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GOP Governors Seeking 'Super Waivers' to Change Medicaid

  • June 14th, 2004

In 1995, the Republican Congress voted to effectively end the federal Medicaid program. But President Clinton vetoed the legislation, and Medicaid as we know it continues. Today, lawmakers wishing to reform the federal program are turning their attention to the states.

States are allowed to change their Medicaid programs by getting special approval of the federal Centers for Medicare and Medicaid Services (CMS). States submit waiver requests that permit them to do away with some requirement of federal Medicaid law. Historically, such waivers have been used to expand Medicaid services to new populations and have been modest in scope.

Now, the Republican governors of four states '“ Schwarzenegger in California, Bush in Florida, Rowland in Connecticut and Benson in New Hampshire -- are working behind the scenes with the Bush administration to gain approval of so-called "super waivers," which would allow them to turn their Medicaid programs into block grants in exchange for a great deal more flexibility in administering their programs.

What is a block grant? Under current law, the government shares the costs of Medicaid with the states. If more people go on Medicaid due to, say, a downturn in the economy, the federal government kicks in more money. But under a block grant arrangement, the state receives a finite pot of money to fund Medicaid. If the Medicaid rolls rise during a recession, that's the state's problem. Switching to a block grant formula, then, is risky for states.

In return for taking on this risk, the states would be permitted to change Medicaid rules and regulations that are now set by federal law. These changes could directly affect elderly nursing home residents.

To understand how, you need to know that there are really two kinds of Medicaid beneficiaries '“ those whom states must cover by federal law, and those whom it may cover at its discretion. The new flexibility the states are seeking would allow them to alter eligibility requirements and tailor or cut benefits for Medicaid recipients who are covered at the states' discretion. Importantly for the elderly, most nursing home residents are covered at the states' discretion, and their Medicaid coverage could change or end as a result of these waivers.

"Imagine," the Miami Herald writes in reference to the waiver being considered in Florida, "an Alzheimer's patient with $600 in monthly income needing nursing-home care and being turned away by Medicaid because the state's enrollment cap has been reached."

There may well be other states that are in similar discussions with CMS but that have not yet gone public. The governors of the four states we know about are still in the discussion stages with CMS and no waivers have been submitted. But alarmed legislators in two of the states, Connecticut and New Hampshire, have passed bills that would prevent their states from changing the Medicaid funding rules for at least one year.

Meanwhile, elder law attorneys and other advocates for the elderly in these states are working to make sure that these "super waivers" never get off the drawing board.

For an article in the Miami Herald on Gov. Jeb Bush's plans in Florida, go to: http://www.miami.com/mld/miamiherald/news/8513060.htm

Local Elder Law Attorneys in Ashburn, VA

Susan Pollack

Needham Mitnick & Pollack, PLC
Falls Church, VA

Jean Ball

Hale Ball Carlson Baumgartner Murphy PLC
Fairfax, VA

Margaret O'Reilly

Margaret A. O'Reilly, PC
Herndon, VA


Last Modified: 06/14/2004

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