2001.
Mann, C. et al. "Assessing the Role of Recent Waivers in Providing New Coverage," Kaiser Commission on Medicaid and the Uninsured, December 2003.
Milligan, C. "Section 1115 Waivers and Budget Neutrality: Using Medicaid Funds to Expand Coverage," State Coverage Initiatives Issue Brief, May 2001.
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HIFA Waivers
In August 2001, the U.S. Department of Health and Human Services launched a major new Section 1115 waiver initiative, the Health Insurance Flexibility and Accountability (HIFA) initiative. The goal of HIFA is to encourage new comprehensive state approaches that will increase the number of individuals with health insurance coverage within current level Medicaid and SCHIP resources. The HIFA initiative builds on the 1115 waiver authority to provide states enhanced flexibility and an expedited review process.
Key Elements of a HIFA Demonstration
In order to be considered a HIFA demonstration, a proposal MUST:
- Include a coverage expansion;
- Include a public-private coordination component;
- Set a goal and include a methodology for monitoring changes in the rate of uninsurance;
- Promise to meet maintenance of effort (if a state-funded program is being federalized); and
- Meet a test of budget neutrality (for Medicaid funds) or allotment neutrality (for SCHIP funds).
A HIFA proposal may NOT:
- Reduce services to mandatory Medicaid eligibles
- Provide coverage to individuals with incomes above 200 percent FPL (with certain exceptions).
Under HIFA, a state MAY:
- Reduce benefits and/or increase cost-sharing, including the ability to provide only a primary care benefit package to certain populations;
- Impose enrollment caps;
- Federalize a state-funded program (provided maintenance of effort is met);
- Use unspent SCHIP funds to finance increased coverage; and
- Divert DSH funds to finance increased coverage
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Source: Sachs, T. "HIFA at Age Two: Opportunities and Limitations for States," State Coverage Initiatives Issue Brief, November 2003.
The HIFA initiative continues to require that waivers meet either budget neutrality or allotment neutrality requirements, but permits states to offset coverage expansions in ways that have not been allowed in the past-by redirecting Disproportionate Share Hospital (DSH) funds or changing the benefit design for optional Medicaid populations. HIFA guidelines also broadened the possible uses of SCHIP funds to allow states to cover adults without dependent children. States may also lower the cost of an expansion by scaling back benefits, charging higher cost-sharing, or capping enrollment for the newly eligible groups covered by the waiver.
The Bush Administration has put a particular emphasis on broad statewide approaches that maximize private health insurance coverage options and target Medicaid and SCHIP resources to populations with income below 200 percent FPL.
The other central component of the HIFA initiative is an emphasis on encouraging employer-sponsored insurance. The most common way states have built upon employer- sponsored insurance is by implementing a premium assistance program. Premium assistance allows states to use Medicaid or SCHIP funds to subsidize health coverage purchased through employers or in the individual market. Premium assistance is already an option for states under Medicaid and SCHIP without a waiver, but HIFA provides enhanced flexibility to design these programs.
List of State Waivers
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State |
Medicaid and SCHIP Waiver Description |
Arizona |
HIFA Waiver - In 2001, Arizona obtained a waiver to use Title XXI funds to expand coverage to two populations: (1) adults over age 18 without dependent children and with adjusted net family income below 100 percent FPL; and (2) individuals with adjusted net family income above 100 percent FPL and at or below 200 percent FPL who are parents of children enrolled in the Arizona Medicaid or SCHIP programs, but who themselves are not eligible for either program.
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Arkansas |
Section 1115 Waiver - In 1997, Arkansas received approval for a Medicaid 1115 waiver for their ARKids B program. The waiver expanded eligibility to currently uninsured children through age 18 with family incomes at or below 200 percent FPL. ARKids B included a reduced benefit package, modeled on the Arkansas State Employee and State Teachers plans. The benefits have some limitations on EPSDT diagnostic and treatment services, inpatient mental health services, transportation, and therapy services.
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California |
Section 1115 Waiver - In 2005, California received approval for its Medi-Cal Hospital Uninsured Care 1115 Waiver. This new five-year comprehensive waiver derives from an existing waiver. The California 's 1915(b) Selective Provider Contracting Program (SPCP) has allowed the state to selectively contract with a limited number of hospitals at a prospective per diem rate which is lower than the standard rate paid in the absence of the waiver. In return, the selected hospitals receive preferential or exclusive referrals of Medicaid patients in their geographic area. The most significant real expansion of enrollment will occur in the last several years (2007-2010) of the demonstration when $180 million of the $766 million annual Safety Net Pool allocation is diverted to expand coverage to individuals still uninsured at that time.
