CMS Won't Approve Medicaid Lifetime Limits for States

CMS Won't Approve Medicaid Lifetime Limits for States

By Misty Williams, CQ

The nation’s top Medicaid official on Tuesday made clear that the Trump administration would not allow states to impose lifetime limits for people on Medicaid.

The comments from Centers for Medicare and Medicaid Services Administrator Seema Verma followed her announcement last week that the agency rejected a three-year lifetime limit proposal from Kansas.

“You’re dealing with a fragile population and there are changes in their lives,” said Verma, who spoke Tuesday at a health care event at The Washington Post. “We always want to make sure that the program serves as a safety net and there’s a place for people to go when they need it.”

Verma’s statements Tuesday and CMS’ recent Kansas decision signal that the administration is only willing to go so far in giving states flexibility to radically revamp their Medicaid programs.

At least four other states – Arizona, Utah, Wisconsin and Maine – have sought to impose limits on how long people can receive benefits through the government insurance program for low-income Americans.

Consumer advocates have applauded the rejection of lifetime limits but remain worried about other fundamental changes to Medicaid, such as work requirements, that the administration does favor.

“It’s unfortunate that CMS is willing to end coverage for people who can’t meet rigid work requirements, pay premiums, and comply with increased red tape, which also undermines Medicaid’s role in ensuring millions of low-income people can get the health care they need,” said Judy Solomon, vice president of health policy at the left-leaning Center on Budget and Policy Priorities, in response to last week’s Kansas decision.

The administration and Republicans are pushing for work requirements, saying they help lift people out of poverty.

So far this year, CMS has approved plans to implement Medicaid work requirements in four states: Kentucky, Indiana, Arkansas and, most recently, New Hampshire.

But Verma has hinted in recent weeks that CMS may not necessarily approve all Medicaid work requirement proposals from states as is.

She said in a meeting with reporters earlier this month that states wanting to institute work requirements must first create a plan to help people at risk of losing coverage if they end up earning too much money.

The issue is particularly relevant in states that did not expand Medicaid under the 2010 health care law (PL 111-148, PL 111-152) and have very strict income eligibility limits.

Work requirement critics argue poor parents could be kicked off the program if they earn slightly too much money, even though many low-wage jobs don’t provide health insurance. Many affected people may also earn too little money, less than the federal poverty line, to qualify for subsidies to buy coverage on the health law’s exchanges.

Verma said earlier this month that the agency is in discussions with Mississippi, which has not expanded Medicaid, about how they can revise their work mandate proposal.

“I want to be very careful about this,” she said. 

Medicaid Expansion

The CMS chief also said Tuesday that the agency is continuing to weigh whether states should be allowed to only partially expand Medicaid.

At least three states – Arkansas, Massachusetts and Utah – want to limit Medicaid expansion.

The health law required states expanding Medicaid to cover people who earn up to 138 percent of the federal poverty level, or about $16,700 for a single person in 2018. Arkansas and Massachusetts both want to roll back their expansions to people making 100 percent of poverty, while Utah wants to institute an expansion up to 95 percent of poverty.

Health policy experts say allowing partial expansions could end up costing the federal government more money since many people kicked off Medicaid would then be eligible for exchange subsidies, which are fully federally-funded. States have to pick up at least part of the cost of Medicaid expansion.

“We’re trying to understand all of the implications,” Verma said. “What’s the impact going to be on the federal budget?”