The Leaflet: The Time Is Now for State-Based Health Care Solutions

Published January 19, 2018

On January 12, a day after announcing its intention to help states reform their health insurance programs, the Centers for Medicare and Medicaid Services (CMS) approved Kentucky’s Section 1115 demonstration waiver, titled Kentucky HEALTH (Helping to Engage and Achieve Long Term Health).

Commenting on his state’s newly approved waiver, Gov. Matthew Bevin (R) said, “I was raised by a father who said, ‘Don’t take something that is not earned.'” That sentiment is reflected in the details of Kentucky HEALTH, which include premium payments and work requirements applying to non-pregnant, able-bodied adults (ages 19 to 64) with incomes up to 138 percent of the federal poverty line.

The waiver will grant to Medicaid enrollees a high-deductible ($1,000) health care plan, paired with a health care spending account that the state will initially fully fund for enrollees to cover deductible expenses and benefits not covered by the plan. In the first year of the program, premiums will be as low as $1 per month for the most impoverished enrollees, with a gradual increase to $15 per month for those earning more than 100 percent of the federal poverty line.

The program requires able-bodied recipients to work, participate in job training, or do qualified “community engagement” activities for at least 80 hours per month as a condition of their eligibility. The state will provide reasonable accommodations for truly vulnerable populations unable to meet those requirements.

Champions of this waiver say these rules will lessen dependence on government, encourage employment, and promote self-sufficiency. Officials project a drop of about one million enrollees over the five-year demonstration period and a savings of approximately $2.2 billion over the same timeframe.

In a recent op-ed for The Hill, Heartland Executive Editor Justin Haskins argues Medicaid reform would decrease enrollment and save money if implemented across the country. “Work requirements help to ensure only those who truly need assistance are enrolled in Medicaid. … The Foundation for Government Accountability projects Medicaid work requirements would cause Medicaid enrollment to drop by 13.6 million by fiscal year 2027 and save nearly $1 trillion over the next 10 years,” Haskins wrote.

Matthew Glans, Heartland senior policy analyst and author of the Heartland Policy Brief “Don’t Wait for Congress to Fix Health Care,” hails the Kentucky waiver as a model states should expand on when considering their own reforms to Medicaid. “The waiver’s approval signals that the Centers for Medicare and Medicaid Services and the Trump administration are truly open to the kind of systemic reforms that states need to transform their Medicaid program,” Glans wrote.

Arizona, Arkansas, Indiana, Kansas, Maine, New Hampshire, North Carolina, Utah, and Wisconsin have submitted their own waivers asking CMS for flexibility in how they administer and deliver their Medicaid services in order to improve quality, efficiency, and costs.

In addition to Section 1115 waivers, there are other innovative health care reforms states can adopt, such as passing price transparency laws, creating high-risk pools, expanding health savings accounts, integrating direct primary care programs, and encouraging telemedicine.

As Glans concludes in his Policy Brief, “States waiting for Congress to pass health care reform need wait no longer. Instead of being reactive to what’s happening in Washington, DC, state lawmakers should be proactive, applying for waivers from HHS to allow for more control over their Medicaid programs and adopting a state reform agenda.”

The Heartland Institute has been encouraging and assisting states to adopt compassionate and innovative health care reforms through the Medicaid and Obamacare waiver processes, pilot programs using direct primary care for Medicaid recipients, and other pioneering state reforms to improve health care outcomes, particularly for lower-income individuals. If you are interested in having Heartland help you in your state, please let us know by email at [email protected].

What We’re Working On

Health Care
Florida Should Eliminate Its Certificate of Need Laws
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines a proposed bill in Florida that would eliminate the state’s certificate of need requirements. “The Florida Legislature should consider rolling back these disruptive laws. Ideally, a full repeal of burdensome and unnecessary regulations such as CON laws should be applied across the board in Florida and in every other state, a move that would benefit all health care providers and their patients,” Glans wrote.

Budget & Tax
Pennsylvania Tackles Welfare Reform
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines Pennsylvania’s efforts to reform its welfare system. “The real focus of welfare programs must be to provide temporary or supplemental assistance while encouraging work and independence. States should also reform assistance programs that trap low-income Americans in poverty by disincentivizing work. Pennsylvania’s efforts are a clear step in the right direction and, along with Kansas, can serve as a model for other states to follow,” Glans wrote.

Popularity of Florida’s ESA Program Shows It’s Time for Universal Expansion
In this Research & Commentary, Policy Analyst Tim Benson writes about the popularity of Florida’s Gardiner Scholarship ESA program for special-needs students, which is now so popular it has exhausted its current level of funding. He argues the popularity of ESAs in the Sunshine State means the time has arrived for Florida to expand on the success of the Gardiner Scholarship Program with the creation of a new universal ESA program open to all K–12 students.

Energy & Environment
Why States Should Avoid Cap-and-Trade Schemes
In this Research & Commentary, Policy Analyst Tim Benson, citing the examples of California and the nine-state compact that makes up the Regional Greenhouse Gas Initiative, argues cap-and-trade programs do little to reduce carbon-dioxide emissions and instead act as a regressive tax that’s particularly harmful to low-income families. He recommends legislators avoid them, as well as other green-energy schemes such as carbon taxes and renewable portfolio standards.

From Our Free-Market Friends
The Case against Telemedicine Parity Laws
Katherine Restrepo, director of health care policy at the John Locke Foundation, writes about North Carolina’s relatively good regulatory climate when it comes to telemedicine practices. The Tar Heel State is one of only 18 states without a telemedicine parity law, which contributes to its robust telemedicine community. As Restrepo explains, “Parity laws force insurance companies to pay health care providers for services treated via telemedicine that are otherwise covered during an in-office visit.” Allowing patients to interact with doctors via an electronic device is particularly useful for those living in rural regions, which is important in North Carolina, a state officials say has 145 primary care shortage areas.



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