HIFA Waiver - In 2002, California received approval from CMS to use its SCHIP allotment to cover parents, relative caretakers, and legal guardians with net incomes at or below 200 percent FPL, who are not eligible for no-cost Medi-Cal. The waiver has not yet been implemented. The waiver also includes a coverage bridge for children after annual re-certification for SCHIP. The waiver allows California to provide a 2-month coverage "bridge" for children after their application is forwarded to Medi-Cal. California received an extension for implementing this waiver program until June of 2007. |
Colorado |
HIFA Waiver - In 2002, Colorado received approval from CMS for a HIFA demonstration to cover adult prenatal coverage under the SCHIP program, CHP+. The waiver, amended in 2005 to increase eligibility, provides coverage to uninsured pregnant women with incomes between 134 percent and 200 percent FPL who are not otherwise eligible for Medicaid and SCHIP.
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Delaware |
Section 1115 Waiver - In 1995, Delaware received approval from CMS to implement the Diamond State Health Plan waiver that allowed the state to implement a mandatory Medicaid managed care program statewide and expand eligibility to low-income Delawareans with incomes up to 100 percent FPL. |
Florida |
Florida Medicaid Reform Waiver - In October 2005, Florida received approval for its Medicaid Reform waiver. The approved waiver will be submitted to the legislature for authority to implement the program. The waiver does not expand eligibility; however, it makes significant changes to the program. The Florida Medicaid Reform Model comprises comprehensive and catastrophic financing mechanisms, an individual enhanced benefit account, or an option to opt-out of Medicaid and direct their Medicaid premium to employer-sponsored insurance. The program will be initially implemented in two counties and after one year expand to three additional counties. Individuals covered under the Medicaid Reform proposal will have their choice of managed care plans and benefit packages. |
Hawaii |
Section 1115 Waiver - In 1993, Hawaii received approval to expand Medicaid for the QUEST (Q uality care, ensuring U niversal access, encouraging E fficient utilization, S tabilizing costs, and T ransforming the way health care is provided to public clients) demonstration. The implementation of the QUEST section 1115 program allowed the state to use a managed care delivery system to create efficiencies in the Medicaid program to and enable the extension of coverage to individuals who would otherwise be without insurance. Since 1994, the QUEST program has expanded Medicaid to cover p regnant women up to 185 percent FPL; all children age 19 with incomes up to 200 percent FPL; and all adults with incomes at or below 100 percent FPL.
Hawaii also has a program called QUEST-Net, a medical assistance program which was developed mainly for people who no longer qualify or voluntarily requested termination of Hawaii QUEST or Medicaid Fee-For-Service. The program provides a full Medicaid benefit for children with family incomes above 200 percent but less than 300 percent FPL who were previously enrolled in either QUEST or Medicaid fee-for-service and whose income or assets rise above the eligibility limits; and non-categorical individuals with incomes at or below 100 percent of FPL who meet the Medicaid asset limits. QUEST-Net also offers a limited benefit package for adults with incomes at or below 300 percent FPL who have lost Medicaid eligibility.
The extension of Hawaii 's Section 1115 demonstration in January 2006, continues the State's current coverage, while also expanding coverage to children from 200 percent through 300 percent FPL using Title XXI funding. Hawaii will also expand coverage to adults up to 100 percent FPL, who are not otherwise eligible for coverage through the QUEST Adult Coverage Expansion (QUEST-ACE). |
Idaho |
HIFA Waiver - In November 2004, the Centers for Medicare and Medicaid Services (CMS) approved Idaho's Health Insurance Flexibility and Accountability (HIFA) waiver application to create the Idaho Access Card-a program intended to increase private health insurance affordability for low-income individuals. To accomplish this, Idaho Medicaid offers premium assistance to cover children in families whose gross annual income is above mandatory Medicaid levels but below 185 percent FPL.
Idaho officials also submitted a Title XXI state plan amendment to create a separate State Children's Health Insurance Program-CHIP-B-in conjunction with its HIFA waiver proposal. The CHIP-B program was approved in June and implemented in July 2004, and is available to children whose parents earn incomes ranging from 150 to 185 percent FPL. Under the Idaho Access Card program, parents of children who qualify for SCHIP-funded coverage have a choice between enrolling their children in SCHIP or the premium-assistance program. The latter allows parents to add their eligible dependents to their existing employer-based insurance plan (or to an individual insurance policy) and have the state pay up to $100 toward the amount of the dependent's premium.
The Idaho Access Card program also offers premium assistance to adults whose gross annual income is below 185 percent FPL and who are employed by an Idaho small business, or who are the spouse of an employee. The program is capped at 1,000 adults; it began enrollment in July 2005. As of fall 2006, approximately 300 adults were enrolled in the program.
