Approved bridge waiver gives "preview" of Medicaid expansion

The approval of a Bridge waiver in January 2011 "rescued" Washington state's Basic Health plan, according to Doug Porter, the state's Medicaid director, and should give the state a preview of Medicaid expansion. "We're now drawing down federal matching funds for a program that was previously all state funded," he says.

By going the waiver route, says Mr. Porter, Washington was able to avoid changing its state plan to cover more people, which other states have had to do in order to expand Medicaid coverage.

Mr. Porter gives the example of Connecticut, which increased eligibility for people previously not categorically eligible for Medicaid, but without any limit on how many people can enroll in the program. "We were able to negotiate a capped enrollment in our program," he says. "We don't have to add anybody else to the rolls, even if they meet the same eligibility requirements."

The state doesn't intend to add anyone onto the program until the expansion of Medicaid in 2014, adds Mr. Porter, unless the legislature provides funds to add additional people. "As we look at our revenue forecast, that does not look likely between now and 2014," he says.

Washington's governor had proposed eliminating the Basic Health program in her budget, notes Mr. Porter, even after the waiver was approved.

Ultimately, the decision was made to sustain the Basic Health program at its current level, he says, and instead reduce the rates paid to hospitals, long-term care facilities, and Federally Qualified Health Centers.

"The legislature adopted an approach of 'don't eliminate services to people, cut the rates paid to providers instead,' to save an equivalent amount of money," says Mr. Porter. "The bad news is we're getting sued by the hospital association, protesting that rate cut. It remains to see how that's going to play out."

The most difficult part of negotiating the bridge waiver with the Centers for Medicare & Medicaid Services (CMS) involved the cost sharing provisions that already existed in the Basic Health program, says Mr. Porter, which comprise about 7% of the client's household income. CMS has long held that cost-sharing should not exceed 2% of the client's household income, he adds.

"They approved it for 30,000 clients in Basic Health, but now we are asking them to approve it for ten times that number of adults coming on the program," says Mr. Porter. "I think that will be a major source of negotiation."