Medicaid Changes of 2018: Trends You Need to Know Now

medicaid changes of 2018

Over the last year, Americans have been saturated with healthcare news, including news about Medicaid. Republicans now control all three branches of the federal government. As is well known, they have been seeking broad changes in government-run health care programs, including Medicaid.

Even a small change would affect a large swath of people. After all, Medicaid is the third-largest domestic program in the federal budget. Coming in after Social Security and Medicare, it accounts for 9.6% of all 2016 federal spending.

Anyone receiving or administering Medicaid benefits must be working hard to keep up with all the changes! This applies to hospitals and healthcare practitioners as well as aid recipients. Between section 1115 waivers, work requirements, and potential drug testing, it can all be confusing.

But don't worry. Below we'll go over the Medicaid changes of 2018 and how they will affect you. Read on for more information!

A Quick Overview of the Medicaid Program

Figuring out how Medicaid works can be confusing. Is it a state program, or a federal one? Who qualifies? Poor individuals, people with disabilities, or seniors?

Before discussing changes in the program, it's important to get our facts straight first. Let's go!

What is Medicaid?

Medicaid is complicated because the program is run by both the federal and individual state governments. The federal government sets the program's standards, but individual states manage it.

Each state is responsible for:

  • Determining population coverage
  • Delivering the healthcare
  • Paying doctors and hospitals

States are allowed to apply for a Section 1115 waiver if they want to try out new approaches or standards that may not be currently legal. These standards have to meet the program's overall goals, though.

As you can guess, this arrangement means Medicaid as a program varies widely by state. In addition, states have a strong interest in maintaining what they see as its integrity. That's primarily because of budgetary concerns.

We saw above how Medicaid makes up a large part of the federal budget. The same is true for each individual state budget. In fact, as of 2015, it made up over one-fourth of state spending.

States are reimbursed for their output by the federal government using a complicated formula. Prior to the American Care Act (ACA), states got back an average of 57% on Medicaid output.

As of 2014, they were eligible for 100% reimbursement, although that figure was phased back down gradually. Medicaid, then, is also a significant source of revenue for the states. In 2015, that figure came in around 57.7%.

In the next section, let's look at some of the states' goals concerning Medicaid.

States Interest When it Comes to Medicaid

Many of the Medicaid-related changes sought out by states were and still are a response to the ACA. Under that law, states were allowed to expand Medicaid coverage to individuals making more than 133% of the federal poverty level. For the first time, then, these people were suddenly eligible for Medicaid benefits.

33 states expanded their coverage, while 18 did not. This new population of recipients had not qualified for Medicaid before. Because of this, many states view them differently than the poor, disabled, or elderly.

There is a movement among states to encourage personal responsibility in this group. Many states feel these individuals should take a more active approach both to their personal finances and their health.

Interestingly, this view contrasts with another popular movement: Medicaid for all. Some state governments have tried to advance a program where anyone, regardless of income, could buy into the Medicaid program.

No state has been able to get this legislation through. It's a significant movement, nonetheless.

In the next few sections, let's see what changes in Medicaid states have enacted in 2018.

Retroactive Coverage

Let's say you have a stroke or a heart attack (we hope this never happens!). You are uninsured, and you go to the emergency room. There, you are treated successfully and are encouraged to apply for Medicaid.

In most states, once you qualify, Medicaid will cover your medical bills going back three months. This means your hospital bill will be covered, as well as any other recent eligible bills.

But, without retroactive coverage, you apply for Medicaid, it takes forever, and coverage begins on the first calendar day of the month.

Without a safety net, you might not be able to pay your hospital bill, which is bad for you. It's also bad for the hospital because they have to absorb the unpaid cost of your visit.

Even so, Iowa recently joined three other states that have eliminated retroactive coverage. The other states are Arkansas, Indiana, and New Hampshire.

All four of them expanded Medicaid coverage under the ACA. Yet, they all applied for an 1115 waiver to eliminate retroactive coverage and were approved by the federal government.

Now, in Iowa, no new Medicaid applicant can get retroactive coverage except pregnant women and children under 1. State officials are hoping this change will encourage people to apply for coverage when they are well. It also makes the program more like private insurance.

Work Requirements

Besides ending retroactive coverage, many states want work requirements tied to Medicaid aid. As of June 2018, these four states have federal approval to add Medicaid work requirements:

  • Arkansas
  • Indiana
  • Kentucky
  • New Hampshire

What's more, another seven states have work-requirement waivers pending. Other states are considering submitting them as well.

All these states want to impose work requirements on both expansion and non-expansion populations. This contrasts with Virginia. There, Medicaid expansion was approved but tied in with work requirements for the new recipients.

The states with approved or pending waivers need to exempt the following individuals from the requirements:

  • People with disabilities
  • Anyone who is medically frail

What that means exactly, though, is anyone's guess.

Supporters of work requirements believe Medicaid recipients who can work, should. Detractors, however, note many of them work already. But, their jobs do not provide health insurance or enough hours to enable them to buy insurance themselves.

Some States Are Hoping to Limit Medicaid Enrollees

Maine is a Medicaid battleground right now. Medicaid expansion was approved there by a ballot initiative, not through legislative action.

Now, the governor is refusing to follow through on the expansion. Deadlines have come and gone, and no expansion has occurred.

In addition, he wants to impose the strictest eligibility requirements in the nation. An 1115 waiver has been submitted asking applicants to undergo:

  • A work requirement (up to 64 years old)
  • Premium contributions (if total household income is lower than 51% of the poverty level or above)
  • As asset test
  • Elimination of retroactive eligibility

We'll have to wait and see how this battle ends. The governor just announced he'll go to jail before he'll expand Medicaid in Maine.

Obviously, other states are watching this situation closely!

Conclusion: Medicaid Changes of 2018

As you can see, Medicaid changes in 2018 are a contentious battleground. That makes things difficult for consumers. What will they be required to undergo to receive benefits? Are they still going to be able to receive their health insurance through Medicaid?

Hospitals and doctors, too, can also be left in the dark! Keeping up with all the changes can be hard!

Does your hospital or clinic administration need help with eligibility services? Or, maybe your facility has to improve its bad debt conversion rates?

If so, we are happy to help! Contact us today for more information. We'd love to hear from you!











Pete Ash

Pete is the Vice President of Sales & Client Services at DECO Recovery Management. He covers the Mid Atlantic region and specializes in Medicaid related topics. It is DECO’s Mission to maximize reimbursement to our clients by leveraging innovative technology, processes and compassionate advocates to provide exemplary service.

Categories: Medicaid

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