Policy Analysis | August 2019

Approved 1115 Medicaid Demonstrations in the South

Roger Moore, Policy Analyst

Under Section 1115 of the Social Security Act, the U.S. Department of Health and Human Services has the authority to waive specific provisions of major health and welfare programs, including Medicaid and the Children’s Health Insurance Program (CHIP). Section 1115 waivers give states the flexibility to implement experimental or pilot projects, frequently referred to as “demonstrations,” to test new approaches to Medicaid and CHIP that differ from federal rules. Approved demonstrations must be budget-neutral, meaning any changes to services or coverage cannot exceed existing costs. Additionally, all approved demonstrations are subject to specific rules regarding transparency and evaluation. Public notice and comment periods at both the state and federal levels are required before Section 1115 waivers are approved.1

In the SLC region, 10 states have approved Section 1115 waivers as of August 2019, for a total of 13 waivers (two each in Arkansas, Florida and Mississippi). Approved Southern state demonstrations focus on five key areas of Medicaid/CHIP services and coverage:

  1. Expanding care for family planning services for individuals who are not otherwise eligible for Medicaid or CHIP;
  2. Providing care for individuals with long-term disabilities who are not otherwise eligible for Medicaid or CHIP;
  3. Implementing community engagement requirements as a condition of Medicaid eligibility;
  4. Establishing funding for substance use disorder treatment and broader behavioral health initiatives ; and
  5. Expanding Medicaid managed care, which provides for the delivery of Medicaid health benefits and additional services through contracted arrangements between Medicaid agencies and managed care organizations.

In many cases, the approved demonstrations are extensions of previously approved pilots or experiments, deemed necessary by states to continue providing expanded coverage and services for eligible populations. However, there have been several newly approved demonstrations that permit community engagement requirements as a condition of eligibility for assistance, as well as expanded services for behavioral health and substance use treatment, both of which are priorities for the federal administration.

Glossary

Capitation – A contracted payment arrangement in which a fixed amount – often per member, per month – is paid to healthcare providers, regardless of how often their patients need care.

Community Engagement Requirement – An activity that beneficiaries must satisfy as a condition of eligibility for assistance, such as employment, education, professional development or community service.

Demonstration – A state-level experiment or pilot project, approved by the U.S. Department of Health and Human Services, that provides an avenue to test new strategies to Medicaid/CHIP services and coverage.

Federal Financial Participation – The federal government’s share of a state’s expenditures under the Medicaid program.

Federal Poverty Level – A measure of income issued every year by the U.S. Department of Health and Human Services, used to determine eligibility for public assistance programs and benefits. In 2019, the federal poverty level is $12,490 for individuals; $16,910 for a family of two; $21,330 for a family of three; and $25,750 for a family of four.

Managed Care – A healthcare system aimed at managing costs and improving quality of care by allowing contracted arrangements between state Medicaid agencies and managed care organizations that accept per member, per month fees for services provided.

