HHS Proposal Would Give States ‘Flexibility’ to ‘Trim’ Medicaid Benefits

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 Baltimore Sun, states would be given the authority to "trim" Medicaid benefits for "optional" beneficiaries and to use the savings to expand Medicaid coverage to more people (Nitkin, Baltimore Sun, 8/5).
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).

According to the Washington Times, the administration's proposal is based on a similar plan proposed by the NGA in February. Under that plan, the governors said that states would be able to offer a "more modest package of benefits to people with higher incomes" (Price, Washington Times, 8/5).
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