Bush Administration Announces Medicaid Change That Gives States ‘Tools’ to Obtain Waivers, ‘Flexibility’ to Trim Optional Benefits; Two Family Planning Waivers Approved

The Bush administration this weekend announced a "fundamental change" in Medicaid and the State Children's Health Insurance Program that would give states more flexibility in "ensur[ing] that their programs broaden coverage for low-income Americans," the Washington Post reports (Broder/Balz, Washington Post, 8/5). Under the plan, announced by HHS Secretary Tommy Thompson at the National Governors Association annual meeting in Providence, R.I., HHS will develop a "model waiver program" under the Health Insurance Flexibility Initiative to make it "faster, easier and simpler" to expand coverage. Stating that HHS has already approved nearly "900 Medicaid and S-CHIP state plan amendments and waivers" that have expanded coverage to "800,000 Americans" since January, Thompson "promised" the governors that HHS would take action on the 36 remaining Medicaid waivers by September and that the new initiative would lead to additional progress.

The Details
Under the initiative, HHS is taking four steps:

• Easing states' ability to design benefit packages: Thompson said that under the plan, "States will have more flexibility to design benefit packages that promote expanded access to health insurance" (Thompson written remarks, 8/6). According to the Wall Street Journal, the plan allows states "more leeway" to decide "how much coverage" to provide to optional Medicaid beneficiaries -- "those who aren't poor enough to automatically qualify under program" (Lueck, Wall Street Journal, 8/6).
• Improving coordination between Medicaid and S-CHIP: According to Thompson, the model waiver program will "knit" public health insurance resources together "in a way that's easy" for beneficiaries to use.
• Setting goals: HHS will ask states requesting waivers to submit goals for covering the uninsured and reports on progress.
• Making electronic application available: States "shouldn't have to engage in time-consuming guess work about what application might work best," Thompson said. As a result, HHS will post an electronic application to provide "up-front" guidance on how to have waivers approved "quickly and efficiently" (Written remarks, 8/6).

Bush's Remarks, Others' Reaction
Touting the changes in his weekly radio address, President Bush said that the changes will "empower states to propose reforms tailored to the needs of their citizens" (Bush radio address, 8/4). However, Judy Waxman, deputy director of Families USA, a Washington-based consumer advocacy group, criticized the move, saying that some beneficiaries might have to pay more for care or see services reduced. In addition, Rep. Henry Waxman commented that the plan, "is the worst of both worlds: no new federal money for states and dropping basic Medicaid protections for the poor in Medicaid." (Wall Street Journal, 8/6). Vermont Gov. Howard Dean (D), a physician and Democratic party "leader" on health care issues, "praised the initiative," although he and Iowa Gov. Tom Vilsack (D) raised concerns that the Office of Management and Budget may take a "restrictive view that would inhibit state efforts to accomplish what Bush and Thompson said they want" (Washington Post, 8/5).

Family Planning
Addressing a separate issue in a "closed-door" luncheon, Thompson "assured" governors that the Bush administration is "not trying to eliminate family planning services" from Medicaid, noting that HHS approved waivers for family planning programs in New York and Missouri last week (Washington Post, 8/5). Last month, the administration "verbally denied" several states permission to expand contraceptive coverage and other family planning services through their Medicaid programs. Administration officials said that they had decided to require states to expand their Medicaid programs in general through "comprehensive" instead of single-issue changes (Kaiser Daily Reproductive Health Report, 7/20). Some family planning groups charged that HHS had been delaying approval of the Medicaid waivers to expand contraceptive coverage, instead "pushing abstinence-only programs as an alternative." The delay, Thompson explained, occurred because he was asking states that were seeking to expand contraceptive programs to "broaden their [waiver] applications to include primary care for all women who seek help." Thompson added that "none of the eight waiver applications have been denied. I expect all will be approved. ... I want to reaffirm that Medicaid recipients continue to have fill access to family planning services" (Washington Post, 8/5).