State 1115 Demonstration Effective Expiration Description
Alabama “Alabama Plan First Section 1115 Family Planning Demonstration” 11/27/2017 09/30/2022 Expands family planning services to women ages 19 through 55 with income up to 141 percent of the federal poverty level who are not otherwise eligible for Medicaid; women ages 19 through 55 who are losing Medicaid pregnancy coverage at the expiration of the 60-day postpartum period; and men ages 21 and older with income up to 141 percent of the federal poverty level who are not otherwise eligible for Medicaid and are seeking vasectomy services, related counseling and case management services. Expanded family planning services are provided to eligible individuals for a 12-month period.2
Arkansas “Arkansas Tax Equity and Fiscal Responsibility Act Section 1115 Waiver” 05/09/2018 12/31/2022 Provides services to disabled children ages 18 and younger with long-term disabilities, mental illness or complex medical needs in families with incomes th at are too high for Medicaid eligibility, but who could become Medicaid-eligible if they were receiving care in an institutional setting. The demonstration allows eligible children to receive Medicaid based on their own income and resources in order to receive less costly, at-home care rather than in an institutional setting. Monthly premiums are assessed for families with incomes above 150 percent of the federal poverty level, with total annual cost-sharing obligations capped at 5 percent of the family’s annual gross income.3
Arkansas “Arkansas Works” 03/05/2018 12/31/2021 Allows the state to require all Arkansas Works beneficiaries ages 19 through 49 to participate in 80 hours per month of community engagement activities, such as employment, education, job skills training or community service, as a condition of Medicaid eligibility, with exemptions for certain population groups who are unable to comply. Arkansas Works was implemented in December 2016 to provide certain Medicaid beneficiaries with premium assistance to purchase qualified health plan coverage through the Health Insurance Marketplace. Beneficiaries with incomes between 100 percent and 133 percent of the federal poverty level are required to pay premiums and co-pays for care.4
Florida “Florida Medicaid Section 1115 Family Planning Waiver” 03/08/2019 06/30/2023 Provides family planning services for a transitional period up to 24 months for women ages 14 through 55 with family incomes at or below 191 percent of the federal poverty level who are not otherwise eligible for Medicaid or CHIP and are not already enrolled in health insurance coverage that provides family planning services.5
Florida “Managed Medical Assistance” 08/01/2017 06/30/2022 Allows the state to operate a capitated Medicaid managed care program in which most Medicaid-eligible individuals are required to enroll in one of the managed care plans contracted with the state. Applicants for Medicaid are given the opportunity to select a managed care plan; if they do not choose a plan, they are automatically assigned a plan once they are deemed eligible. The demonstration also implements dental managed care plans; low-income pools to ensure continuing support for safety net providers; and behavioral health and housing services for individuals ages 21 and older with serious mental illness or substance use disorder.6
Kentucky “KY Health” 04/01/2019 09/30/2023 Allows the state to require all Kentucky HEALTH beneficiaries ages 19 through 64 to participate in 80 hours per month of community engagement activities, such as employment, education, job skills training or community service, as a condition of Medicaid eligibility, with exemptions for certain population groups who are unable to comply. Kentucky HEALTH is a program into which the state enrolls non-elderly adult beneficiaries who do not qualify for Medicaid on the basis of a disability. Beneficiaries pay premiums not to exceed 4 percent of household income. The demonstration also includes two consumer-driven tools that aim to incentivize healthy behavior and community engagement, as well as inform beneficiaries about the cost of care and how to appropriately utilize healthcare services.7
Louisiana “Healthy Louisiana OUD/SUD” 02/01/2018 12/31/2022 Allows the state to receive federal financial participation for services to treat addiction to opioids or other substances, including services provided to Medicaid enrollees who are in short-term residential treatment facilities that meet the definition of an institution for mental disease. Under the demonstration, there is no change to Medicaid eligibility.8

Mississippi
“Healthier Mississippi” 09/28/2018 09/30/2023 Provides coverage for aged, blind or disabled individuals with incomes at or below 135 percent of the federal poverty level who are not eligible for Medicare and do not otherwise qualify for Medicaid. Sets an enrollment cap of 6,000, after which applicants are placed on a waiting list.9
Mississippi “Mississippi Family Planning Waiver” 12/28/2017 12/31/2027 Provides coverage for family planning services to women and men ages 13 through 44 with income at or below 194 percent of the federal poverty level who are not enrolled in Medicaid, Medicare, CHIP, or other health insurance coverage that includes family planning services. The eligible population also includes women who are losing Medicaid pregnancy coverage at the expiration of the 60-day postpartum period.10
Missouri “Missouri Gateway to Better Health” 01/01/2018 12/31/2022 Provides coverage for primary care and specialty care benefits for individuals residing in the St. Louis region who are not eligible for Medicaid and have incomes at or below 100 percent of the federal poverty level. Effective February 2019, the state also provides screening, evaluation and assessment; medication-assisted treatment; psychotherapy; group therapy; peer support services; and case management services for substance use disorder treatment for eligible individuals.11
North Carolina “North Carolina Medicaid Reform Demonstration” 01/01/2019 10/31/2024 Transitions the Medicaid program from fee-for-services to a managed care program. As part of the transition to managed care, the state contracts with entities that offer plans targeting high-need Medicaid populations, including plans for beneficiaries with behavioral health and intellectual/developmental disabilities, as well as specialized plans for foster care youth. The demonstration also allows the state to receive federal financial participation to treat addictions to opioids and other substances, including services provided to Medicaid enrollees with substance use disorders who are short-term residents in residential and inpatient treatment facilities that meet the definition of an institution for mental disease.12
Texas “Texas Healthcare Transformation and Quality Improvement Program” 01/01/2018 09/30/2022 Expands Medicaid managed care programs statewide and uses savings from the expansion of managed care to finance a new safety net care pool to financially assist hospitals and other providers. The managed care programs serve low-income families and children and provide acute care and long-term services and supports for the aged, disabled and chronically ill.13
West Virginia “West Virginia Creating Continuum of Care for Medicaid Enrollees with Substance Use Disorders" 01/01/2018 12/31/2022 Authorizes the state to implement a new substance use disorder benefit and introduce substance use disorder delivery system reforms. The demonstration permits substance use disorder services for all Medicaid enrollees, both those served via the managed care and fee-for-service delivery systems. It expands the substance use disorder benefits package to cover the full continuum of substance use disorder treatment, including methadone treatment, short-term residential treatment services, peer recovery support services, and withdrawal management services.14

References

5 Agency for Health Care Administration, https://ahca.myflorida.com/Medicaid/Family_Planning/index.shtml.