Transcript potential gains for children - State Health Policy Conference

THE URBAN INSTITUTE
State Policy Choices to Help Health
Reform Achieve its Promise for LowIncome Children and Families
Stan Dorn
Senior Fellow, Urban Institute
[email protected]  202.261.5561
NASHP Conference: October 4, 2011
This presentation is based in large part on
prior work
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Stan Dorn, Ian Hill, Genevieve Kenney, and Fiona Adams, How Can California Policymakers Help LowIncome Children Benefit from National Health Reform? Prepared by the Urban Institute for The
California Endowment, July 2011,
http://www.calendow.org/uploadedFiles/Publications/Publications_Stories/TCE_Health_Reform_and_
Children_WP_v2_final_pws.pdf
Genevieve M. Kenney, Victoria Lynch, Jennifer Haley, Michael Huntress, Dean Resnick and Christine
Coyer, Gains for Children: Increased Participation in Medicaid and CHIP in 2009, prepared by the
Urban Institute for the Robert Wood Johnson Foundation, August 2011,
http://www.urban.org/UploadedPDF/412379-Gains-for-Children.pdf
Stan Dorn, The Basic Health Program Option under Federal Health Reform: Issues for Consumers and
States, prepared by the Urban Institute for the State Coverage Initiatives Program of AcademyHealth, a
National Program Office for the Robert Wood Johnson Foundation, March 2011,
http://www.urban.org/UploadedPDF/412322-Basic-Health-Program-Option.pdf
Stan Dorn, Matthew Buettgens, and Caitlin Carroll, Using the Basic Health Program to Make Coverage
More Affordable to Low-Income Households: A Promising Approach for Many States, prepared by the
Urban Institute for the Association for Community Affiliated Plans, September 2011
 Note: this report contains state-specific cost and coverage estimates for BHP
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Ongoing research for The 100% Campaign (Children’s Defense Fund-California, Children Now, and The
Children’s Partnership)
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Outline of Presentation
I. Potential gains for children and families
under the Patient Protection and Affordable
Care Act (ACA)
II. Obstacles to achieving those gains
III. State policy strategies to overcome those
obstacles
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I.
POTENTIAL GAINS FOR CHILDREN
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Potential gain #1: More eligible
children enroll in Medicaid and CHIP
Most eligible children are
enrolled today
But most remaining uninsured
children are eligible
Source: Kenney et al. 2011.
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Why might more eligible children enroll?
• More of their parents receive coverage
• Enrollment into Medicaid and CHIP is
streamlined
• The individual mandate
• The “welcome mat” effect
Publicity and outreach surrounding a new
program brings in many who qualified under the
old program
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Potential gain #2: Parents of lowincome children gain coverage
Percentage of children and parents
without coverage, by federal poverty
level (FPL): 2009
What happens to children when
their parents gain coverage?
• Children more likely to
enroll
• Children more likely to
obtain necessary care
• If parents are treated for
mental health problems,
children more likely to
thrive
Source: Urban Institute tabulations of 2010 CPS-ASEC.
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Why might low-income parents gain
coverage?
Eligibility for Medicaid and CHIP in the
median state: January 2011 (FPL)
Source: Heberlein et al. 2011.
Eligibility for subsidies under the
ACA (FPL)
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Potential gain #3: uninsured children who are
ineligible for Medicaid and CHIP gain coverage
• Some uninsured children become newly eligible for
subsidies—
Those whose incomes are too high for Medicaid and
CHIP but at or below 400 percent FPL
Certain lawfully resident immigrants
Their immigration status makes them ineligible for Medicaid
and CHIP because their states have not implemented CHIPRA
options for expanded coverage
Includes children who were legalized during the past 5 years
• Some uninsured children who are ineligible for
subsidies gain coverage because of—
The individual mandate
Insurance market reforms, in the case of special needs
children
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II.
OBSTACLES TO ACHIEVING THOSE
GAINS
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Obstacles to increased enrollment and
receipt of care
• Systems for eligibility determination, enrollment,
and retention often discourage participation
• Limited funding for application assistance
Federal exchange grants may not pay for Navigators,
so other strategies needed
• Public climate hostile to health reform
• Limited provider participation in Medicaid and
CHIP reduces access to care
So even if more children and parents enroll, some will
have difficulty obtaining essential services
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New challenges with subsidized coverage
in the exchange
• Premium charges will likely deter enrollment
by some low-income families
• Out-of-pocket cost-sharing may deter
utilization of some essential services
• The risk of owing money to IRS at the end of
the year if income turns out to exceed
projected levels could deter enrollment by
some low-income families who qualify for tax
credits
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Premiums and actuarial value of coverage for a
family of three, at various income levels
qualifying for subsidies under the ACA
FPL
150
175
200
225
250
Monthly
pre-tax
income
$2,316
$2,702
$3,088
$3,474
$3,860
Monthly
premium
Actuarial
Value (AV)
$93
$139
$195
$249
$311
94%
87%
87%
73%
73%
Note: assumes 2011 FPL levels.
