Diving briefs:
- The Centers for Medicare & Medicaid Services (CMS) plans to discontinue certain Medicaid demonstration waivers, part of broader cuts to the insurance program established during the Trump administration.
- On Thursday, CMS informed states of its intentions to approve a new exemption while extending existing ones, which facilitate longer participation in the insurance program. A letter accompanied this decision, allowing Medicaid funds to be allocated for vocational training.
- This initiative is projected to involve over $1 billion in federal spending, as stated by CMS. The goal of these cuts is to ensure more prudent use of taxpayer funds and to keep Medicaid operations within statutory limits, although this could result in some Medicaid users losing their coverage.
Dive Insights:
The exemption referred to as the Section 1115 demonstration enables states to customize their Medicaid programs according to specific needs. Most states, in fact, currently operate under an active Section 1115 exemption, with some states having multiple ones.
CMS is specifically focusing on two types: the exemption for continuous enrollment, actively utilized by 17 states, and another that allocates Medicaid funds for workforce initiatives, currently used by five states.
While CMS has not revoked any existing exemptions, denying requests for extensions or new proposals could significantly impact states and their Medicaid recipients.
For instance, the continuous enrollment provision has been noted to lower the rate at which individuals lose their Medicaid coverage when they temporarily fall out of the program only to re-enroll immediately afterward.
Typically, states are required to reassess a beneficiary’s Medicaid eligibility annually or when significant changes occur that could affect their eligibility. However, continuous enrollment allows individuals to remain without those regular checks.
In nine states, exemptions exist to ensure longer enrollment periods for children, a move that was recently approved for five states under the Biden administration in November. For adults, eight states allow similar provisions (some apply to both adults and children) typically aimed at ensuring coverage for vulnerable groups, such as those recently released from incarceration or those caring for dependents.
However, CMS is reverting to standard registration requirements, as outlined in the 2023 Consolidated Budget Act and the 2021 American Rescue Plan Act, according to communications sent to the states.
The legislation mandates continuous eligibility for children for one year, as well as extending the same eligibility for mothers for a year post childbirth.
CMS administrator Dr. Mehmet Oz highlighted in a statement that this shift aims to restore basic safeguards to Medicaid and CHIP. Concerns were raised about individuals no longer being eligible inadvertently taking away resources from those who are eligible.
“Medicaid and CHIP have strayed from their essential purpose of being safety nets for the most vulnerable,” Oz remarked.
Nevertheless, advocates argue that cutting back on continuing eligibility exemptions could harm the very populations that need support the most.
As Joan Alker, executive director at Georgetown University’s Center for Children and Families, noted, “With this push for ‘protecting vulnerable Americans,’ the Trump administration is snipping away Medicaid support crucial for infants and young children.” This sentiment was shared in a post on X.
Republicans often claim that Medicaid has deviated from its original mission to assist the nation’s poorest, which they argue justifies recent, more severe cuts.
President Trump’s recent legislation, referred to as the “Big Beautiful Building,” includes approximately $1 trillion in Medicaid cuts alongside new work requirements. These stipulations dictate that some beneficiaries must show proof of working or attending school at least 80 hours monthly to maintain coverage.
Moreover, this law stipulates that Medicaid eligibility checks will occur every six months instead of once annually, introduces cost-sharing for specific services, and restricts Medicaid access for immigrants.
The pursuit of adjustments to the Section 1115 exemption marks the most recent effort by the Trump administration to tighten Medicaid on the grounds of addressing improper spending and enrollment. On Thursday, CMS released a study suggesting that 2.8 million individuals across various states may be improperly enrolled in Medicaid or simultaneously qualified for Medicaid and Affordable Care Act plans.
