Use Medicaid And Schip Funds example essay topic

On August 4, 2001, President Bush and HHS Secretary Tommy Thompson announced a new policy regarding Section 1115 waivers for Medicaid and the State Children's Health Insurance Program (SCHIP). Although the Health Insurance Flexibility and Accountability Initiative is being touted as a way for states to increase the number of people covered by Medicaid and SCHIP, the new initiative does not provide any extra funds to states to expand coverage, and it is likely to result in significant benefit cuts, increased cost-sharing, and possibly the widespread use of caps on enrollment in Medicaid. In fact, it is unclear that states must even expand coverage to use this waiver. However, should a state apply for a waiver to expand coverage, the severe restrictions on federal funds available to states for expansions imposed by this new policy would require that states drastically reduce benefits for current Medicaid beneficiaries in order to garner enough cost-savings to pay for the expansion. The proposal also gives states the option to increase cost-sharing for many people who are currently eligible for Medicaid, potentially creating a barrier to enrollment and making health care unaffordable for those most in need. Provisions of the new waiver guidance: .

Limits on Federal Funding: The waiver guidance indicates that states must adhere to 'current-level Medicaid and SCHIP resources' as they seek to expand coverage. It requires that 1115 waiver demonstrations not cost the federal government more than the program would have cost without such demonstrations, but the way this 'budget-neutrality' is calculated appears to be significantly more restrictive than the way it has been calculated in the past. It is also unclear whether the budget agreement encompasses only spending on newly covered populations, spending on all of the populations directly affected by the waiver, or spending for the entire Medicaid program. In the latter case, states might cut spending on mandatory groups (see below) in order to stay within the confines of the budget agreed to for the waiver. Such details will determine whether this new policy allows flexibility for states to expand meaningful coverage at all under these waivers... Eligibility: Divides Medicaid- and SCHIP-eligible people into three groups: mandatory, optional, and expansion.

While those in mandatory groups (such as children under age 19 in families with annual incomes up to 100 percent of the federal poverty level) would continue to be entitled to mandatory services and limited cost-sharing, states would have new discretion (and incentive) to cut benefits and to increase cost-sharing for optional groups and for people eligible under new expansions. Optional beneficiaries include 20 percent of all children enrolled in Medicaid, 43 percent of all parents enrolled in Medicaid, 22 percent of disabled enrollees, and 56 percent of seniors enrolled in Medicaid... Benefit Packages: Allows states discretion to reduce benefits for currently eligible people that the state is not required to cover (optional groups) and for new groups the state expands coverage to through a waiver (expansion groups). The guidance suggests that states provide a benefit package to optional groups that meet the SCHIP benchmarks, but it does not require them to do so.

It appears that states can drastically reduce the benefit package they offer to optional Medicaid and SCHIP enrollees, and that they can offer only minimal benefits to any new expansion populations. The requirement that states adhere to current Medicaid and SCHIP resources indicates that states will need to cut benefits such as prescription drug coverage, long-term care, dental care, and mental health coverage in order to pay for any expansion they seek to perform through a waiver... Cost-Sharing: Allows states to charge premiums, co-payments, and deductibles, and to impose other cost-sharing measures on optional and expansion adults with no limits on the amounts charged. States must still abide by the 5 percent cap on cost-sharing for SCHIP-eligible children, but the guidance exempts family-based premiums from the 5 percent cap. This means that states can charge families in which parents are covered significantly higher premiums than they charge families in which only children are covered... Premium Assistance Programs: HHS 'strongly encourages' waiver proposals that use Medicaid and SCHIP funds to purchase either individual or employer-sponsored coverage for eligible people.

The guidance eliminates the requirements that such coverage provide a minimum package of benefits and limit cost-sharing to Medicaid or SCHIP maximums, as well as the requirement that such coverage cost the state the same or less than it would to provide regular Medicaid or SCHIP coverage. Maintenance of Effort: States cannot apply for a waiver to get federal funding for a health program that is currently funded solely by the state. This means that states that currently provide coverage to adults without using federal funding (Minnesota, New Jersey, and Washington) cannot apply for a waiver to get Medicaid funds for these programs. There is no maintenance of effort requirement with regard to current Medicaid funding, which means that states are not required to use any savings they gain through this waiver to improve Medicaid or SCHIP coverage.