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January 04, 2015 11:00 PM

CMS gives Arkansas, Iowa more leeway in Medicaid expansion waivers

Virgil Dickson
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    The Obama administration is continuing to compromise with Republican-led states that expand Medicaid, allowing Arkansas for the first time to impose cost-sharing for beneficiaries below poverty level.

    The administration also gave Iowa the nod to continue to not offer non-emergency transportation to beneficiaries despite criticism from patient advocates and data showing negative consequences.

    The CMS outlined the new permissions in letters to the states at the end of December approving amendments to their Medicaid waivers.

    Arkansas won a federal waiver in 2013 to use new funding available under the Patient Protection and Affordable Care act to help residents earning up to 138% of the poverty level buy private plans on the new insurance exchange rather than enroll in traditional Medicaid coverage. The state now has the go-ahead (PDF) to mandate that all beneficiaries in these private-option plans make monthly financial contributions to health independence accounts, a version of health savings accounts.

    If beneficiaries are current with their contributions, the savings account will cover any cost-sharing. The accounts can also accrue money that can be used to cover health insurance costs if they transition out of the private option, either to employer-sponsored coverage or to a private plan they purchase if their income rises above the threshold for Medicaid eligibility.

    Patient advocates and some policy experts have criticized the cost-sharing provisions that are becoming increasingly popular in Medicaid waiver applications because previous experiments with such fees suggest any fees generally discourage low-income people from enrolling.

    The monthly contributions to the savings accounts in Arkansas will range from $10 to $25 for residents earning between 100% and 138% of the poverty level. Those making between 50% and 100% of federal poverty level ($11,925 to $23,850 for a family of four) will be expected to pay $5 a month.

    The state won’t revoke coverage for beneficiaries who fail to make the contributions but will allow providers to bill them for cost-sharing that would have been covered by the account. Providers won’t be allowed to refuse medical services to patients who are below the poverty level and don’t pay—but they can refuse patients in the 100%-138% income range.

    Iowa was given permission (PDF) to continue charging monthly premiums for beneficiaries under 138% of the federal poverty level. The amount will not exceed $5 for people between 50% to 100% poverty level and $10 for those above. The obligation will be reduced or eliminated for beneficiaries who complete a wellness exam and a health risk assessment.

    As with Arkansas, Iowa can’t revoke coverage for the poorest beneficiaries for failing to pay the premium. But the state can terminate coverage for anyone in the higher income category who fails to pay for 90 days, and the debt will be subject to collections.

    Data on Iowa’s Medicaid expansion so far show that few of the new beneficiaries—about 13,000 out of more than 120,000 as of Dec. 24—are participating in the wellness exam and risk assessment necessary to avoid the premiums.

    Iowa also got permission to continue to decline to pay for non-emergency transportation to health-related appointments. The exception was set to expire on Dec. 31, and the CMS agreed to allow the state to continue the policy through July 31.

    HHS granted the extension despite data collected on the state’s behalf by the University of Iowa’s Public Policy Center showing that 20% of interviewed beneficiaries with incomes under the poverty level could cite at least one instance in which they did not have transportation to or from a healthcare visit. Nine percent of them said a lack of transportation could prevent them from getting a physical exam this year.

    “That data raised concerns about beneficiary access; particularly for those with incomes below 100%” of the federal poverty level, CMS Medicaid Director Cindy Mann said in the approval letter. “However, because the state considers these data to be preliminary and the state is in the process of collecting additional data as part of the demonstration evaluation, we will extend the [non-emergency transpiration] waiver.”

    Patient advocates, however, are worried about the consequences of the transportation waiver. “Waiving the [non-emergency] benefit sets a bad precedent that leads to the erosion of Medicaid benefits in other states,” officials from the patient advocacy group Families USA said in a letter to HHS Secretary Sylvia Mathews Burwell upon seeing the data.

    “CMS would be wise to prevent this precedent from becoming institutionalized, thereby undermining Medicaid beneficiaries’ access to care,” added the Georgetown Center for Children and Families in its own letter.

    Last year, the CMS also gave permission to Pennsylvania to not offer non-emergency transportation for one year, and Indiana is seeking the same exception as part of its yet-to-be approved expansion waiver.

    Follow Virgil Dickson on Twitter: @MHvdickson

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