In 2006, Idaho undertook a Medicaid reform initiative. Idaho 's separate SCHIP program became a Medicaid look-alike and three Benchmark Benefit packages were approved by CMS under authority of the Deficit Reduction Act (DRA) of 2005. This allowed the state to split the Medicaid and SCHIP populations into three major benefit plans:
- Low-income children and working-age adults: the Medicaid Basic Plan
- Individuals with disabilities or special health needs: the Medicaid Enhanced Plan
- Elders or those otherwise dually eligible for Medicaid and Medicare who are enrolled in certain Medicare Advantage plans: the Medicare-Medicaid Coordinated Plan
Upon enrollment or annual re-enrollment into Medicaid or SCHIP, enrollees are placed into the Plan that best fits their health needs. Enrollees are given a health screening and placed into a primary care case management system (PCCM). Idaho has three different systems of triggers that move an individual into the Enhanced Plan: physician diagnosis of special health needs; utilization of mental health services up to the limits in the Basic Plan; or receiving certain other forms of assistance from the Idaho Department of Health and Welfare. Any one of these three triggers would move the enrollee into the Enhanced Plan. Both of these benefit packages (Medicaid Basic Plan and Medicaid Enhanced Plan) remain fee for service.
The final benefit plan and enrollment category is for persons eligible for both Medicare and Medicaid who are enrolled in participating Medicare Advantage plans. In an effort to coordinate services with Medicare Part D, Idaho has created a partially capitated system with major insurance carriers that provide Part D services. Idaho will pay a capitated rate per enrollee to carriers for integrated services in addition to Medicare-excluded drugs, and will also provide fee for service "wrap-around" benefits. The new coordinated plan will begin in Spring 2007. |
Illinois |
HIFA waiver - In 2002, Illinois received approval from CMS for a HIFA waiver which increases KidCare (SCHIP) coverage from 185 percent to 200 percent FPL. The waiver also phases in coverage of parents of children eligible for SCHIP up to 185 percent FPL. Illinois operates a premium assistance program - KidCare Rebate - under its HIFA waiver, which allows eligible children and parents to choose to enroll in employer-sponsored insurance. The program, called the "informed choice model," pays $75 per child, per month for private coverage and parents can switch back to KidCare at any point. As of January 2006, the state has phased in coverage for parents up to 185 percent FPL. |
Iowa |
Section 1115 Waiver - Approved in July of 2005, the new IowaCare program expands a limited set of Medicaid benefits to all adults (19 - 64), including parents of Medicaid or SCHIP eligible children, using a limited provider network. The program is a capped, non-entitlement and converts uncompensated care funds into insurance coverage for adults. |
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In September 2006, Kansas received approval from CMS to establish a benchmark benefit for its Working Healthy Ticket to Work Medicaid Buy-In program. The benchmark benefit was approved as a state plan amendment under DRA authority. Working Healthy provides working individuals with disabilities who have incomes below 300 percent FPL the State Plan Medicaid coverage, in addition to the following benefits: Personal assistance services, which can be self-directed or agency directed, including a “Cash and Counseling” model; Assessment to determine personal assistance and related service needs; Independent living counseling; and Assistive services. |
Maine |
HIFA Waiver - In 2002, Maine received approval from CMS for a HIFA waiver to expand health insurance coverage to childless adults with incomes at or below 125 percent FPL by redirecting a portion of its disproportionate share hospital allocation to cover this population. Coverage was expanded in 2 phases, covering childless adults to 100 percent FPL in the first phase, and a plannedexpanding to 125 percent FPL enacted as part of the Dirigo Health Reform was never implemented as the DHHS had reached its budget neutrality cap. The expansion was later repealed by the Maine legislature. |
Maryland |
Section 1115 Waiver - Maryland initially received approval for a Health Reform Demonstration in 1996 for its HealthChoice managed care program. There have been several amendments to the original waiver and it was renewed in 2005. As of June 2005, the waiver included expansions in coverage for the Maryland Pharmacy Programs, family planning services, Employed Persons with Disabilities Program, and the Maryland Primary Adult Care program. Under the Maryland Primary Adult Care program, adults up to 116 percent FPL who are ineligible for Medicaid and Medicare will receive primary care, outpatient mental health, and pharmacy services. The Maryland Primary Adult Care program began enrollment in July 2006. The Employed Persons with Disabilities Program provides full Medicaid coverage to disabled individuals with incomes up to 300 percent FPL and began April 2006. |
Massachusetts |
Section 1115 Waiver - In 1995, Massachusetts received approval for the MassHealth Statewide Demonstration Project, which was created to make health insurance available to a number of previously uninsured individuals. In addition to the traditional Medicaid population, the demonstration provides coverage for the uninsured, the long-term unemployed, the working and non-working disabled, low-income workers and their families, individuals with HIV, and women with breast and cervical cancer. Children in families with income at or below 200 percent FPL receive MassHealth through both demonstration and SCHIP provisions.
