Medicaid Swing States: Where Are They Now?

by Adrianna McIntyre

There’s no hard “deadline” for the Medicaid expansion, since it only became optional after the Supreme Court decision last June. Still, it needs to be passed by state legislators and written into budgets—and for many states, the 2014 budget window is closing. The federal match schedule is fixed, so there’s risk of forgoing a year of full federal funding if they decided to expand in the future. A number of states are still grappling with the issue; others have expansion plans that hinge on waiver for special demonstrations. Here’s a quick update on a few of those states.

ARKANSAS. The state’s contentious “private option” passed a few months ago, but still needs to receive a waiver from the feds. Obligatory recap: Arkansas will be using Medicaid funds to purchase insurance for most of the expansion population on the state exchange. As always, David Ramsey’s got the goods. Arkansas officials anticipate finishing a draft of the waiver application this month, with it available for public comment—as required by law—in July (hurray!), and approval hoped for in August. Open enrollment on the exchanges is supposed to start in October.

The biggest development is that the state doesn’t intend to have competitive bidding for exchange plans available to the Medicaid population. What does that mean? Well, with typical exchange plans, the subsidy an individual receives (depending on their income) is pegged to the second-cheapest silver plan available on their exchange. Arkansas, at least for 2014, isn’t planning to peg premium contributions to any particular price point; those receiving coverage through the private option will be able to select any available silver plan, with Medicaid picking up the tab. This could create uncertainty in projecting costs for the waiver application, which has a “budget neutrality” requirement. Will this uncertainty make HHS balk? It’s too soon to tell.

IOWA. We wrote back in April about how Gov. Terry Branstad had hoped to negotiate an expansion of Iowa’s Medicaid up to 100% FPL without accepting new federal dollars. But in recent weeks, the state legislature has come around to a compromise where Iowa would opt into the full expansion. Under the terms of the agreement, Iowans up to 100% FPL would receive a health plan that would reflect state employee health benefits. The 101-138% FPL population would be able to use premium assistance on the state exchange (think Arkansas). Naturally, this would have to be done under an 1115 waiver.

However, aspects of Iowa’s proposal seem to contradict guidance issued by HHS in the past few months. Under the “Healthy Iowa Plan”, those residents below the poverty line could be subject to cost-sharing requirements up to 2% of income; I’m genuinely unsure how the agency would react to this requirement [1]. I do think that they’ll take exception to Iowa’s explicit omission of dental, vision, and wraparound benefits (ie: transportation services for care).

MICHIGAN. State conservatives floated a controversial idea for opting into the Medicaid expansion: do it fully and through the state’s traditional program—predominantly administered through managed care organizations—but limit benefits to the four years for the newly-eligible. This would hypothetically be done under a waiver along with some other tweaks (including cost-sharing requirements that might also prove thorny in the waiver process). The notion that HHS would approve such a proposal was met with skepticism by policy wonks—and by Gov. Rick Snyder, who has expressed support for the expansion. Last week, Snyder told the Associated Press he’s still hopeful that he can broker an agreement with the Michigan legislature on the Medicaid front. A budget is expected to pass next week, and it’s hard to say at this point whether appropriations will be included for the expansion.

ARIZONA. Forget money, Gov. Jan Brewer has put her veto where her mouth is. The governor, a Republican who supports the Medicaid expansion, has refused to sign off on new laws until the state legislature takes up the 2014 budget and Medicaid expansion—a debate with a hard deadline under the Arizona constitution. And she’s followed through, vetoing at least five new bills that have crossed her desk. So far, the state Senate has passed the bill, but the House hasn’t, and they only have a month left to reconcile that. There’s been some talk of holding a referendum if the Medicaid expansion does pass, but that faces its own impediments.

Footnotes

1. Those below 100% FPL are subject to extra cost-sharing protections, compared to those who are 100-138% FPL. It’s been awhile since I’ve looked at the Medicaid statute, so I’m not sure whether “2% income” might be permissible under waiver. In guidelines for exchange premium subsidies, KFF indicates that those below the poverty line receive Medicaid or might be expected to contribute up to 2% income toward an exchange premium. Depending on how Iowa structures their expansion, that level of cost-sharing might work. 

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Adrianna is a graduate student in public policy & public health at the University of Michigan. Follow her on Twitter @onceuponA.

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