Medicaid Moving Ahead in Uncertain Times: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2017 and 2018

Eligibility and Premiums

The ACA Medicaid expansion was one of the most significant Medicaid eligibility changes in the history of the program. By FY 2017, 32 states had implemented the ACA Medicaid expansion: 26 states in FY 2014; three states (Indiana, New Hampshire and Pennsylvania) in FY 2015; two states (Alaska and Montana) in FY 2016, and one state (Louisiana) on July 1, 2016 (FY 2017) (Figure 1).

Figure 1: Medicaid Expansion Decisions by Year of Implementation

Several non-expansion states (Idaho, Tennessee, Virginia, and Wyoming) reported that consideration of the Medicaid expansion was on hold due to uncertainty about the future of the Medicaid expansion option. North Carolina’s governor announced plans to adopt the expansion shortly after taking office in January 2017. These plans have been delayed, however, by a lawsuit brought by a group of legislators challenging the governor’s authority to expand without legislative approval.² In Maine, voters will decide whether the state will adopt the ACA Medicaid expansion in a referendum this November.³

Other Eligibility Expansions

Beyond the ACA Medicaid expansion, states have made very few changes to expand Medicaid eligibility since 2014, and states reported only a few narrow expansions targeting a limited number of beneficiaries implemented in FY 2017 or planned for FY 2018 (Tables 1 and 2).

In addition to the ACA Medicaid expansion in Louisiana, a total of six other states made changes that expanded Medicaid eligibility in FY 2017. For FY 2018, seven states plan to implement eligibility expansions. Notable expansions reported include the following:

• In FY 2017, both Florida and Utah implemented the option to eliminate the five-year bar on Medicaid eligibility for lawfully-residing immigrant children. Arkansas and Nevada both intend to implement this option in FY 2018 (pending CMS approval of their plans, which were adopted by both states’ legislatures during FY 2017).
• In FY 2018, a pending Section 1115 waiver in Utah proposes covering a new eligibility group: individuals with income below 5 percent of the FPL who are chronically homeless, justice-involved, or individuals in need of substance use and/or mental health treatment.

Eligibility Restrictions

Only one state reported implementing an eligibility restriction in FY 2017: Missouri suspended its family planning waiver⁴ in FY 2017 following legislative restrictions contained in the state’s FY 2017 appropriations bill.⁵ Although Missouri replaced the Medicaid family planning waiver with a state-funded family planning program, this change eliminated Medicaid coverage for family planning services and placed new restrictions on which providers are accessible to the population. (The new restrictions apply only to individuals eligible through the waiver, however, and do not affect coverage of family planning services for other Medicaid eligible individuals.)

Eight states reported eligibility restrictions for FY 2018 (six states through Section 1115 waivers and two states through state plan authority), some in response to a March 2017 Trump administration letter to state governors⁶ that signaled an openness to approve Section 1115 waivers that include work requirements and more expansive use of premiums and cost sharing. This year’s survey captured changes that states have implemented or plan to implement in FY 2018, even if these changes are included in Section 1115 Waiver proposals that are pending approval ⁷ at CMS. Waiver provisions (in approved or pending waivers) that states plan to implement in FY 2019 or after are described later in the “Challenges and Priorities” section of this report.⁸ A description of key eligibility restrictions included in pending Section 1115 waivers planned for FY 2018 implementation follows.

FY 2018 restrictions for ACA Medicaid expansion populations:⁹

• Arkansas ¹⁰ has proposed to amend its “Arkansas Works” Medicaid expansion waiver to: (1) eliminate coverage for persons with income above 100 percent of the FPL while still maintaining the enhanced federal matching rate for the remaining expansion population at or below 100 percent FPL, (2) include a work requirement for the remaining expansion population, and (3) eliminate the conditions CMS placed on the state’s waiver of retroactive eligibility for expansion enrollees (including the medically frail).¹¹
• Indiana ¹² plans to impose a three-month lock-out from coverage on individuals who fail to comply with redetermination requirements. Beneficiaries who fail to verify eligibility at renewal would be disenrolled but could re-enroll without a new application if they provide necessary documentation within 90 days. After 90 days, a three-month lock-out period would follow before individuals could re-enroll.¹³

