Medicaid is jointly funded and administered by the federal and state governments. Waivers permit states to circumvent federally mandated parameters in order to provide services beyond traditional Medicaid benefits, change the nature of the services being provided or conduct research into more effective and cost beneficial ways of administering services.
History
Medicaid was established in 1965 with President Lyndon Johnson's signing of the Social Security Act. It required states to provide health services to individuals and families whose finances were at or near levels that qualified for public assistance. In 1981, Congress passed the Omnibus Budget and Reconciliation Act, establishing Medicaid waivers that granted states greater flexibility in the administration and financing of benefits.
Types
There are three types of waivers: research and demonstration, freedom of choice, and home and community-based services. Research and demonstration waivers, also referred to as 1115, cover a broad assortment of pilot programs that test policy innovations. Freedom of choice waivers, known as 1915(b), permit states to implement managed care models for beneficiaries. Home and community-based services, or 1915(c) waivers, allow states to waive federal Medicaid requirements in order to provide long-term services in community settings as opposed to institutional settings.
Requirements
Research and demonstration waivers are managed by the Centers for Medicare and Medicaid Services, known as CMS, the Office of Management and Budget and the Department of Health and Human Services, and subject to terms and conditions devised by CMS. Freedom of choice waiver applications are approved by CMS. The program must not cost more than services provided under traditional Medicaid, and cannot negatively impact access to services and quality of care. Home and community-based services waivers are approved by CMS and must demonstrate that measures will be taken to protect the welfare of consumers and that provider standards meet the needs of members. Waivers must include a care plan and be cost neutral.
Legal Challenges
The 1999 U.S. Supreme Court decision, Olmstead v. L.C., established that medically unjustifiable institutionalization of people with disabilities who wished to remain in community settings violated the Americans with Disabilities Act and that states were required to remedy such discriminatory practices. In respect to Medicaid, the ruling ensured that disabled beneficiaries were entitled to inclusion in 1915(c) waivers.
Controversy
While Medicaid waivers intend to provide states with greater flexibility in administering to the specific needs of their population and allow for the testing of pilot programs that strive for innovation in health policy, the programs have come under scrutiny for enabling states to restrict benefits and access to care. Families USA and the National Health Law Program, consumer health advocacy organizations, have served as watchdogs for waiver programs that reduce quality and access to care and cost states more than traditional Medicaid.
References
- Centers for Medicare and Medicaid Services: Medicaid State Waiver Program Demonstration Projects
- National Health Policy Forum: The Basics - Medicaid and SCHIP Waivers
- Kaiser Commission on Medicaid and the Uninsured: Olmstead at Five: Assessing the Impact
- National Health Law Program: Waiver Watch
- Families USA: Waiver Tool Box
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