The MassHealth demonstration is also designed to stimulate private employers to offer affordable health insurance to their low-income workers. To this end, MassHealth offers insurance payments to small employers (< 50) who offer comprehensive health insurance to low-income workers for which the employers pay at least 50 percent of the premium. In January 2005, the MassHealth demonstration received a 3-year extension through June 30, 2008. Under the extension, the program will be used to reimburse for primary care services for the uninsured and encourage the utilization of services that can prevent the need for more costly hospital services for these individuals.
A Safety Net Care Pool will be established using a combination of demonstration savings, in addition to the Commonwealth's Medicaid DSH allotment, to pay for subsidies towards health insurance for low income residents not eligible for Medicaid. |
Michigan |
HIFA Waiver - In 2004, the state received approval from CMS to expand health insurance coverage to childless adults with incomes at or below 35 percent FPL by utilizing unspent SCHIP funds. The Adults Benefits Waiver program was designed to provide new beneficiaries with a benefits package that is less broad than Michigan 's standard Medicaid or SCHIP coverage. In order to meet the HIFA requirements for coordinating with private insurance, Michigan is also offering to those beneficiaries with access to employer-sponsored insurance a voucher that is equal in value to the state's cost of providing service. Enrollment in the employer-sponsored plan is in lieu of receiving benefits through the state program. |
Minnesota |
SCHIP Section 1115 Waiver - In 2001, Minnesota received approval under a Section 1115 waiver to use Title XXI funds to cover parents and caretaker relatives of Medicaid and SCHIP eligible children with family incomes between 100 percent and 200 percent FPL. These individuals are subject to premiums established on a sliding scale. This is a component of the state's MinnesotaCare program.
Health Reform Demonstration - In 1995, Minnesota received approval to implement a Health Reform Demonstration. Through this initiative, children and pregnant women up to 275 percent FPL who were previously covered under the state-funded MinnesotaCare program became part of a Medicaid waiver component of the MinnesotaCare program. Under subsequent modifications of the waiver, Medicaid waiver coverage in MinnesotaCare is available to parents in families with gross incomes up to 275 percent FPL (but not above $50,000 per year). These individuals are subject to premiums based on a sliding scale. In Minnesota, individuals that are eligible for Medicaid may instead choose to join MinnesotaCare and pay a premium. |
Mississippi |
Section 1115 Waiver - In 2004, Mississippi received a waiver to provide Medicaid benefits to a select group of the formerly covered Poverty Level Aged & Disabled (PLAD) population after services had been discontinued. This waiver extends Medicaid coverage to the most needy of that population, those who are aged and disabled individuals with incomes up to 135 percent FPL who do not have Medicare coverage and to those who are aged and disabled individuals with income up to 135 percent of the FPL who have Medicare coverage but are end-stage renal disease patients on dialysis, cancer patients receiving chemotherapy or radiation, transplant patients receiving anti-rejection drugs, and/or patients with mental illness receiving anti-psychotic medications.
Mississippi received CMS approval for an SCHIP employer buy-in program, but implementation has been put on hold indefinitely. |
Missouri |
Section 1115 Waiver - In 1998, Missouri received approval from CMS to implement Missouri 's State Children's Health Insurance Program (SCHIP), MC+ For Kids, through a waiver under Section 1115 of the Social Security Act and a Title XXI plan. The approved Section 1115 Demonstration Waiver is a statewide program that provides MC+ to eligible children up to age 19 and some uninsured adults up to 300 percent FPL. The Section 1115 Demonstration Waiver allowed the state to expand eligibility to parents transitioning off welfare up to 300 percent of FPL as well as several other specific groups of parents. Effective July 1, 2002, coverage under the Section 1115 Demonstration Waiver was eliminated for uninsured non-custodial parents below 125 percent of FPL who were paying child support and uninsured non-custodial parents actively participating in Missouri 's Parents' Fair Share Program. Effective July 1, 2005, adults transitioning off welfare are no longer eligible for an additional year of coverage under Missouri 's Section 1115 Demonstration Waiver. |
Montana |
Section 1115 Waiver - In January 2004, CMS approved a Medicaid Section 1115 waiver that would allow Montana to provide a limited Medicaid benefit package of optional services for Medicaid eligible parents aged 21 - 64 who are not pregnant or disabled. The optional services were excluded to align coverage with typical employer-sponsored insurance. This waiver was based on a previous Montana waiver, which provided a limited Medicaid benefit package to adults who are neither disabled nor pregnant, under the authority of Montana 's welfare reform waiver in 1996. |
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Section 1115/HIFA Waiver – On November 2, 2006, CMS approved Nevada 's Title XXI (SCHIP) Section 1115/HIFA Waiver. This demonstration will provide health care coverage to pregnant women with family incomes above 133 percent FPL up to and including 185 percent FPL. Parents, caretaker relatives, and legal guardians with family incomes below 200 percent FPL will receive coverage through employer-sponsored insurance (ESI) and premium assistance. |
New Jersey |
Section 1115 Waiver – In 2001, the state received approval from CMS to implement a waiver demonstration that extended coverage to parents of Medicaid or SCHIP eligible children with incomes up to 200 percent FPL and pregnant women with incomes between 185 percent and 200 percent FPL. Under this waiver, Medicaid covered parents with incomes up to 133 percent FPL and SCHIP covered parents between 134 percent and 200 percent FPL. Although parent enrollment was capped as of June 14, 2002, parent enrollment up to 100 percent FPL was initiated again on September 1, 2005. This increased to 115 percent FPL on September 1, 2006, and will further increase to 133 percent FPL on September 1, 2007.
