On Friday, the Centers for Medicare and Medicaid Services (CMS) announced some good news for Arizona’s children and families. On the heels of the positive waiver decision in Ohio and just hours before Arizona’s current waiver was set to expire, CMS approved Arizona’s waiver without proposed provisions that would impede low-income adults from accessing health care. Initially, Arizona wanted to put in place some harmful provisions required by the legislature, which would have made it harder for low-income adults to enroll in and maintain Medicaid coverage. Thankfully, CMS said no.    

In its letter to Arizona, CMS once again showed its commitment to protecting Medicaid from changes that create barriers to enrollment and hamper low-income adults’ ability to maintain their health insurance coverage. CMS rejected Arizona’s proposals to establish:

  • work requirements
  • lock-out periods
  • premiums for enrollees under the federal poverty level 
  • a five-year lifetime limit on coverage

Despite CMS’ rejection of the most harmful provisions of the proposal, several of the approved elements could pose barriers for some enrollees. Arizona can now create accounts where enrollees with incomes above the poverty level must deposit payments toward premiums. If enrollees fail to pay their premiums, Arizona can dis-enroll them from Medicaid. However, enrollees cannot be locked out for six months as the state requested. CMS also said Arizona can establish a “healthy behaviors” program that allows enrollees to meet certain goals and be “rewarded” with reduced premiums. As we have seen in Indiana, these types of accounts and healthy behavior programs are confusing to beneficiaries and don’t promote healthy behaviors as intended. Arkansas recognized these issues with health savings accounts and has completely eliminated them from their pending “Arkansas Works” demonstration waiver.

CMS’ decision to reject some of the worst parts of Arizona’s waiver means that the state’s low-income children and families will continue to benefit from access to Medicaid coverage. Although the approved waiver mainly addresses coverage for adults, it will still mean good things for kids. Prior to the ACA, adults with children could only enroll in Medicaid if their income was very low. But thanks to the ACA, Medicaid now provides coverage for adults up to 138 percent of the federal poverty level. Many of these newly eligible adults are mothers and fathers—making parents a key beneficiary of Medicaid expansion. When parents are able to enroll in coverage, it is more likely that children will have coverage, too. Access to coverage also means that parents are more likely to be healthy and as a result will be better able to care for their children. This is particularly true for women who may be experiencing maternal depression. Enrollment in health insurance also leads to greater financial stability for the entire family because unexpected medical expenses will not break the bank.

CMS’ decision to reject work requirements and other program structures proposed by Arizona suggests yet again that they are unwilling to approve certain types of restrictions on Medicaid expansion populations – particularly in states that already have expanded coverage. It’s especially promising news for Kentucky, where Governor Bevin has submitted a highly detrimental set of program requirements to CMS, despite the success of the expanded Medicaid program there. The CMS decision in Arizona suggests the agency might also protect Kentucky’s program from lock-out periods, work requirements, and other provisions that would lead to reduced coverage.

Public comments for the federal comment period are due to CMS on Kentucky’s proposal later this week. Community Catalyst will be weighing in so stay tuned for developments on that waiver.