Medicaid Waivers, the MMA & States Alan Weil Executive Director National Academy for State Health Policy Briefing sponsored by The Alliance for Health Reform & The Kaiser Commission on Medicaid and the Uninsured April 4, 2005

Three Types of Waivers Section 1915(b): statewideness, comparability, freedom of choice Section 1915(b): statewideness, comparability, freedom of choice Section 1915(c): home and community- based services (HCBS) Section 1915(c): home and community- based services (HCBS) Section 1115: research and demonstration Section 1115: research and demonstration

Waivers and Budget Neutrality The requirement that a waiver not increase the cost to the federal government is a matter of long-standing practice, not law. The requirement that a waiver not increase the cost to the federal government is a matter of long-standing practice, not law. Sources of savings to offset increases in spending include managed care, reprogramming of disproportionate share hospital (DSH) funds, reallocating unspent SCHIP funds, and scaling back benefits Sources of savings to offset increases in spending include managed care, reprogramming of disproportionate share hospital (DSH) funds, reallocating unspent SCHIP funds, and scaling back benefits

The Important Role of Waivers Central to the advent and spread of managed care for Medicaid enrollees Central to the advent and spread of managed care for Medicaid enrollees Have completely redefined the scope of long-term care services within Medicaid Have completely redefined the scope of long-term care services within Medicaid Enabled expansions to otherwise ineligible populations (e.g., childless adults) Enabled expansions to otherwise ineligible populations (e.g., childless adults) Allow for creative approaches (e.g., Oregon priority-setting) Allow for creative approaches (e.g., Oregon priority-setting)

State Viewpoint on Waivers Long-standing NGA policy supports allowing replication without going through waiver process Long-standing NGA policy supports allowing replication without going through waiver process Governors regularly object to having to come to Washington on bended knee for permission to run their programs as they see fit Governors regularly object to having to come to Washington on bended knee for permission to run their programs as they see fit Efforts to create enforceable timelines in waiver process have not succeeded Efforts to create enforceable timelines in waiver process have not succeeded

States and the MMA States as employers States as employers States as administrators of Medicare means testing States as administrators of Medicare means testing States as funders of Medicare (clawback) States as funders of Medicare (clawback) States as administrators of Medicaid States as administrators of Medicaid

Medicaid and the MMA On January 1, 2006, 6 million dual eligibles who have received their prescription drugs through the Medicaid program will no longer be eligible for Medicaid drug coverage and will receive their prescription drugs through the new Medicare Part D benefit. On January 1, 2006, 6 million dual eligibles who have received their prescription drugs through the Medicaid program will no longer be eligible for Medicaid drug coverage and will receive their prescription drugs through the new Medicare Part D benefit.

States Have Concerns Timeline for assignment to Medicare plans is rapid Timeline for assignment to Medicare plans is rapid Some enrollees may not be able to navigate the new system Some enrollees may not be able to navigate the new system States will not obtain any information about the drug utilization of enrollees States will not obtain any information about the drug utilization of enrollees Risks are substantial Risks are substantial