Under the Affordable Care Act, roughly half of the states, including Connecticut, have expanded Medicaid to cover more low-income individuals. The federal government will pay for this expansion through 2016, gradually reducing its contribution to 90% of costs in 2020. Other states opted not to expand Medicaid, effectively refusing these federal funds.
But a small number of states are forging a third path, negotiating with the Centers for Medicare and Medicaid Services (CMS) to expand Medicaid under a waiver program, which would allow these states to accept federal funds to explore alternative options. Waivers allow states to waive or modify Medicaid rules, as long as CMS approves. Iowa and Arkansas have both expanded their Medicaid programs through waivers, and Pennsylvania is in negotiations with CMS. Indiana’s governor has also announced an expansion plan that would need CMS approval.
Thus far, the alternative plans include provisions not normally allowed in standard Medicaid plans, such as monthly contributions, premiums, and using federal funds to support the purchase of private plans. Pennsylvania’s expansion, if approved, would be the first to include work requirements. The Council of State Governments provides more detail and analysis of these plans in this article.