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Examples of health plans at various
actuarial value levels
Income AV
150%
FPL
175%
FPL
Plan
example
Annual
Office Inpatient Prescr.
deductible visits hosp.
drugs
93% Average
None
HMO plan
offered by
employers
87% Federal
$250
Blue CrossBlue Shield
$20
$250 cocopays pay
$15
$10/$25/
$45
copays
$100 co- 25% of
payment, all costs
then 10%
Source: Congressional Research Service, 2009.
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Maximum repayment obligation for tax
credit recipients, by income
Single filer
<200 percent FPL $300
200-299 percent $750
FPL
300-399 percent $1,250
FPL
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Joint filer
$600
$1,500
$2,500
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Federal CHIP risks
• ACA
Requires maintenance of effort (MOE) through 2019
Continues CHIP funding through 2015
• If MOE is repealed, or CHIP allotments end, CHIP
children will probably be subject to the same exchange
subsidy rules that apply to their parents
• Implications
CHIP children will be ineligible for subsidies if they are
offered affordable employer-sponsored insurance (ESI)
 ESI is considered affordable based on the cost of worker-only
coverage. The cost of dependent coverage is irrelevant!
Children’s costs may rise and benefits fall, since exchange
subsidies are less generous than most CHIP programs
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III.
STATE POLICY STRATEGIES TO
OVERCOME THOSE OBSTACLES
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Streamlining enrollment
• Take advantage of—
Greatly enhanced federal funding to update eligibilityside information technology (IT) and link it to reliable
data about eligibility
90/10 Medicaid match and 100% exchange dollars available
through December 31, 2015
Free IT and other exchange products from Early
Innovator states and Enrollment UX 2014
• Whenever possible—
Permit consumers to begin applications by selfidentifying and consenting to disclosure of data
Use data matches rather than applicant documentation
to establish eligibility
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Streamlining enrollment, continued
• Simplify the initial application process by saving some questions for
later
 Ask about non-MAGI eligibility only after MAGI-based eligibility has
been determined
 Ask about eligibility for other public benefits only after the health
application is complete
• Have one entity determine eligibility for all health programs
• Do not put questions on the application form to distinguish newly
eligible adults from adults who could have qualified in 2009
 Use other methods to claim enhanced federal match for new eligibles
 Provide the same benefits to newly eligible adults and other adults
• Expedite enrollment through data matches with SNAP and
children’s Medicaid/CHIP records
• Note: as our understanding of recent regulations increases, more
key decision-points will become clear
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Application assistance and outreach
• The importance of application assistance. For example:
 In a low-income Latino community in Boston, CBO assistance
raised eligible children’s participation from 57% to 96% (Flores et
al. 2005)
• Strategies
 Recruit safety net providers to sign up patients
 Use exchange call centers to complete applications
 Combine Medicaid, CHIP, and exchange dollars into one system
of consumer assistance that helps low-income households apply
for insurance affordability programs and enroll into coverage
 Leverage participation of local businesses and philanthropies
 Consider special outreach targeted at Latinos and young adults
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Medicaid provider participation:
Strategies to consider
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Selective contracting to remedy targeted access problems
Help consumers locate participating providers
Tele-medicine
Increased use of non-physician and non-dentist providers
FQHC contracting with community-based dentists, using
cost-based reimbursement
• Streamlined claims payment
• Coordinated planning by local providers
• Ultimately, may need targeted reimbursement rate
increases in many states
 Federally funded increases for 2013 and 2014, while helpful, are
time-limited and exclude many important providers and services
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Two ways of using the Basic Health Program (BHP) option
to build on current programs and make coverage more
affordable for low-income parents
1. Create an integrated, rebranded program to
serve all low-income residents of the state
Adults up to 200% FPL and children up to incomeeligibility limits for CHIP receive Medicaid/CHIP-level
coverage
Sliding-scale cost-sharing possible, as income rises
above 133% FPL
In the “back room,” combine federal dollars under
BHP, Title XIX, and Title XXI
2. Expand a separate CHIP program to include
adults up to 200% FPL, continuing current
benefits and cost-sharing levels
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Subsidy eligibility under the ACA, without BHP:
Using the example of CA, where “Healthy Families”
provides CHIP coverage to 250% FPL
Children
>400% FPL
138-200% FPL
0-138% FPL
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Adults – lawfully
present immigrants
who are not
qualified
No subsidies
250-400% FPL
138-250% FPL
Adults – citizens
and qualified
immigrants
Exchange
Healthy Families
Medi-Cal
Exchange
Medi-Cal
Exchange
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Subsidy eligibility under BHP
approaches 1 and 2
Approach #1
Approach #2
Children
Adults
Children
Adults
>400% FPL
No subsidies
>400% FPL
No subsidies
250-400%
FPL
Exchange
250-400%
FPL
Exchange
200-250%
FPL
138-200%
FPL
0-138% FPL
Golden Bear Exchange
Care
Golden Bear Care
200-250%
FPL
138-200%
FPL
0-138% FPL
Healthy
Families
Exchange
Healthy Families
Medi-Cal
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Federal law #1: Who qualifies for BHP?
