The CMS has denied Ohio's request to transition into a more conservative Medicaid expansion that would drop adult beneficiaries who don't pay into a health savings account, regardless of their income.
CMS officials indicated they were troubled by several proposals in the state's waiver. Under Ohio's proposal, Medicaid beneficiaries above and below the poverty level were expected to make monthly contributions to a health savings account. The amount was to be equal to 2% of income but not exceed $99 per year, or $8.25 per month. Members who were more than 60 days behind on payments would be dropped from the program and required to pay back the amount prior to re-enrollment.
In a letter sent to Ohio officials last week, CMS acting Administrator Andy Slavitt said charging any premiums would undermine access to coverage and affordability of care.
He added it was actually data submitted by Ohio's Medicaid agency that helped lead to the denial.
“Our concerns are corroborated by the data you submitted with your application that estimates that these policies would lead to over 125,000 people losing coverage each year,” Slavitt said.
Even before the ruling, insiders thought the waiver would be rejected since HHS has yet to approve a proposal that allows individuals below the federal poverty level to lose coverage for not paying into an HSA.
Republican governor and former presidential candidate John Kasich submitted the request for an expansion waiver after facing considerable criticism from conservatives for his 2013 decision to bypass the state Legislature to expand Medicaid. At least 600,000 state residents have gained coverage since then.
Other states with similar pending proposals, such as Arizona and Kentucky, will likely see this as a bad sign for their efforts. Leaders there also want to transition to more conservative models.