"No wrong door" poses these challenges for Medicaid
The Medicaid expansion and the availability of premium credits for people with incomes up to 400% of the poverty line mean that millions of uninsured people will be able to get help paying for health coverage. "But, people will not necessarily know which program is right for them and their families," says Judy Solomon, a senior fellow specializing in Medicaid and the Children's Health Insurance Program (CHIP) at the Washington, DC-based Center on Budget and Policy Priorities.
So that people applying for coverage do not have to figure this out on their own, the Patient Protection and Affordable Care Act (PPACA) establishes a "no wrong door" policy for Medicaid, Children's Health Insurance Program (CHIP), and premium credits.
"The Secretary of [the U.S. Department of Health and Human Services] HHS will design a single, streamlined application for all three programs that states can use," says Ms. Solomon.
As much as possible, states will limit paperwork by verifying that applicants meet eligibility requirements, such as citizenship or legal immigrant status and income, by matching data available from Social Security and the Internal Revenue Service. Medicaid and CHIP programs will adopt the same definition of income as the health insurance exchanges, a new mechanism for consumers to purchase coverage created by PPACA, will use for the premium credits.
"Achieving simple, streamlined enrollment as envisioned by the health reform law does present challenges for both states and the federal government," says Ms. Solomon. Here are three:
The subsidies for coverage in the new state insurance exchanges will be delivered through tax credits.
Eligibility and the amount of the tax credits will, in most cases, be determined based on prior-year tax returns. Eligibility for Medicaid and CHIP, in contrast, is generally based on a family's current income.
"The administration needs to develop rules to address these different approaches, so people don't fall through the cracks and fail to receive assistance for which they qualify," says Ms. Solomon.
For example, someone might present a prior-year tax return at the exchange and be told that he or she appears to qualify for Medicaid rather than a premium subsidy. "But that same person then could be denied Medicaid coverage, because his or her current income is too high," says Ms. Solomon.
States receive a much higher federal matching rate for services delivered to people who become eligible because of the health reform law's Medicaid expansion than for services delivered to other Medicaid beneficiaries.
Therefore, states must establish methods of identifying new eligibles. "These methods should not require that each applicant is first processed using the new rules to determine eligibility and then processed under the old rules to determine which federal matching rate applies," says Ms. Solomon.
State budget shortfalls have resulted in layoffs and early retirements among state employees, including experienced Medicaid policy staff.
Even though the coverage expansion does not begin until 2014, planning for system and policy changes, staff training, and other key tasks needs to begin as soon as possible.
"The federal government could help, both by getting early guidance to states on the changes in Medicaid's income rules and by developing online applications and data exchange systems that states could use," says Ms. Solomon.
Great potential
In terms of how HHS is going to interpret the health care reform legislation, there are still many unknowns. However, Stan Dorn, a senior fellow at the Urban Institute in Washington, DC, says "there is great potential to take these good practices in a small number of states and spread them throughout the country."
For example, the legislation says that HHS should develop a single application form for Medicaid, CHIP, and the new tax credits provided under reform. "In each state, the agencies that determine eligibility for these different subsidies need to develop a working relationship. Once consumers complete the application form, it is processed seamlessly. The consumer receives word of any subsidies for which he or she is eligible," says Mr. Dorn.
The redefinition of Medicaid and CHIP eligibility, based on modified adjusted gross income, could potentially make it much easier to determine eligibility than in the past. However, Mr. Dorn says there are concerns.
"We don't know how HHS will address the situation of changing family circumstances. Family income may change a lot, and we don't know how the issue of claiming enhanced federal matching payments will be addressed," says Mr. Dorn.
In the future, income will be the sole determining factor for eligibility for adults. However, whether the state claims standard match or substantially increased match depends on whether the adult would have qualified for Medicaid under state law in 2009.
"So, we don't know how much information states will have to gather about things like assets, which [were] relevant in 2009 but will no longer be relevant starting in 2014," says Mr. Dorn. "It seems to me there are other ways to go besides putting these questions on the application form. But all of this needs to be sorted out."
Another potential stumbling block is the fact that the legislation doesn't include much funding for community organizations to facilitate enrollment. "The bill says that exchanges need to have patient navigator contracts with various kinds of organizations. Among the functions is helping individuals enroll into coverage, but there are other functions as well," says Mr. Dorn.
Also, there is no federal funding past the health care information exchanges' first year of operation, so after that point the exchanges will need to raise money themselves. "I worry that there will not be enough resources to help consumers enroll and maintain coverage," says Mr. Dorn. "Also missing from PPACA is funding for public education efforts to help the public understand available subsidies."
In contrast, Massachusetts laid the groundwork for increasing enrollment with a major public education effort. "Of course, we've got plenty of time between now and 2014. But we don't yet know if the federal policymakers will come up with the money for public education efforts," says Mr. Dorn.
Contact Ms. Solomon at (202) 408-1080 or [email protected].
The Medicaid expansion and the availability of premium credits for people with incomes up to 400% of the poverty line mean that millions of uninsured people will be able to get help paying for health coverage.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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