FY 2018 restrictions for non-ACA expansion Medicaid populations:

• Iowa plans to eliminate retroactive Medicaid eligibility for all Medicaid enrollees with an October 1, 2017 target implementation date.¹⁴
• Maine ¹⁵ plans to: (1) waive retroactive eligibility so that coverage would begin no earlier than the first day of the month of application, (2) impose a work requirement for adults (ages 19 to 64), such as parents and former foster care youth, and a time limit on coverage for those who fail to comply with work requirement, (3) apply a $5,000 asset test to all coverage groups that currently do not have an asset test, and (4) eliminate hospital presumptive eligibility for all coverage groups. The state’s pending waiver application proposes to implement these initiatives within six months of demonstration approval (the state’s estimated start date is January 1, 2018).¹⁶
• Utah plans to impose a work requirement for its existing Primary Care Network (PCN) waiver adults,¹⁷ impose a 60-month time limit on eligibility for PCN adults, and end hospital presumptive eligibility for all current enrollees.

Premiums

The Medicaid statute generally does not allow states to charge premiums to Medicaid beneficiaries. Only two states reported activity related to Medicaid premiums in either FY 2017 or FY 2018.¹⁹ In FY 2017, Arkansas replaced the requirement that expansion enrollees make contributions to “Health Independence Accounts” with a new 2 percent of income premium requirement (up to $13/month) for expansion enrollees above 100 percent FPL. Indiana’s pending waiver includes requests to: (1) add a 1 percent premium surcharge for tobacco users beginning in the second year of enrollment, (2) require Transitional Medical Assistance parents with income up to 138 percent FPL to pay premiums like expansion adults, and (3) change to a tiered premium structure instead of a flat charge of 2 percent of income (this change is planned for FY 2018 and expected to have a neutral effect on beneficiaries) (Table 2). 

Coverage Initiatives for the Criminal Justice Population

In recent years, many states have implemented new policies to connect individuals involved with the criminal justice system to Medicaid given that the Medicaid expansion made many of these individuals newly eligible for coverage (including childless adults who were not previously eligible in most states). Connecting these individuals to health coverage²⁰ can facilitate their integration back into the community. Individuals may be enrolled in Medicaid while they are incarcerated, but Medicaid cannot cover the cost of their care during their period of incarceration, except for inpatient services. Nearly all states have policies in place to cover inpatient care for individuals who are incarcerated under Medicaid. Most states are also working with corrections agencies and with local jails to facilitate enrolling individuals in Medicaid before they are released. In addition, half of the states (25) have enrollment initiatives to facilitate Medicaid enrollment for parolees. Some states train criminal justice employees to assist with Medicaid applications and other states have dedicated Medicaid staff to work with the corrections agencies to facilitate enrollment for inmates or payment for inpatient care of inmates. Finally, the majority of states suspend rather than terminate Medicaid coverage for enrollees who become incarcerated. When coverage is suspended, it can be reinstated more easily and quickly upon release from incarceration or when an inpatient hospital stay occurs.²¹

While both Medicaid expansion and non-expansion states have adopted these strategies to connect justice-involved individuals to Medicaid coverage, these initiatives affect many more people in expansion states because eligibility for adults remains restrictive in non-expansion states. In this year’s survey, one non-expansion state commented that the administrative costs of implementing Medicaid coverage policies for the criminal justice population would be excessive since the policies would apply to such a small number of people in the state.

Details on Medicaid coverage for individuals involved with the criminal justice system are included in Exhibit 1 and Table 3.

Table 1: Changes to Eligibility Standards in all 50 States and DC, FY 2017 and FY 2018

TABLE 3: CORRECTIONS-RELATED ENROLLMENT POLICIES IN ALL 50 STATES AND DC, FY 2017 AND FY 2018