HIFA Demonstration Waiver - In 2003, New Jersey received approval from CMS to modify the SCHIP 1115 waiver. The waiver modification standardized coverage to uninsured parents and relative caretakers of children in the Medicaid and SCHIP programs whose incomes are at or below 133 percent FPL to that of the parents between 134 percent and 200 percent FPL, which was a standard commercial benefit package. |
New Mexico |
HIFA Demonstration - In 2002, New Mexico received a HIFA waiver to expand coverage to low-income uninsured working adults. In July 2005, the state implemented the New Mexico State Coverage Insurance (SCI). This is a public-private partnership resulting in the creation of a new employer-sponsored insurance program. The state contracts with managed care organizations to provide the product.
The program is available to low-income, uninsured, working adults with family income below 200 percent of FPL. An individual may enroll through their employer, as a self-employed individual, or as an individual without employer-sponsored insurance. The premium is paid through contributions from the employer and employee in combination with state and federal funds. Individuals and the self-employed must pay the employer as well as the employee portion of the premium. The benefit package is a comprehensive health care benefit with a claims benefit maximum. The SCI plan features cost-sharing designed to ensure that low-income participants would have access to care. Enrollment in the program began July 2005 and, as of August 2006, the program covered over 5,000 lives.
To learn more about the New Mexico State Coverage Insurance program, read SCI's Profile in Coverage.
To learn more about the NMSCI HIFA Waiver, read SCI's HIFA Waiver Comparison Chart.
Section 1115 Waiver - In 1998, New Mexico received approval for a SCHIP demonstration for implementation of co-payment requirements and a 6-month period of SCHIP ineligibility in instances where an applicant's health insurance was voluntarily dropped. New Mexico SCHIP covers children up to age 19 in families with income between 185 percent and 235 percent FPL. |
New York |
Section 1115 Waiver - In 1997, New York 's section 1115 Medicaid demonstration, the Partnership Plan, was approved. The demonstration moved approximately 2 million Medicaid beneficiaries from a primarily fee-for-service delivery system to a mandatory managed care environment.
In 2001, the Family Health Plus (FHPlus) amendment was approved. FHPlus expanded health insurance to childless adults to 100 percent FPL, and expanded coverage to parents to 150 percent FPL. Prior to 2001, these populations were covered in the state's Safety Net program. FHPlus is delivered via managed care organizations and has a less comprehensive benefit package versus traditional Medicaid.
In 2002, the waiver was amended to include a family planning demonstration which expands family planning services to individuals with net incomes at or below 200 percent FPL. |
Oklahoma |
HIFA Waiver - On September 30, 2005, CMS approved the Oklahoma Premium Assistance Plan under the HIFA initiative. The Oklahoma Health Care Authority submitted the waiver seeking to cover an additional 50,000 residents of the State of Oklahoma with incomes at or below 185 percent FPL in the Oklahoma Employer/Employee Partnership for Insurance Coverage (O-EPIC).
The increased coverage will be funded by state general fund revenues generated by a tobacco tax, along with federal matching funds under Title XIX and employer and employee contributions. Eligible employer-sponsored insurance populations include adults who work for small employers and have incomes above the Medicaid standard, but no more than 185 percent FPL and their spouses. O-EPIC will begin enrollment in November 2005.
Eligible state-sponsored insurance populations include self-employed, unemployed currently seeking work, workers who are not eligible to participate in their employer's small group health plan, and workers (and their spouses) whose employers do not offer a group health plan and have incomes above the Medicaid standard but no more than 185 percent FPL. Other eligible state-sponsored insurance populations include the working disabled who have incomes above the Medicaid standard, but no more than 200 percent FPL. Enrollment will begin in spring 2006. |
Oregon |
Section 1115 Waiver - Oregon initially received approval from CMS to implement a waiver demonstration for the Oregon Health Plan (OHP) in 1993. At that time, the state expanded coverage to most Oregonians below 100 percent FPL and to children and pregnant women up to 170 percent FPL.
Among other things, the waiver allowed Oregon to implement a prioritized list of conditions and treatments for Medicaid benefits under the OHP that ranks health services based on the "comparative benefit to the population to be served."
