States of Reform

• Published date: 01 December 2016
• Date: 01 December 2016
• DOI: 10.1177/0160323X17699526
• Author: Phillip M. Singer
• Subject Matter: Articles

Article
State and Local Government Review
2016, Vol. 48(4) 246-258
States of Reform: Polarization,
ª The Author(s) 2017
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Long-term Services and
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DOI: 10.1177/0160323X17699526
Supports, and Medicaid Waivers
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Phillip M. Singer1
Abstract
A growing percentage of state budgets has been focused on caring for individuals who receive long-
term services and supports (LTSS). States have an important tool to reduce the costs of caring for
individuals with LTSS, Medicaid Section 1915(c) waivers. Using logistic regression, whether and
when a state decides to apply for a waiver during the years 1993–2014 is tested. Wealthier, larger
states are more likely to apply for waivers, while previous waiver applications are related to fewer
applications. The role of political polarization within the legislature has mixed results on whether a
state decides to apply for a waiver.
Keywords
Affordable Care Act, Medicaid, long-term services and supports
A growing percentage of state budgets has been
budgets, face a growing challenge in providing
spent on individuals who receive long-term ser-
care for individuals who are in need of LTSS
vices and supports (LTSS), with US$123 bil-
(Thomas and Applebaum 2015).
lion spent by Medicaid alone in 2013 (Reaves
States are given an important tool in their
and Musumeci 2015), with total expenditures
efforts to control costs and transform LTSS.
more than doubling since 2002 (Ng, Harring-
Section 1915(c) of the Social Security Act pro-
ton, Musumeci, and Reaves 2015). Nationally,
vides states the option to apply for a waiver and
thirteen million Americans receive long-term
circumvent federal regulations restricting
care (Kaye, Harrington, and LaPlante 2010).
where care is delivered. Traditionally, LTSS
Shifting demographics, especially among the
care was provided in institutions, including
aging population, expected to double over the
hospitals, intermediate care facilities, and nur-
next forty years, is driving this trend in
sing facilities, a costly setting for care. In the
increased spending (Federal Interagency
Forum on Aging-related Statistics 2012; Hagen
2013), with an estimated two-thirds of individ-
1 School of Public Health, University of Michigan, Ann
uals older than sixty-five requiring LTSS (Eng-
Arbor, MI, USA
quist et al. 2010). LTSS expenditures are not
only driven by the aging population, but indi-
Corresponding Author:
Phillip M. Singer, School of Public Health, University of
viduals with chronic conditions and disability
Michigan, 1415 Washington Heights, Ann Arbor, MI 48109,
are also increasing (Brault 2012). States, most
USA.
of which are required to annually balance their
Email: pmsinger@umich.edu

