Trends in Medicaid in 2019

McGuireWoods Consulting

Medicaid remains dynamic and evolving, and 2019 is likely to see many changes in the program. Some of the trends include expansion, work requirements, inclusion of the use of institutions for mental diseases (IMDs) for behavioral health, telemedicine, and states’ attempts to control drug costs. 


The 2018 election was significant for Medicaid and expansion supporters. Three states passed ballot initiatives to expand Medicaid. In addition, Kansas elected a Democratic governor who ran on expanding Medicaid. Maine’s expansion of Medicaid was blocked by a governor who refused to implement a Medicaid expansion plan and asked the federal government to not approve the waiver the state submitted. In January, that state will have a new governor, one who plans to expand Medicaid.

Work Requirements

On March 14, 2017, the Centers for Medicare and Medicaid Services (CMS) sent a letter to governors signaling a willingness to use Section 1115 authority to support work requirements and the alignment of Medicare programs with private insurance policies. On Jan. 11, 2018, CMS posted new guidance for state Section 1115 waiver proposals conditioning Medicaid on meeting a work requirement. New Hampshire became the most recent state in 2018 to obtain approval to institute work requirements. A lawsuit related to Arkansas’ implementation of work requirements was filed in August. At a recent hearing, both Arkansas and the federal government argued that even if the government exceeded its authority when it approved the work requirements, the requirement should stay in place while the government fixes any shortcomings the judge may find. As of Dec. 7, 2018, states with pending waivers for work requirements included Alabama, Arizona, Kansas, Maine, Michigan, Mississippi, Ohio, South Dakota, Utah and Virginia. Those with approved waivers include Arkansas, Indiana, Kentucky, New Hampshire and Wisconsin.

Behavioral Health

Eighteen states have waivers to permit the use of facilities with fewer than 16 beds (known as the IMD exclusion) for the treatment of substance abuse disorders. Those states are Alaska, California, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Maryland, North Carolina, New Hampshire, New Jersey, Pennsylvania, Utah, Virginia, Vermont, Washington, Wisconsin and West Virginia. Ten more states have pending waivers: Arizona, Delaware, Kansas, Maryland, Minnesota, Mississippi, New Mexico, Rhode Island and Tennessee. One state, Vermont, has a waiver to use IMD for mental health treatment while three — Kansas, Minnesota and Rhode Island — have pending waivers.   

Lifetime Limits

Arizona and Kansas sought to limit Medicaid coverage for some beneficiaries. Arizona initially proposed adding a five-year maximum lifetime limit on coverage for some beneficiaries, but withdrew that request from ongoing waiver discussions. In May 2018, CMS rejected Kansas’ proposal to impose a lifetime limit on Medicaid benefits for eligible beneficiaries. 

Retroactive Coverage

Florida recently won approval to eliminate retroactive eligibility, which gives people 90 days of Medicaid coverage prior to their application date. Florida also did not expand Medicaid and does not plan to do so. Other states whose waivers were approved with restrictions on coverage and time limits include Alaska, Iowa, Indiana, Kentucky, New Hampshire, Florida and Utah. Three states have pending waivers: Arizona, New Mexico and Maine.

Controlling Drug Costs

States have few permissible tools to control drug costs. Massachusetts proposed letting the state limit the drugs it covers in Medicaid, but the federal government rejected that request.  Oklahoma and Michigan, however, secured federal approval for a value-based drug purchasing program. Oklahoma’s waiver was approved in June, and Michigan’s in November.  

Telemedicine Use

The Center for Connected Health Policy reports that 10 states have amended their telehealth policies since August 2016 to specifically make the patient’s home an originating site for Medicaid-accepted telehealth and telemedicine programs. Those states are Delaware, Colorado, Maryland, Michigan, Minnesota, Missouri, New York, Texas, Washington and Wyoming. The center also notes that six states have eliminated the geographic requirement altogether since 2013, and 16 states added schools to the list of approved originating sites, though some are placing restrictions on those services. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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