News Briefs: CMS Rescinds 2020 Guidance on Medicaid Demonstration Projects
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Jan 17, 2025
CMS Deputy Administrator Daniel Tsai on Jan. 16 wrote a letter to state Medicaid directors telling them the agency was rescinding guidance it had provided in January 2020 on a Healthy Adult Opportunity (HAO) demonstration. The HAO policy introduced by the first Trump administration allowed states to apply for and use Section 1115 waivers “to set additional conditions of Medicaid eligibility, establish additional premiums and cost-sharing, and adopt alternative demonstration financing for participating states,” according to Tsai. He wrote that approving a waiver based on the January 2020 letter “would raise legal conflicts with the core statutory objective of Medicaid,” but he added that CMS “will consider states’ applications for Section 1115 demonstration authority on a case-by-case basis to determine whether they satisfy the requirements for approval under Section 1115 of the Social Security and CMS regulations.” KFF noted in a February 2020 overview of the HAO that the demonstration could allow states to impose additional eligibility requirements, including work requirements. Several states did indeed use that flexibility to get work requirements demonstrations approved, but only one ever fully operationalized such a program amid a flurry of legal challenges. Ahead of the second Trump administration, Ohio’s Dept. of Medicaid in late 2024 applied for a waiver to implement work requirements in its Medicaid program.
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