HIFA Waiver - In 2002, the state applied for both an 1115 and a HIFA waiver to amend and expand the OHP (the state's existing 1115 waiver) to create the second iteration of the Oregon Health Plan or OHP2. OHP2 sought to expand coverage to individuals with incomes below 185 percent FPL. The effort separated the Medicaid program into two benefit packages-OHP Plus and OHP Standard.
- The OHP Plus benefit package and cost-sharing structure is similar to the original OHP and serves low-income seniors, people with disabilities, families meeting the eligibility criteria for Temporary Aid to Needy Families (TANF), and children and pregnant women.
- The OHP Standard benefit package, designed for Oregon's expansion population (who are adults, 19 to 64 years of age up to 100 percent FPL), implemented in February 2003, is leaner in benefits and includes significant co-pays. Premiums were increased for those enrolled in OHP Standard and administrative rules were tightened, including a six-month lockout for nonpayment of premiums.
The OHP2 waiver changes also resulted in including the state's premium subsidy program, the Family Health Insurance Assistance Program (FHIAP), under Medicaid so it could receive federal match for what had been previously funded with only state dollars.
In July 2004, the state received approval for a further modification. The amendment allowed the state to retain the eligibility level for OHP Standard at 100 percent FPL and allowed for a redefined OHP Standard benefit package that will include a core set of services and, depending upon available state funds, a limited inpatient hospital benefit and a hospice benefit. Included with this approval is the flexibility for the state to reduce and/or add services as long as the core set of services continues to be offered. Further, the amendment allowed the state to expand health care to uninsured children with family income from 185 percent FPL to 200 percent FPL under Title XXI and expand coverage to FHIAP participants with income from 185 percent to 200 percent FPL under both Title XIX and Title XXI. As of October 2006, the expansion for children and families to 200 percent FPL has not been implemented.
In April 2006, the Oregon received approval for two more demonstration amendments. The state was allowed to extend the eligibility period for SCHIP from six months to 12 months. In addition, the state was allowed to amend the premium policy for individuals enrolled in OHP Standard by exempting from the premium requirement those with incomes at or below 10% FPL and by eliminating the six-month lock-out for nonpayment of premiums for those with incomes above 10% FPL. Individuals above 10% of the federal poverty level must pay all past due premiums before they can qualify for a new eligibility period. These demonstration amendments went into effect in June 2006. |
Rhode Island |
Section 1115 Waiver - After receiving approval from CMS in 1993, the state implemented the Rhode Island RIte Care demonstration, which provides families on the Family Independence Program and eligible uninsured pregnant women, parents, and children up to age 19 with comprehensive health coverage. The demonstration expanded coverage to parents up to 185 percent FPL and to children and pregnant women up to 250 percent FPL.
SCHIP 1115 Demonstration - In 2001, the state received approval to implement a demonstration that would allow the state to claim Title XXI funding for parents of Medicaid or SCHIP-eligible children with incomes between 100 percent and 185 percent FPL and pregnant women with incomes between 185 percent and 250 percent FPL.
RIteShare - The state operates a premium assistance program available to those who qualify for Medicaid coverage. For more information on premium assistance programs, visit the SCI-funded Premium Assistance Toolbox. RIteShare, the state's premium assistance program for those eligible for Medicaid helps families get health insurance coverage through their employer (or spouse's employer). If a family qualifies, RIte Share will pay for all or part of the employee's share of the health insurance premium. RIte Share also pays for co-payments in the employer's health insurance plan. |
Tennessee |
Section 1115 Waiver - On January 1, 1994, Tennessee began a new health care reform program called TennCare. This program essentially replaced the Medicaid program in Tennessee. TennCare was designed as a managed care model. It extended coverage to uninsured and uninsurable persons who were not eligible for Medicaid. The TennCare program was implemented as a five-year demonstration program approved by the entity now known as the Centers for Medicare and Medicaid Services (CMS). The program received several extensions after the original expiration date of December 30, 1999. In July 2002, Tennessee began a new five-year TennCare demonstration program. The state was granted a waiver amendment approval on March 24, 2005, to end coverage of adults in the expanded eligibility categories - i.e., uninsured and uninsurable adults. TennCare continues to cover approximately 119,000 non-Medicaid eligible children.
CoverKids - Creates a separate, stand-alone health care program for all uninsured children under the age of 18 in Tennessee which will be a State Children's Health Insurance Program (SCHIP). The program combines state funds and Title XXI funds from the federal government to cover children and pregnant women up to 250 percent FPL. Eligibility is layered over current TennCare levels. CoverKids also offers a buy-in program for children who do not qualify for the subsidized product. |
Utah |
Section 1115 Waiver - Utah's Primary Care Network is a statewide section 1115 demonstration to expand Medicaid coverage. The demonstration uses increased flexibility with current state plan eligibles to fund a Medicaid expansion to 25,000 uninsured adults between the ages of 19 - 64 with incomes up to 150 percent FPL. The expansion provides primary care and preventive services to low-income adults who would otherwise lack health insurance. The state's SCHIP program covers children under age 19 with incomes up to 200 percent FPL. The state's premium assistance program called Covered at Work has been replaced with the Utah 's Premium Partnership for Health Insurance (UPP). The UPP program draws federal matching funds under the Primary Care Network waiver.
