As described in the previous chapter, some states have used Medicaid waivers authorized under Section 1115 of the Social Security Act to expand health coverage for low-income people, and that expansion has been able to reach many people experiencing homelessness or who were formerly homeless. Section 1115 authorizes demonstration programs, which give states flexibility to test approaches to financing and delivering health care services while sharing costs with the Federal Government through the Medicaid program. These waivers must be budget neutral to the federal Medicaid program, meaning that the waiver programs, over a five-year period, must result in less federal expenditure than if the demonstration program were not implemented. Often the expansion of mandatory enrollment of other current Medicaid beneficiaries into managed care plans is a state strategy for achieving savings. Chapter 6 takes a closer look at these managed care strategies.
Coverage expansion programs approved since the enactment of the Affordable Care Act were often intended to provide a "bridge to reform," meaning that the program offered an opportunity to provide some form of coverage and access to health care for many people who would become eligible for Medicaid enrollment in January 2014 in states that chose to implement the Affordable Care Act's incomebased eligibility expansion. While the specific provisions of each state's Medicaid waiver differed in important ways, often the same income limit was used to define eligibility under the waiver.
The eligibility criteria, enrollment process, and benefits package specified in the terms of a state's Medicaid waiver for newly eligible program participants could differ in some ways from that of the state's Medicaid program for people who are categorically eligible. For example, people eligible for enrollment through the waiver could have been limited to a smaller network of hospitals and other health care providers than were available to the entire Medicaid population. To put this differently, jurisdictions operating under the 1115 waiver selected a limited number of hospitals and health care providers that could receive Medicaid reimbursement for care they provided to people enrolled under the waiver. Providers participating in the waiver usually included county hospitals and clinics and other community clinics and teaching hospitals affiliated with county health departments that were part of the health care "safety net." Those providers serve a disproportionately large number of indigent and uninsured patients, which is the population these 1115 waivers were designed to reach.
As noted in Chapter 2, two case study communities, Los Angeles and Cook counties, used waivers to expand coverage. In 2011, under the terms of California's 1115 waiver allowing its counties to develop such plans, Los Angeles County established a Low Income Health Program, Healthy Way LA. To expand Medicaid coverage to uninsured low-income adults in Cook County starting in January 2013, the state of Illinois received approval in late 2012 for a similar 1115 waiver targeted specifically to Cook County/Chicago.