HHS Initiative Reaches Uninsured, Stays Budget Neutral

Published September 1, 2001

HHS Secretary Tommy G. Thompson announced on August 6 a new initiative designed to make it easier and faster for states to expand access to health insurance coverage for low-income individuals through Medicaid and the State Children’s Health Insurance Program (SCHIP).

The Centers for Medicare & Medicaid Services (CMS), formerly the Health Care Financing Administration, oversees the joint federal-state Medicaid and SCHIP programs. “We intend to use today’s technology to speed up and simplify the process and cut down on the bureaucratic red tape and paperwork that stifles new approaches to expanding health coverage,” Thompson said.

“By increasing flexibility, promoting innovation, and demanding accountability, we are giving states more options to increase the number of individuals with access to affordable health insurance.”

“Our goal is to give governors the flexibility they need to expand insurance coverage to more Americans through innovative approaches, including the kind of health insurance options available in the private sector,” Thompson said in an August HHS news release. “Through this initiative, we are creating a new, simpler process for states to propose and implement creative ideas to help uninsured residents.”

Flexibility and Accountability

The Health Insurance Flexibility and Accountability Initiative will give governors more flexibility to coordinate their Medicaid and State Children’s Health Insurance Program to expand access to health care coverage:

  • States will have more flexibility to design benefit packages that will promote expanded access to health care coverage and meet the needs of residents.
  • Special emphasis will be placed on coordinating Medicaid and SCHIP with private-sector insurance programs to achieve seamless coverage for low-income individuals.
  • In exchange for up-front flexibility, states will be required to set goals for reducing the number of residents without health care coverage and then document their progress toward reaching that goal.
  • A new electronic application will make it quicker and easier for states to propose and implement new approaches to promote access to health care coverage.

As former governors, President George W. Bush and Secretary Thompson consider it a high priority to simplify the process governors use to submit Medicaid and SCHIP waiver requests and to have those requests considered promptly. The new initiative represents the latest in a series aimed at promoting state innovations to strengthen and improve these programs.

The new approach will encourage states to design benefit packages best suited to meet the needs of their residents. Instead of a “one-size-fits-all” approach, a state could make different benefits available to various populations, enabling the states to expand health care coverage to more individuals and families who may not otherwise be eligible for Medicaid or SCHIP under current law.

Importance of Innovation

The initiative will also make it easier for states to operate demonstration projects designed to extend health care coverage to currently uninsured residents. As in the past, the new initiative requires these projects to be budget neutral: states will have access to the same amount of federal funding under the demonstration than they would have received under current law.

Bush and Thompson both recognize state innovations are critical to reducing the number of Americans without health insurance. In the past, red tape and a slow federal review process delayed or prevented many governors from implementing new approaches to expanding access to health insurance coverage through the Medicaid and SCHIP programs.

Since January 22, CMS has approved 910 new and pending Medicaid and SCHIP amendments and waivers (see “CMS Encourages Innovation”). Collectively, these changes have made more than 800,000 additional people eligible for health care coverage across the country. In addition, these changes increased benefits for 2.5 million people already covered through Medicaid and SCHIP.

At the same time, states have significantly improved their programs: Thirteen states have simplified eligibility, and 34 are implementing innovative delivery systems.

For more information . . .

States wishing to take advantage of the HHS initiative for expedited review of waiver requests can use a new online application available at the Web site of the Centers for Medicare & Medicaid Services (CMS) at http://www.hcfa.gov/medicaid.