To learn more about the Utah Primary Care Network, read SCI's Profile in Coverage. |
Vermont |
Section 1115 Waiver - In September of 2005, the Centers for Medicare & Medicaid Services (CMS) approved Vermont's new Section 1115 waiver, the Global Commitment to Health. Vermont will manage its Medicaid program within a five-year, $4.7 billion budget and the state will be financially at risk to keep expenditures below this target.
Vermont has chosen to accept a capped federal contribution, with a 9 percent inflationary trend adjustment, in exchange for increased program flexibility, the authority to alter pieces of the benefit package, increase participant cost sharing, and flexibility to implement new cost-control strategies. The Vermont Office of Health Care Access (OVHA) will convert into a statewide public managed care organization and has the authority to use any additional funds to reduce the uninsured rate.
Vermont Health Access Plan (VHAP) - In 1995, Vermont received Section 1115 authority to implement VHAP. After various amendments, VHAP covers parents to 185 percent FPL, children to 300 percent FPL, and childless adults to 150 percent FPL. The VHAP population is now part of the "Global Commitment to Health" Section 1115 waiver approved in September 2005. |
Washington, D.C. |
Section 1115 Waiver - In 2002, The District of Columbia received approval from CMS to implement a Medicaid Section 1115 demonstration to provide primary and preventive health care services to non-disabled adults, between the ages of 50 to 64, with incomes at or below 50 percent FPL, who are not custodial parents or resident care takers of children under the age of 19 (i.e., childless adults). The waiver was approved for a five-year period, with an annual enrollment cap of 2,400. |
Wisconsin |
Section 1115 Waiver - In 1999, Wisconsin got approval from CMS to implement the Wisconsin BadgerCare program, a statewide Medicaid expansion that utilized the managed care delivery system to provide health care to both SCHIP and Medicaid beneficiaries while at the same time expanding coverage to new populations. The demonstration extended coverage to c hildren and custodial parents of eligible children with net family incomes through 185 percent FPL. Once a family is eligible, they retain benefits up to 200 percent FPL. |
Premium Assistance
Premium assistance is a health insurance purchasing strategy in which a state uses Medicaid or SCHIP funds to pay for a portion of the premium costs of employer-sponsored insurance (ESI) for eligible populations. Many states have expressed interest in pursuing premium assistance because they want to take advantage of the contributions that employers make toward the cost of employee health insurance coverage. Some states also place value on using the private sector to provide coverage, rather than expanding public programs. Visit the Premium Assistance Toolbox for more information. |
The Deficit Reduction Act of 2005
In February 2006, President George W. Bush signed the Deficit Reduction Act of 2005, one of the most significant changes to the Medicaid program in its 40 year history. The DRA is projected to reduce federal Medicaid spending by $11.5 billion over five years and $43.2 billion over 10 years. The DRA provides states with new flexibility to make certain changes, which would have previously required waiver authority, through the more streamlined state plan amendment process. The DRA does not, however, provide states with a new vehicle for expanding coverage with the exception of giving states the option to allow parents of certain children with disabilities to “buy-in” to Medicaid for their children if they have a family income at or below 300 percent FPL. In fact, the flexibility provided under the DRA is limited to groups covered prior to 2006.
During 2006, West Virginia, Kentucky, Idaho, and Kansas received federal approval for their reform proposals under DRA authority. All of these proposals use the flexibility in benefit design and cost sharing to tailor benefit packages to specific populations and also encourage greater consumer involvement in health care. For an in-depth discussion on the flexibility granted to states by the DRA, please consult the following resources:
IN-DEPTH: Deficit Reduction Act of 2005
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State |
Deficit Reduction Act Authority Reform |
Idaho |
In 2006, Idaho undertook a Medicaid reform initiative. Idaho 's separate SCHIP program became a Medicaid look-alike and three Benchmark Benefit packages were approved by CMS under authority of the Deficit Reduction Act (DRA) of 2005. This allowed the state to split the Medicaid and SCHIP populations into three major benefit plans:
- Low-income children and working-age adults: the Medicaid Basic Plan
- Individuals with disabilities or special health needs: the Medicaid Enhanced Plan
- Elders or those otherwise dually eligible for Medicaid and Medicare who are enrolled in certain Medicare Advantage plans: the Medicare-Medicaid Coordinated Plan
Upon enrollment or annual re-enrollment into Medicaid or SCHIP, enrollees are placed into the Plan that best fits their health needs. Enrollees are given a health screening and placed into a primary care case management system (PCCM). Idaho has three different systems of triggers that move an individual into the Enhanced Plan: physician diagnosis of special health needs; utilization of mental health services up to the limits in the Basic Plan; or receiving certain other forms of assistance from the Idaho Department of Health and Welfare. Any one of these three triggers would move the enrollee into the Enhanced Plan. Both of these benefit packages (Medicaid Basic Plan and Medicaid Enhanced Plan) remain fee for service.
