Customizing Coverage Gap Solutions: Update on State Approaches and Variations
Just weeks away from the March 31 closing of the Affordable Care Act’s (ACA) open enrollment period for 2014, thoughts are turning to how to help the folks who will remain uninsured. The open enrollment process has brought home to low-income Texans—and the community groups and health care providers helping them to apply—the stark reality of the Coverage Gap: the lack of an affordable coverage option for an estimated one-million-plus working-age, US citizen Texans living below the poverty line, both with and without dependent children.
As of today, 25 states are moving ahead with the ACA’s Medicaid Expansion or a state-customized alternative. Of those, 22 are using Managed Care to deliver coverage, which requires no special “waiver” approval from federal Medicaid officials. Another three (AR, IA, MI) are closing their Coverage Gaps with managed care plus “1115 waivers,” special agreements with the federal Medicaid agency that can allow states to test out new approaches.
One more state, PA (the 26th state), recently submitted its formal 1115 waiver request to close the Coverage Gap, and negotiations will follow.
NH, UT and VA (that would make 29) are all in legislative processes around closing the Gap. The NH Senate approved a bill to pursue a Medicaid Managed Care-1115 waiver approach and sent it on to a supportive House.
Both UT and VA adjourned their legislatures without completing the Coverage Gap conversation, but their Governors have signaled they will call special sessions to work on the issue.
Looking further ahead, ME, IN, and OK are all looking at the upcoming end dates/renewals of their Medicaid 1115 waivers, and discussions around how to maintain the successes gained from these waivers are expected to also involve consideration of Coverage Gap solutions.
Common themes: what has been approved?
When tracking state’s Coverage Gap proposals, be sure to notice whether or not a proposed state variation has received federal approval. For example, several states have expressed interest in requiring premiums for folks below the poverty line, but so far only premiums for individuals above poverty have gained federal approval. Pennsylvania’s Governor originally proposed making new adult coverage conditional on participation in a job search, training and employment program, but has now altered his 1115 waiver request to include a “voluntary, 1-year, incentive-based pilot.” Neither the new optional work program nor his proposal to eliminate some Medicaid benefits for the current Medicaid population has yet been approved by the federal government.
As noted, most states are maximizing the use of HMO-style managed care, as many states now have “mature” Medicaid Managed Care sectors with the capacity to serve more adults. Arkansas got permission to enroll all of its adult expansion group in Marketplace coverage, because managed care markets were not well established for either Medicaid or private commercial insurance. In contrast, in Texas and PA three out of four insurers who sell insurance in the new Marketplace also already have Medicaid-CHIP health plans. Some states are seeking a combination of Medicaid Managed Care and Marketplace coverage, e.g. using Medicaid Managed Care for people below poverty and Marketplace coverage for adults from 100-138% of the federal poverty line (FPL).
Newly-covered adults can be provided a commercial-style benefit package rather than the traditional Medicaid benefit package which includes long term care. Medicaid “alternative benefit plans” (i.e. commercial-style benchmark plans) and Marketplace plans both include the ten essential health benefits and are subject to mental health and substance abuse parity, so both provide a good standard of basic coverage.
States using the commercial-style benefits for newly-covered adults must also determine how to ensure access to federally qualified health centers, family planning providers, non-emergency medical transportation, and comprehensive care for youth ages 19 and 20. Approved variations include Iowa’s waiver to experiment for a year with whether and how non-emergency medical transportation is provided to the newly-covered adults.
Also, states must screen for “medically frail” persons in the newly-covered adult population, to make sure those with complex medical needs retain access to traditional Medicaid benefits.
Cost-sharing for the newly-covered adults is allowed, with the majority of states following federal law and rules that exempt children and pregnant women, and set upper limits based on income-to-poverty levels. Waivers experiment with new approaches outside of the basic federal rules, including modest premiums and $10 co-pays for non-emergency ER visits, mostly targeted to the new adults who are above the poverty line. Protections that mirror those in the Marketplace cap premiums at 2% of family income, and total combined costs at 5% of family income, consistent with federal standards. Both MI and PA are looking at reducing out-of-pocket costs for enrollees who get check-ups or meet other wellness goals.
Flexibility is available to state and federal Medicaid officials, but it is not unlimited. The part of the Social Security Act that allows 1115 waivers requires that exceptions to federal law under a waiver must “further the objectives” of the federal Medicaid law. Some of the requests that have been turned down to date include reducing benefits for the traditional Medicaid population (as opposed to the newly covered adults). Moreover, in order to capture the 100% federal matching funds available through 2016, states may not cap enrollment and must cover the full adult coverage expansion income range (up to 138% of the FPL), not just stopping at the poverty line.
How to Keep Up?
As noted above, the landscape is changing every day. One of the most reliable and timely sources of waiver and Medicaid Expansion news is the Georgetown University Center for Children & Families “Say AAh” blog. The Kaiser Family Foundation follows waiver developments and keeps an updated tally of state actions, and this report from the Center for Health Care Strategies summarizes key recent developments in AR, IA, and MI.
Keep following the CPPP and Texas Well and Healthy blogs, too, and for a deeper dive, you can get involved in closing the Texas Coverage Gap through the Cover Texas Now coalition’s Texas Left Me Out campaign.