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July/August 2015 St@teside

Medicaid Expansion Update

On July 30, the country marked the 50th anniversary of Medicaid, and perhaps the one constant throughout those 50 years is that those federal/state partnership programs continue to change. Currently, several states are either working to expand or to tweak their model to provide coverage for individuals up to 138 percent of the federal poverty level as allowed under the Affordable Care Act (ACA).

Alaska, Montana and Utah are the most recent states to move toward Medicaid expansion.

  • Governor Bill Walker announced on July 16 that he intends to expand Medicaid via an executive order, citing that coverage that would be made available to more than 20,000 Alaskans and would reduce state spending by $6.6 million in the first year. The state Legislative Budget and Audit Committee has 45 days to decide whether to respond to the Governor’s announcement, during which time the legislature could also choose to call a special session to address expansion.
  • In July, Montana released for public comment the documents related to its expansion plan waiver. The waiver request, which is open for comment for 60 days from July 7, 2015, would extend Medicaid coverage to adults who earn up to $16,200 a year (138% FPL). Two key items that would require CMS approval are included in the proposal: the newly eligible enrollees would be required to pay premiums for their coverage, and the program must be administered by a third party (a request for proposal has also been released seeking a contractor to fill that role).
  • Utah is on the brink of expanding, with the governor and Republican legislative leaders announcing on July 17 that they have reached a preliminary agreement on how to cover around 126,000 more Utahns. Details of the plan have yet to be released, and the full legislature would still need to approve the plan. If a deal is reached, Governor Gary Herbert plans to call a special session to vote on the issue.

Meanwhile, Arizona, Iowa, Michigan, and Ohio, all states that previously expanded Medicaid, are all in the midst of talks or events that may revise their existing programs. 
  • Arizona: In 2013, then-Governor Jan Brewer signed Medicaid expansion into law. But 36 Republican lawmakers filed suit, arguing that the hospital assessment authorized to pay the state’s share of the costs is unlawful. The case was heard at the Arizona Superior Court last week and is likely headed to the State Supreme Court, where the decision could affect the coverage of nearly 350,000 Arizonans. In the meantime, current Governor Doug Ducey has announced plans to overhaul the Medicaid program that would include mandatory health savings accounts and wellness programs, copays, and work requirements.
  • Iowa: Governor Terry Branstad is working to revamp Medicaid, including his approach to expansion, which previously gave premium assistance to enrollees to purchase private plans. With only one of the two private plan options still available through the exchange, Iowa is seeking a federal waiver to instead move those beneficiaries into managed care plans.
  • Michigan: Michigan will need to submit a new federal waiver request by September 1, 2015 to continue its Medicaid expansion, known as the Healthy Michigan Plan. State law requires that the proposed waiver include provisions that require those enrolled in the Healthy Michigan plan for 48 months to either purchase private coverage through, or be subject to an enrollee contribution of 3.5 percent of income and cost-sharing of up to 7 percent of income. Around 600,000 Michiganders are currently enrolled in the program.
  • Ohio: Governor John Kasich, who originally spearheaded a traditional Medicaid expansion, recently signed a budget that proposes moving Ohio to a model that would make beneficiaries responsible for cost-sharing via contributions to health savings accounts. The expansion in Ohio covers more than 500,000 people.