How Will Section 1115 Medicaid Expansion Demonstrations Inform Federal Policy?

Section 1115 of the Social Security Act allows the U.S. Department of Health and Human Services and states to test innovations in Medicaid and other public welfare programs without formal legislative action. Six states currently operate their Medicaid expansions as demonstrations and several more are expected to seek permission to do so. While the current Medicaid expansion demonstrations vary, they share a major focus: increasing beneficiaries' financial responsibility for the cost of coverage and care. Demonstrations include requirements that Medicaid beneficiaries pay enrollment fees and cost-sharing that exceed traditional Medicaid limits. Others propose tying beneficiaries' financial responsibility to behavioral changes in health and wellness, while still others impose penalties for nonpayment of enrollment fees. Evaluations must consider the impact of these requirements on access, use of care, and health status, as well as the feasibility of demonstration reforms and their impact on administrative efficiency, providers, and health plans.