Recently, the federal agency that oversees Medicaid, the Centers for Medicare and Medicaid Services, approved Kentucky’s request for a “Section 1115 Waiver” to significantly alter Kentucky’s Medicaid program. The waiver includes several components that have never been approved in the 50-year history of Medicaid, including mandatory work requirements, new fees and more burdensome administrative requirements.
The Bevin administration projects that at least 95,000 people will lose Medicaid coverage, and implementation will be expensive. Research shows it is virtually certain that health outcomes will decline if this waiver moves forward.
Being both novel and controversial, the waiver is being challenged in court on the grounds that CMS lacks authority to approve it. Federal agencies like CMS possess only the statutory authority given to them by Congress; Congress passes the laws, and an agency’s job is to implement them. Agencies may choose from a range of reasonable policy options, but they must stay within the boundaries established by Congress.
Here, Congress has determined who must be eligible for Medicaid, a minimum set of benefits and other conditions of the program. In addition, Congress gave CMS the flexibility to waive certain Medicaid provisions to allow states to test new approaches for providing medical care to beneficiaries.
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However, Congress did not authorize CMS to approve new barriers to access for otherwise eligible people — for example, mandatory work, minimum physical activity levels, or required visits to the doctor. Any of these may correlate with better health, but Congress simply didn’t allow CMS to give state governments power to deny people health care when they otherwise qualify for Medicaid.
In addition, CMS can only approve waivers that are likely to further the objectives of Medicaid, which has always been intended to help vulnerable individuals get the health care they need. By creating new barriers to care, this waiver is more likely to worsen health than to improve it.
The Affordable Care Act remains the law of the land, and under it eligibility for Medicaid is determined solely by income — not by work status, physical activity, or other such factors.
The ACA’s Medicaid expansion is a straightforward agreement between states and the federal government: States must cover all individuals under 138 percent of the federal poverty level, and the federal government will fund 90 percent of the cost. States may accept or reject the expansion — but they may not rewrite the bargain solely on their own terms, either by adding new eligibility requirements, covering only select groups of people, or limiting the benefits required by law.
Only Congress can change those rules, and CMS cannot bypass the law as it currently exists.
In all likelihood, it will fall to a court to determine this waiver’s legality. Regrettably, Bevin is attempting to circumvent the judicial process. On Jan. 12, he issued an executive order in which he threatened to end Kentucky’s Medicaid expansion if a court finds any part of the waiver invalid.
This ultimatum is unnecessary political posturing. If a court invalidates the waiver, Kentucky remains free to resubmit a waiver application with terms that CMS can legally approve. And, as Bevin has repeatedly stated, it’s unclear whether this waiver will save the commonwealth money, so no financial need compels an end to the expansion.
If it moves forward, this waiver will result in foreseeable, dire consequences for those impacted, destroying Kentucky’s nation-leading gains in health. In approving such a damaging waiver, CMS has arguably exceeded its authority by allowing Kentucky to rewrite the ACA and longstanding Medicaid law on terms never intended by Congress.
If a court agrees, Kentucky’s existing Medicaid expansion will remain in place unless the governor attempts to follow through on his threat. If that day comes, the health — and in many cases, the lives — of the 500,000 Kentuckians in the expansion program will hang in the balance.
Emily Whelan Parento, former executive director of Kentucky’s Office of Health Policy, is associate professor of law at the University of the Pacific McGeorge School of Law. Nicole Huberfeld, former associate dean for academic affairs at the University of Kentucky College of Law, is professor of health law, ethics and human rights at Boston University School of Public Health.