• Requirements
MAGI at or below 200 percent FPL
Ineligible for Medicaid that covers essential health
benefits, CHIP, Medicare
Citizen or lawfully present immigrant
No access to affordable, comprehensive ESI
• Major groups in 2014, under current law
Adults 133-200 percent FPL
Lawfully present immigrants 0-133 percent FPL, ineligible
for Medicaid and CHIP. E.g.:
 Green card holders during their first five years
 Citizens of the Marshall Islands, other COFA nations
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Federal law #2: What happens to
consumers in BHP?
• No subsidized coverage in the exchange
• State contracts with plans or providers
 All essential benefits must be covered
 Premiums may not exceed levels that would be charged in
the exchange
 Actuarial value may not fall below specified levels
 MLR may not fall below 85 percent
• Note: states can provide more generous coverage,
such as the coverage furnished by Medicaid and
CHIP
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Federal law #3:
BHP dollars
• The Federal government pays 95 percent of
what it would have spent for tax credits and
OOP cost-sharing subsidies if BHP members
had enrolled in the exchange
 Could be a little higher, depending on HHS
interpretation
• Federal dollars
 Go into state trust fund
 Must be spent on BHP enrollees
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Potential advantages to families of these
approaches to BHP
• Parents get much more affordable coverage, so
more likely to enroll and obtain needed care.
According to Urban Institute modeling of average
costs per adult:
Annual premium payments fall from $1,218 to $100
under this approach to BHP
Annual out-of-pocket spending falls from $434 to $96
Total annual savings: $1,456
• No risk of year-end tax debts to IRS, so enrollment
more likely
• Parents and children together in same plan
• Access to safety-net plans
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Other potential advantages
• State can save money by shifting Medicaid beneficiaries into federallyfunded BHP
 States could instead shift them to the exchange’s individual market, but that
would greatly raise beneficiaries’ costs without saving more money for states
 Eligibility groups vary by state. Examples may include:
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Adults covered through 1931 and 1115 waivers
Pregnant women
Lawfully resident immigrants now covered with state-only money
Women with breast and cervical cancer
Medically needy : special advantages of BHP, since it can be structured to slow “spenddown”
• Churning between Medicaid and the exchange, which raises
administrative costs and undermines continuity
 BHP approach #1 helps, because families up to 200% FPL remain in the unified
low-income program
 Moving the threshold from 133% FPL to 200% FPL reduces churning, because higher
income levels have fewer subsidy-eligible people and less income volatility
 BHP approach #2 doesn’t help, because it involves 3 subsidy programs for
adults, rather than 2
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Potential disadvantages to families of this
approach to BHP
• More limited access to providers, since provider
payments may be at or near Medicaid levels
Urban Institute modeling shows, to cover adults with
Medicaid-level benefits and typical CHIP cost-sharing,
average annual amounts of:
$4,600 in baseline BHP costs
$5,665 in federal BHP payments
o Allows provider payments > Medicaid
o But this depends on how the exchange is administered
Notwithstanding this increase
BHP adults would have more limited provider networks than in
the exchange
BHP implementation could place increased demand on
Medicaid networks
• Limited access to commercial plans
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Other potential disadvantages
• Smaller exchanges
Exchanges still large: cover 8.2 % rather than 9.8% of
residents < age 65, in average state
Some potential reduction in leverage and increase in
per capita administrative charges
• Potential for higher average risk in individual
market
• Inherent uncertainty of a new federal program
• Providers gain less from the ACA, because BHP:
Reduces the expansion in private coverage
Increases the expansion in public coverage
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One final BHP comment
• BHP can keep CHIP-level coverage for many CHIP
children if:
Federal lawmakers repeal ACA’s maintenance-of-effort
requirements; or
Federal CHIP allotments end after 2015
• In either case, BHP could cover non-Medicaid
children if they:
Have family incomes at or below 200 percent FPL; and
Are not offered ESI that the ACA considers to be
affordable
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Conclusion
• Low-income children and families can
experience significant gains under the ACA
• Important obstacles may limit those gains
• State policy choices can go a long way towards
overcoming those obstacles
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