The NCSL Blog

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By Emily Blanford

Medicaid now accounts for 17 percent of total state spending, according to The Pew Charitable Trusts.

Arkansas Gov. Asa Hutchinson discussing the Medicaid program. (AP/Andrew DeMillo)As states continue to spend a significant portion of their general funds on Medicaid, policymakers continue to explore strategies to improve efficiency, outcomes and cost-effectiveness of their Medicaid programs.

This two-part blog series highlights Medicaid innovations from across the country in 2018—many of which are also being debated in 2019 legislative sessions—including Medicaid expansion and community engagement and work requirements described below. 

Medicaid expansion: The Affordable Care Act (ACA) expanded Medicaid coverage for non-pregnant adults ages 19-64 with income up to 138 percent of the federal poverty level and 37 states including the District of Columbia have adopted this expansion. 

In November 2018, ballot initiatives to expand Medicaid passed in Idaho, Utah and Nebraska and legislators in those states are currently debating legislation for implementation of those initiatives. Montana’s Medicaid expansion expires June 2019 and legislators are evaluating whether to fund expansion despite the failure of a ballot initiative to extend the expansion. In addition, with new governors in their states, Kansas, Oklahoma and Wisconsin are also reportedly considering Medicaid expansion options. 

During the first years of ACA implementation (2014-2016), the federal government paid 100 percent of the cost for Medicaid expansion and, in 2019, states are now required to fund 7 percent of expansion costs, and 10 percent by 2020. Most states have financed these costs with general fund dollars, while some used other funding sources such as provider taxes or fees.

In addition, several states have used 1115 waivers offered by the federal government to design Medicaid expansions to meet their specific needs. These waivers include options for charging premiums above usual limits, providing premium assistance, requiring community engagement, waiving typically required transportation benefits and waiving certain recipient eligibility requirements.

Community engagement and work requirements: Seven states have received approval from the Centers for Medicare & Medicaid Services (CMS) to implement community engagement or work requirements for certain abled-bodied adult Medicaid beneficiaries. These community engagement programs may require individuals to verify that they are employed, actively seeking work, or attending school or job training before receiving Medicaid benefits.    

As of February 2019, only two of the seven states—Arkansas and Indiana—have implemented these work requirements. Michigan, Oklahoma and Tennessee passed legislation adding work requirements to their Medicaid programs in 2018, with Michigan being the only state of the three to receive CMS approval so far. Programs in Kentucky, New Hampshire and Wisconsin are slated to start later in 2019 and Arizona and Michigan are anticipating implementation in January 2020. Several other states have submitted proposals for work requirements currently pending CMS approval. 

Arkansas, Kentucky and New Hampshire face legal challenges to these new work requirements, with a second injunction issued by a federal court striking down the Arkansas and Kentucky programs on March 27. On Twitter, CMS Administrator Seema Verma affirmed support for “state-driven” innovations in the Medicaid program. These legal challenges will be an area to watch as several states work to implement these requirements or have work requirement proposals currently pending CMS review

Tune in tomorrow for Part 2 of this series which will cover substance use disorder and mental health innovations, payment and delivery system reforms, and long term services and supports.

Emily Blanford is a program principal in NCSL’s Health Program.

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.