SB 6540, to request a Medicaid waiver to stabilize and improve the state Medicaid program

By ROGER STARK  | 
LEGISLATIVE MEMO
|
Feb 6, 2018

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Key Findings

  1. Medicaid began in 1965 and has grown into one of the largest health coverage plans in the world. It is one of the largest yearly budget items for every state government, including Washington state.
     
  2. Washington state officials expanded Medicaid as allowed under the Affordable Care Act (ACA) to any able-bodied person 18 to 64 years of age who earns less than 138 percent of the federal poverty level.
     
  3. The ACA also increased the use of 1115 Medicaid waivers (1115A waivers) by providing billions of federal taxpayer dollars for innovative, pilot projects.
     
  4. SB 6540 would require the state Health Care Authority to submit an 1115A waiver request to the federal Center for Medicare and Medicaid Services that would institute a work requirement where applicable, end retroactive benefits, and seek a capitated payment method.
     
  5. SB 6540 would serve the public interest by helping to improve and stabilize Washington’s Medicaid program.
     

Introduction
The Medicaid entitlement program began in 1965 as a government health insurance safety-net for children of low-income families and the disabled. It has since grown into one of the largest health insurance plans in the world and is one of the largest budget items for the federal government and state governments.

 Last year, total public spending on Medicaid was $545 billion and this spending is projected to increase to $700 billion by 2020. Although some individuals have successfully accessed health care through Medicaid, independent research shows that, in general, having Medicaid health insurance provides patients with no better medical outcomes than being uninsured. 


The federal government has allowed states to request and receive Medicaid waivers since the beginning of the program. These waivers must follow strict guidelines, must be budget neutral, and are subject to federal oversight. In the past 50 years, the federal government has granted over 500 Medicaid waivers nationally, with 14 being granted to Washington state.

The Affordable Care Act (ACA) expanded Medicaid to any able-bodied, childless person 18 years of age to 64 years of age who earns less than 138 percent of the federal poverty level, or about $16,000 per year. In 2012, the U.S. Supreme Court ruled that the federal government could not force states to expand Medicaid, thus making participation in Medicaid expansion optional for states. To date, officials in 32 states, including Washington, have expanded Medicaid under the ACA.

The ACA also increased the use of 1115 Medicaid waivers (1115A waivers) by providing billions of federal taxpayer dollars for innovative, pilot projects in the states. In order to be approved, these plans must reduce costs and improve health quality in the Medicaid program for the state making the application.

Download file Download the full legislative memo here