AAOS February 20, 2018
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State Corner: Trump Administration Expanding State Waiver Authorities

In January, the Centers for Medicare and Medicaid Services (CMS) issued new guidance for Section 1115 waiver proposals that would allow states to create work requirements for “able-bodied” people in order to be eligible for Medicaid. Since then, Indiana and Kentucky have had Section 1115 waivers approved that create work requirements for Medicaid eligibility. Seema Verma, one of the creators of Indiana’s unique Medicaid program, is the current Administrator of the Centers for Medicare and Medicaid Services (CMS) and approved the waivers. Since 2016, states have also gained authority for Section 1332 waivers. These waivers deal mainly with requirements imposed by the Affordable Care Act.

Together, Verma and Alex Azar, the new Secretary for the Department of Health and Human Services (HHS), will be leaning on states to implement significant reforms and to drive innovation that could be adopted by the federal government. Azar is known as a “master regulator” by his former boss, former Secretary of HHS Mike Levitt. Azar, under Secretary Levitt, led the development and approval of all HHS regulations in addition to government efforts to encourage worldwide pharmaceutical and medical device innovation. He also oversaw the HHS response to an initiative implemented by President George W. Bush to improve government performance. [1] For more on Azar, read this earlier Advocacy Now article.

In 2016, HHS approved Healthy Indiana Plan 2.0, which was an idea pushed forward by Administrator Verma. The plan was unique in that it created a consumer-driven model for Indiana’s Medicaid program that includes more ownership and personal responsibility in health care choices. The key part of Indiana's experiment requires low-income participants to make monthly payments into a Personal Wellness and Responsibility (POWER) Account. Advocates say this promotes recipients' taking personal responsibility for their health care.

Minnesota, Oregon, and Alaska have Section 1332 waivers to offer a reinsurance program to lower premium costs. Under such a program, the government would provide money to health insurance providers to pay for between 50 percent and 80 percent of medical claims costing between $50,000 and $200,000.

Since 2014, Maryland has a unique state waiver that focuses on overall per capita expenditures for hospital services, as well as on improvements in the quality of care and population health outcomes. This waiver is a first of its kind because it impacts Medicare reimbursement. [2]

Currently, 33 states had at least one approved Section 1115 waiver and 18 states had one or more waivers pending approval by the Centers for Medicare & Medicaid Services. [3]


[1] https://www.usatoday.com/story/news/2017/11/13/former-pharmaceutical-ceo-nominated-trump-head-department-health-and-human-services/858240001/
[2] https://www.hopkinsmedicine.org/news/articles/faqs-about-the-medicare-waiver
[3] https://www.kff.org/medicaid/issue-brief/section-1115-medicaid-demonstration-waivers-the-current-landscape-of-approved-and-pending-waivers/