CMS Blocks Work Requirements, Cost-Sharing in 1115 Medicaid Demo

CMS has revoked the state of Georgia’s ability to impose work requirements or cost-sharing for Medicaid eligibility.

CMS had approved the Georgia Pathways to Coverage section 1115 demonstration waiver, but the state had not yet implemented the demonstration.

The press release noted that the decision to eliminate Georgia’s Medicaid demonstration section 1115 authority on this matter aimed to align with the Biden administration’s health equity endeavors. Additionally, the new variants that emerged since CMS approved the waiver have injected greater uncertainty and more caution into the agency’s approach.

“CMS believes that the COVID-19 pandemic and its expected aftermath have made the state’s work requirement infeasible,” CMS Administrator Chiquita Brooks-LaSure wrote in a letter to Caylee Noggle, commissioner of Georgia’s Department of Community Health. 

“In addition, implementation of the work requirement to suspend coverage or disenroll beneficiaries who become eligible under the demonstration during the public health emergency for COVID-19 would currently not be in compliance with the Families First Coronavirus Response Act (FFCRA)4 temporary increase in federal Medicaid funding, which is conditioned on the state’s maintenance of certain existing Medicaid parameters.”

Georgia will not have the authority to implement work requirements nor will the state be able to raise premiums as it proposed in its section 1115 application. The Georgia Pathways to Coverage waiver application, submitted in December 2019, suggested employing premiums and copayments for beneficiaries whose incomes fall between 50 and 100 percent of the federal poverty level.

In its application for the section 1115 demonstration waiver, the state pitched cost-sharing as a way to help members prepare for commercial health insurance coverage. Premiums would have been determined on a sliding scale and would not exceed two percent of the household income. 

The premium dollars would go toward the household’s member rewards account, a fund which beneficiaries could use to cover copayments and other health services not covered under Medicaid. The plan also included copayments for non-emergency utilization of the emergency room.

However, in the agency’s press release, Administrator Brooks-LaSure argued that cost-sharing can become a barrier to accessing coverage. In particular, premiums and copayments can form barriers for low-income and Black beneficiaries.

This response from the Biden administration was not a surprise. CMS had already indicated that it might reconsider permitting Georgia to wield this authority. As a series of letters back and forth between CMS and the state show, the agency had alerted state authorities in February 2021 that it might withdraw its approval for the waiver.

CMS instructed the state to provide any information that might dissuade the agency from rescinding the approval. 

Then-commissioner Frank Berry pointed to the broad range of activities that were considered eligible for the work requirement, which included not only employment but also education, volunteer work, and other activities. Incentivizing these activities might be beneficial for the health and wellbeing of beneficiaries, the state’s letter argued.

However, CMS clearly voiced its dissent in revoking the state’s authorities.

Georgia has not yet expanded its Medicaid program. In April 2021, it was one of five states that had not embraced Medicaid expansion to achieve the highest enrollment on the Affordable Care Act marketplace during the special enrollment period. Georgia saw over 40,000 plan selections on the Affordable Care Act marketplace, the third-highest number of selections as of April 2021.

The state has also had a controversial history in regards to its individual health insurance marketplace. In October 2020, the state moved ahead with its individual health insurance marketplace reform even though some experts in the industry warned against it.

Around the time that CMS made its final announcement regarding the Georgia Pathways to Coverage waiver, states were implementing section 1115 waivers in order to address postpartum coverage as well as to bolster states’ responses to the coronavirus pandemic.