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Singer
247
past two decades, there has been a trend toward
polarization and partisan rancor was short-
providing care in home and community-based
lived, as the battle over reauthorization and
setting, including home care, adult day care, and
expansion of health coverage to additional chil-
foster care (Eiken et al. 2015), producing cost
dren in 2007 uncovered Congressional division
savings for the state (Kitchener et al. 2006).
over the program (Grogan and Rigby 2009;
While the governor of a state is responsible
Kenney 2008). Sixteen days after his inaugura-
to apply for a waiver, ultimately it is the presi-
tion, President Obama signed a Children’s
dent who has final authority to approve or reject
Health Insurance Program (CHIP) reauthoriza-
waiver applications (Thompson and Burke
tion package that was uniformly supported by
2007). Often the waiver application process is
Democrats and derided by former Republican
marked by negotiations between state and fed-
leaders who helped craft the original CHIP leg-
eral policy makers. Whether a state applies for
islation (Hatch 2009).
a waiver does not occur in a vacuum but is
What’s past is prologue when it comes to
rather influenced by national- and state-
polarization and partisanship during the debate
specific political and economic factors. This
and implementation of the most significant
article examines different factors that contribute
health policy development in the United States
to whether a state applies for a Section 1915(c)
in fifty years (Obama 2016), the Patient Protec-
waiver in any given year between 1993 and
tion and Affordable Care Act (ACA). While the
2014. Of particular interest is the effect that leg-
ACA is the culmination of a century of political
islative polarization and executive partisanship
effort and represents a major political and
have on waiver application decisions.
policy achievement for President Barack
Obama and his Democratic Congressional
allies, it is also the latest case study of the effect
Polarization and Health Care
of polarization among policy makers and the
The history of health-care policy in the United
American electorate.
States is marked by political polarization.
While Democrats were preparing health
Debate over various programs expanding insur-
reform legislation, Senate Minority Leader
ance coverage over the past century has high-
Mitch McConnell (Republican-Kentucky)
lighted a schism between the parties (Haeder
cajoled his Republican caucus that “It was
and Weimer 2015a; Peterson 1998; Starr
absolutely critical that everybody be together
2013; Tesler 2012). Prior to 1965, various inter-
because if the proponents of the bill (ACA)
est groups, most notably the American Medical
were able to say it was bipartisan, it tended to
Association and American Hospital Associa-
convey to the public that this is O.K., they must
tion, used health policy as a wedge issue
have figured it out . . . It’s either bipartisan or it
between Republicans and Democrats (Blu-
isn’t” (Hulse and Nagourney 2010). Through
menthal and Morone 2010; Steinmo and Watts
five Congressional committees and all floor
1995; Weissert and Weissert 2008; Wilsford
votes, only two Republicans voted for health
1994). Passage and implementation of Medi-
reform, though neither was for the final version
care and Medicaid in 1965 were marked by
of the bill (Herszenhorn 2009; Pear and Hers-
similar polarized dynamics between Democrats
zenhorn 2009).
and Republicans (Grogan 2008; Grogan and
The experiences of a little known compo-
Smith 2008; Oberlander 2003).
nent of the ACA, the Community Living Assis-
A brief respite of polarization came during
tance Services and Supports Act (CLASS Act),
the debate and passage of The State Children’s
are a case study of the polarized response to
Health Insurance Program in 1997 and the sub-
health reform. The CLASS Act was designed
sequent expansion of coverage in 2003. In both
to create a national voluntary LTSS insurance
instances, legislation passed with broad biparti-
program (Patient Protection and ACA 2010).
san support (Dubay, Hill, and Kenney 2002;
While the CLASS Act was voted unanimously
Iglehart 2007; Perrin 2007). This break in
out of the Senate Health, Education, Labor, and

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248
State and Local Government Review 48(4)
Pensions Committee with strong bipartisan
Why States Apply for Waivers
support (Manard 2010), the era of good feelings
At the national level, the federal government is
ended as soon as the bill hit the Senate floor,
more apt to grant waivers when Congress is
with Republicans voting unanimously to strip
highly polarized or when the financial costs
out the CLASS Act from the ACA. After health
of a program are high (Gormley 2006). Because
reform was signed into law, Republicans
the president has final approval over any waiv-
viewed the CLASS Act as ripe for repeal
ers, it is an opportunity for them to work with
(Krauthammer 2011). Beset by concerns over
governors who share similar policy goals
the financial solvency of the program, Secre-
(Thompson 2013). An analysis of a different
tary Kathleen Sebelius announced that the
type of health-care waiver, Section 1115, found
CLASS Act would not be implemented by the
that the political party of the president pre-
Obama administration (Aizenman 2011).
dicted that waiver applications were granted
(Schneider 1997). An evaluation of education
waivers after the No Child Left Behind Act
Section 1915(c) Waivers
found that wealthier, more populous, and con-
servative states were more likely to apply for
The CLASS Act can be added to a long list of
a waiver to modify the new federal program
failed Congressional attempts to address LTSS,
(Shelly 2012). Changes to federal policy can
stretching back to the 1980s (Caldwell and
also result in state action through waiver appli-
Bedlin 2014). While the federal government
cations (Allen, Pettus, and Haider-Markel
was unable to implement meaningful reforms
2004; Gardner 2013; Krane 2002).
to publicly funded LTSS systems, states can
From the states perspective, there has been
leverage the use of Section 1915(c) waivers in
mixed results on the effect that wealth has on
an effort to reduce LTSS expenditures. Section
states modifying their health and welfare pro-
1915(c) waivers allow the Health-care Financ-
grams. Early work has focused on the effect
ing Administration (now The Centers for
that socioeconomic variables have on state
Medicare and Medicaid Services) to waive
behavior (Dawson and Robinson 1963; Dye
Medicaid statutory limitations in the provision
1966; Schneider 1997; Tweedie 1994). Wealth
of home and community-based services (U.S.
has also been found to influence the likelihood
Public Law 1981). States are allowed to limit
of a state...