The final benefit plan and enrollment category is for persons eligible for both Medicare and Medicaid who are enrolled in participating Medicare Advantage plans. In an effort to coordinate services with Medicare Part D, Idaho has created a partially capitated system with major insurance carriers that provide Part D services. Idaho will pay a capitated rate per enrollee to carriers for integrated services in addition to Medicare-excluded drugs, and will also provide fee for service “wrap-around” benefits. The new coordinated plan will begin in Spring 2007.
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Kansas |
In September 2006, Kansas received approval from CMS to establish a benchmark benefit for its Working Healthy Ticket to Work Medicaid Buy-In program. The benchmark benefit was approved as a state plan amendment under DRA authority. Working Healthy provides working individuals with disabilities who have incomes below 300 percent FPL the State Plan Medicaid coverage, in addition to the following benefits: Personal assistance services, which can be self-directed or agency directed, including a “Cash and Counseling” model; Assessment to determine personal assistance and related service needs; Independent living counseling; and Assistive services.
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Kentucky |
While not a coverage expansion, Kentucky has undertaken a redesign of its Medicaid program. In May 2006, Kentucky received state plan amendment approval from CMS to move forward on plans to redesign its Medicaid program using DRA flexibility. The new plan, KyHealth Choices, offers four different benefit packages tailored to specific populations, increases cost sharing, and expands access to community-based long-term care. The new targeted benefit plans replace the Medicaid benefit package with “Secretary-approved” coverage. The four plans are:
Global Choices: Global Choices is designed for pregnant women, working parents up to 68 percent FPL, foster children, medically fragile children, Supplemental Security Income-related groups, and women with breast and cervical cancer. Global Choices covers basic medical services with new benefit limits and increased cost sharing. Long-term care services are excluded.
Family Choices: Family Choices is designed for most children, including children enrolled in Kentucky 's SCHIP program. Family Choices offers the same benefit package as Global Choices except there are no prescription drug limits and there is a higher vision care maximum benefit.
Optimum Choices: For individuals with developmental disabilities and mental retardation in need of long-term care services, Optimum Choices covers all the benefits in Global Choices as well as three levels of long-term care services.
Comprehensive Choices: For the elderly and individuals with disabilities in need of nursing facility level care, Comprehensive Choices offers all the benefits of Global Choices plus two levels of long-term care, including services offered through the state's current home and community-based services waivers.
Kentucky also implemented new cost sharing requirements in June 2006. There are no co-pays for preventive services, and pregnant women and mandatory children, are exempt from cost sharing. KyHealth Choices includes new benefit limits; however, services beyond the benefit limits may be approved through a prior authorization process. KyHealth Choices also includes an employer-sponsored insurance option. Enrollees can choose to receive a subsidy for private plans that meet the state employee plan benchmark and certain “economy and efficiency” criteria, but there is no wrap-around coverage. Enrollees can move back to a Medicaid plan at any time. The program also includes “Get Healthy Benefits” that allow individual members with specific diseases to access additional benefits, such as vision, dental, smoking cessation, and nutrition visits, if they participate in a disease management program for one year. Enrollees have six months to use their new benefits. Benefits are lost after disenrollment from Medicaid.
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West Virginia |
In May 2006, West Virginia received CMS approval to move forward on plans to redesign its Medicaid program. Taking advantage of the flexibility outlined in the DRA, West Virginia utilized the state plan amendment process. A four-year, phased in implementation began in July 2006. The West Virginia reform streamlines eligibility and moves healthy children and parents into one of two plans:
- Basic Plan: The plan covers all mandatory and some optional services, but benefits are more limited than the state's previous Medicaid benefits package. Children continue to receive services under the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit. Enrollees can access additional benefits covered by the Enhanced Plan by signing a member agreement.
- Enhanced Plan: For individuals who have signed a member agreement, this plan covers all the services included in the Basic Plan plus mental health services, diabetes care, and prescription drugs above the four-drug limit in the Basic Plan. The Enhanced Plan is comparable to the state's previous Medicaid benefits package.
The cornerstone of West Virginia 's plan is the member agreement and the Healthy Rewards pilot program. Enrollees who sign a member agreement, a ‘personal responsibility contract,' are enrolled in the Enhanced Plan and receive a fixed amount of credits per quarter in a Healthy Rewards account. The credits can be used to cover medical and pharmaceutical co-pays and bonus credits are added for meeting health goals. Individuals who do not meet their responsibilities are moved to the more limited Basic Plan. |
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Children age 6 and older below 100% FPL