Shannon M. McMahon, MPA

September 8, 2014


The Medicaid expansion efforts of 2014 have been life-changing for the 7.2 million individuals who now have health coverage and access to care due to the Affordable Care Act (ACA).  While just over half of the states have elected to expand their existing Medicaid programs, many are considering options that would expand Medicaid for adults below 138 percent of the federal poverty level (FPL).

Motivated by the opportunity to provide health coverage for their most vulnerable residents and receive enhanced funding to do so, many states are balancing the political consideration of expanding an entitlement program by including premiums, cost-sharing, and rewards for healthy behaviors while still offering Medicaid or Medicaid-like coverage to the newly-eligible population. Following in the footsteps of Arkansas, Iowa, Michigan and New Hampshire, Pennsylvania recently received federal approval for an §1115 waiver that will provide coverage to more than 500,000 residents beginning January 1, 2014.

Earlier today, Virginia Governor Terry McAuliffe held a press conference announcing his intention to take an interim step toward Medicaid expansion.  While a legislative stalemate made a traditional Medicaid expansion difficult if not impossible, today’s announcement may be a move toward a full Medicaid expansion.  Virginia’s Medicaid agency will initiate the §1115 waiver application process to create a benefit package that will enable persons with serious mental illness (SMI) to have access to both behavioral health and primary health services. While not a full benefit package available to the entire Medicaid expansion population in Virginia, this program will allow the state to leverage federal funding to provide a defined set of services to a very vulnerable subset of the state’s uninsured population with SMI.

The National Association of State Mental Health Program Directors reported that individuals with SMI have significantly decreased longevity, and in fact, die an average of 25 years earlier than individuals without SMI. Without access to treatment, individuals with SMI are often unnecessarily hospitalized, may be unable to find and sustain employment, become entangled in the criminal justice system, struggle with affordable housing, and suffer from social isolation. With access to coordinated care, effective treatment is available that can help individuals with SMI overcome these challenges, stabilize their conditions and become productive citizens.

While an §1115  waiver is not a new way to initiate an expansion, the idea of serving a subset of the adult Medicaid expansion population with a specific set of health conditions under a more narrowly defined set of essential benefits is a departure from the approaches of the other recently-awarded waivers.  With this targeted proposal, Virginia is taking the first step toward joining Pennsylvania and perhaps other states in finding an alternative way to use the opportunity created by the ACA to improve the lives of a vulnerable set of its citizens.

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