Maximizing coverage and access to care under PPACA

Maximizing coverage and access to care under PPACA State Coverage Initiatives Program August 4, 2010 Stan Dorn The Urban Institute Sdorn@urban.org 202.261.5561

Overview Maximizing enrollment and retention of eligible individuals Improving affordability and continuity of coverage and care above Medicaid income levels Increasing Medicaid beneficiaries’ access to care

But first: a quick review Medicaid to 138% FPL MAGI Rules for newly eligible adults Definition: would not have qualified under state rules as of 12/1/09 Highly enhanced FMAP “Benchmark benefits” Standard FMAP for other adults Subsidies in the exchange up to 400% FPL OOP cost-sharing subsidies to 250% FPL – higher AV Integrated eligibility system for Medicaid and exchange Individual mandate raises the stakes on enrollment Caveat: much hinges on how CMS interprets the law

Part I Maximizing enrollment and retention of eligible individuals

The need for public education and application assistance The Massachusetts story Major public education effort Application assistance “Virtual gateway” CBO contracts Provider incentives > ½ of all successful applications came from CBOs and providers Other states have facilitated enrollment – CA, NY, WI, etc. Behavioral economics

Public education and application assistance under PPACA Responsibility of exchange Patient navigators Call centers Federal funding through 12/31/14 Partner with local philanthropy Hospital-based presumptive eligibility Follow MA precedent in terms of safety net providers? Must be done carefully, to avoid deterring access to care

Limit application forms to questions relevant to eligibility Need to distinguish the newly eligible from others Claim enhanced FMAP Provide benchmark benefits Requires information irrelevant to eligibility Parents Assets Deprivation Childless adults and empty nesters Disability Pregnancy Solutions To claim FMAP, use sampling Provide standard Medicaid benefits as “Secretary-approved” benchmark coverage, Social Security Act Section 1937(b)(1)(D)

Asking for help without completing a traditional form Eligibility is determined based on data when an individual applies “by requesting a determination of eligibility and authorizing disclosure of … information [described in Social Security Act Sections 1137, 453(i), and 1942(a)] … to applicable State health coverage subsidy programs for purposes of determining and establishing eligibility.” PPACA Section 1413(c)(2)(B)(ii)(II) Precedents EITC amount CA income tax Medicare Parts B and D – automatic, without request

Requirements Consumer must Request for disclosure Provide SSNs needed for data-matching State and exchange must gather data 1137 – IEVS, SAVE 453(i) – National Directory of New Hires 1902(a) – public benefit programs, new hires data, state tax records, Medicaid TPL data showing private coverage, vital statistics records in any state

Basing eligibility on receipt of other benefits Express Lane Eligibility remains an option for children New SSA Section 902(e)(13)(D)(i)(I) says that MAGI does not apply to people “who are eligible for medical assistance … as a result of eligibility for, or receipt of, other Federal or State aid or assistance” [in addition to SSI] Implies that states can base Medicaid income-eligibility on receipt of other benefits Logical if other program’s eligibility is far below 138% FPL

Basing eligibility on income data Subsidies in exchange Based on prior-year tax data Chance to supplement at application Year-end reconciliation Medicaid Initial determination based on income at time application is processed Post-application changes? Not clear, under PPACA What happens if application submitted to exchange?

Suppose states cannot base Medicaid eligibility on data Pay stubs required or self-attestation Consequences for consumer Two-tier system obstructing participation Successful programs have used data-driven eligibility Massachusetts enrollment Louisiana renewal Medicare subsidies for Parts B and D Consequences for states Administrative costs higher Caseload costs lower Higher likelihood of PERM liability

Possible approach If prior-year tax data show Medicaid eligibility, consumer automatically receives Medicaid If after a certain point in the calendar year, could supplement with more recent data (new hires, quarterly earnings) If prior-year tax data show ineligible for Medicaid, receive an opportunity to apply for Medicaid using traditional procedures, including pay stubs, etc. In the meantime, subsidies in the exchange Precedent: ELE Legal support “Less restrictive methodology” PPACA requires Medicaid, CHIP, and the exchange “to the maximum extent practicable, to determine … eligibility on the basis of reliable, third party data.” Section 1413(c)(3)(A)(ii)

Integrated eligibility determination Basic model Exchange, Medicaid, and CHIP compile a data warehouse for each applicant States need better eligibility IT Will CMS develop modules? Will CMS makes grants to states under PPACA Section 1561? Revisit the denial of MMIS FMAP to eligibility systems? Can administrative funding for the exchange help with Medicaid? Exchange can contract with Medicaid to determine eligibility for subsidies in exchange Massachusetts model Must meet HHS “requirements ensuring reduced administrative costs, eligibility errors, and disruptions in coverage.” 1413(d)(2)(A) Single, statewide office, as in Massachusetts?

Part II Improving affordability and continuity of coverage above Medicaid eligibility levels

Concerns about affordability in the exchange Subsidy levels lower than any state program covering this income level Example: single adult at 160% FPL $1,444 in monthly pre-tax income in 2009 PPACA requires $64 in monthly premiums Coverage could include $25-30 office visit copays Prescription drug copays between $10 and $40 Contrast: most CHIP programs impose no charges or nominal charges at this income level

Basic health program (BHP) Covered individuals Income at or below 200% FPL Ineligible for Medicaid or CHIP because of Income; or Legalization of immigration status during the past 5 years. State Contracts with health plans to provide coverage at least as generous as in the exchange Receives 95% of what the federal government would have spent in subsidies State could use BHP to provide Medicaid look-alike coverage Federal dollars roughly 50% higher than Medicaid average for adults Could use excess to raise reimbursement, improve access Makes it easier to end optional Medicaid coverage above 138% FPL

Another approach State can supplement subsidies in the exchange Can apply above BHP income levels or instead of BHP Could limit to high-value plans implementing delivery system reforms Trade-off: state general fund cost Can limit subsidies to the lowest-income households, not all the way to 400% FPL

Continuity Income changes could shift people between Medicaid and the exchange Involuntary changes of plan and provider State policy options Include Medicaid MCOs in the exchange When income changes, so do premiums and OOP costs, but not the health plan or provider Massachusetts model

Part III Increasing access to care for Medicaid beneficiaries

PPACA Raises reimbursement to Medicare levels, but… Only for evaluation and management services Only for primary care providers Not for mental health, dentistry, specialists 100% FMAP ends after 2013 and 2014 Provides other infrastructure funding $11 billion for community health centers MACPAC

Alternatives to raising rates Streamline Medicaid claims processing Increase permitted scope of practice for non-physicians Especially for Medicaid, potentially for other payors to address workforce shortages Rural tele-health Incentives to take Medicaid patients Link to other coverage

Conclusion No matter what, PPACA is likely to dramatically increase coverage and access to care The amount of that increase will depend, in significant part, on state policy decisions

Maximizing coverage and access to care under PPACA