Don’t Expect Any State Flexibility Under Obama 2.0

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The “circle back” meme in the Biden White House isn’t limited to Jen Psaki’s avoidance of tough questions at press briefings. The Biden administration demonstrated that it also intends to circle back to the way things were under the Obama years when it comes to managing Medicaid. Rather than taking a cooperative approach to the state and federal partnership, Obama 2.0 is committed to running the program by decree and eliminating flexibilities that improve the program. Unfortunately, states hoping for true flexibility will be disappointed, as Medicaid flexibility has departed for Mar-a-Lago.

Last month, the Centers for Medicare & Medicaid Services (CMS) put several states on notice that their existing Section 1115 waivers are under review and could have their approval withdrawn. CMS cites the COVID-19 pandemic for cover but ultimately acknowledges that the administration’s real issue with the existing demonstrations is a concern that “allowing work and other community engagement requirements to take effect … would not promote the objectives of the Medicaid program.” Interestingly, certain beneficiaries’ requirements to work or volunteer for 20 hours a week met the Medicaid program’s objectives when CMS issued the waivers. So, what changed? Those waivers were granted during an administration that valued greater flexibility and cooperation with states. That’s all over now that the old Obama crew is back in town and running CMS again.