4 Ways That 1115 Medicaid Demonstrations Can Address Health Equity

Medicaid programs can use 1115 Medicaid demonstration waivers to expand health equity in four key ways, by expanding eligibility and benefits, filling gaps left by the Affordable Care Act, and offering more funding to providers to address their communities' health equity needs, according to an issue brief from Manatt Health.

First, the public payer programs can use these demonstrations to expand eligibility. The issue brief outlined four ways that states can use 1115 Medicaid demonstration waivers to bolster eligibility and, as a result, expand access to care.

States can utilize the waivers to implement global eligibility expansion, which enhances the program’s eligibility overall. This approach could be beneficial for states that have not adopted Medicaid expansion. 

Global eligibility expansion is slightly redundant in light of the Affordable Care Act marketplace enhanced subsidies and even without the enhanced subsidies if the global expansion seeks to exceed the benchmark for marketplace eligibility. States may prefer to work through the marketplace to provide more health plan options, the brief suggested.

In contrast with global eligibility expansion, targeted eligibility expansions are more refined to address health equity and care disparities through Medicaid eligibility. Many states use this approach to address mental healthcare and substance abuse care disparities, disparities for individuals in the justice system, and immigrant populations.

While HHS has not approved 1115 Medicaid demonstration targeted eligibility waivers that address specific racial or ethnic populations, the waiver can be used to support certain regions that may have a higher share of racial or ethnic minorities.

New Jersey, Rhode Island, Utah, and Michigan have been approved for targeted eligibility expansions.

Section 1115 Medicaid demonstration eligibility waivers are also helpful in addressing postpartum Medicaid eligibility. Studies show that postpartum Medicaid coverage can be essential to help reduce financial barriers for new mothers, particularly among racial minorities. Georgia, Illinois, Missouri, Virginia have approved postpartum eligibility extension waivers.

Providing continuous eligibility is another way Medicaid programs can advance health equity and prevent care disruptions. Under such a waiver, states can exceed the 12 months of continuous coverage they can offer to children through state plan amendments. They can also target adult populations with specific conditions to ensure uninterrupted care.

Montana and Utah have approved continuous coverage expansions.

Second, Medicaid programs can offer richer benefits through a 1115 Medicaid demonstration to reduce social determinants of health barriers that specific minority populations may face.

“Structural racism has resulted in divergent access to home ownership, transportation, asset accumulation, affordable and healthy food, clean air and water, employment, and educational attainment among people of color, and SDOH such as these contribute to where and how individuals live, which exacerbates health risks,” the issue brief explained.

“Given that Medicaid, by definition, serves populations with lower incomes—and Black, Latino(a), and other people of color disproportionately have lower incomes due to historical inequities and structural racism that underpin social and economic opportunities—states have a particularly strong imperative to understand and address SDOH to improve health outcomes.”

This type of expansion might also cover a larger group of providers, including peer support groups, doulas, and other community-rooted healthcare supports.

Nineteen states have enhanced benefits for mental healthcare and substance use disorder needs. Illinois, Virginia, and Washington have been approved for enhanced benefits for justice-involved individuals. California and North Carolina have been approved for enhanced social determinants of health benefits, and Maryland has been approved for enhanced provider coverage.

Third, states can offer coverage that wraps around Affordable Care Act marketplace offerings, filling any gaps that might leave specific populations without affordable coverage options. Massachusetts and Vermont have had cost-sharing subsidies passed.

Finally, states can leverage their expenditure authority to provide more funding to providers in underserved areas. This funding does not have to be restricted to hospitals and primary care providers but rather can include tribal healers, maternal health providers, and other types of community-based provider groups that often do not qualify for such funding.

California, Massachusetts, and Washington have been approved for capacity building waivers. Arizona, Rhode Island, and Washington have been approved for care delivery redesign. And prevention and early intervention waivers have been approved in Massachusetts and Washington.

Medicaid programs looking to leverage all available tools to address health equity should not overlook the impact of a 1115 Medicaid demonstration.