The Medicaid and CHIP Payment and Access Commission is out with its biannual report, proposing a number of changes to eligibility, premiums and disclosure policies, including some intertwining with exchange health plans.
Total Medicaid spending grew 6 percent in the 2013 fiscal year, to $460 billion, while CHIP grew 8 percent to $13 billion. As half of the states expand eligibility under the Affordable Care Act and as the stream of seniors relying on Medicaid for nursing care continues, that spending is bound to grow
With the largest public benefits program since Medicare just getting started, though, MACPAC is focusing on tying up some loose coverage ends, with recommendations on continuity and benefits equity, especially for pregnant women and children.
Eligibility issues
The MACPAC, chaired by Kaiser Family Foundation EVP Diane Rowland, began its March 2014 report reiterating support for two recommendations from last year: provide states with an option for 12-month continuous eligibility for adults (as is currently available for children) and eliminate the sunset date for Medicaid transitional medical assistance, in light of the fact that states can opt not to expand eligibility.
Given the income volatility many lower-income residents see, "After losing Medicaid eligibility, many parents and childless adults will not be eligible for, or take up, exchange or other coverage," the Commission wrote.
Since 12-month continuous eligibility has been shown to reduce "churn" among children covered by CHIP, it could do the same for adults if Congress gave states the option, the Commission argued. While the impact would vary across the states, nationally, according to Congressional Budget Office estimates, adding 12-month continuous eligibility would increase federal Medicaid spending by between $50 million and $250 million annually.
Ending the planned phase-out of transitional medical assistance programs -- set for this April -- would also help alleviate the problem of churn, where people with fluctuating incomes fluctuate between program eligibility, at the risk of periods of uninsurance, the Commission argued.
"While some churning is inevitable," the Commission wrote, eliminating the sunset date for the TMA program would have the dual benefit of helping low-income residents in states not expanding Medicaid to avoid going uninsured while reducing administrative burdens for providers and health plans.
Continuing the program would also help save the federal government somewhere between $1 billion and $5 billion between 2015 and 2019, according to CBO projections cited by the Commission.
Aligning coverage
The Commission is also hoping to convince lawmakers to align pregnancy coverage within state Medicaid programs and between Medicaid and insurance exchanges.
"Congress should require that states provide the same benefits to pregnant women who are eligible for Medicaid on the basis of their pregnancy that are furnished to women whose Medicaid eligibility is based on their status as parents of dependent children," the Commission wrote.
Because states provide pregnancy services to all pregnant women at or below 138 percent of the federal poverty level but not necessarily full Medicaid benefits, services available to pregnant women "differ by eligibility pathway both across and within states, with some pregnant women receiving fewer Medicaid benefits than pregnant women covered through other Medicaid eligibility pathways," the Commission noted.
To fix that complicated system, the Commission basically wants to make all Medicaid benefits available to pregnant women if they aren't already, and also wants to prevent pregnant women from disenrolling from private exchange plans and enrolling in Medicaid solely because of their pregnancy.
In a companion to that recommendation, the Commission suggests that women enrolled in qualified health plans "should be allowed to retain their qualified health plan coverage even if their pregnancy makes them eligible for Medicaid" to "avoid discontinuities in networks and care."
Over five years, between 2015 and 2019, the proposal would increase federal spending by less than $1 billion, according to CBO estimates.
CHIP
In tweaks to CHIP, MACPAC wants to reduce what commissioners see as unnecessary complexity by eliminating waiting periods -- as 16 states have already done -- and also to stop charging premiums to families with incomes below 150 percent FPL.
In addition to reducing periods of uninsurance, ending waiting periods would "reduce administrative burden and complexity for families, states, health plans, and providers as children move from short-term exchange coverage to CHIP," MACPAC members argued. Like the Medicaid pregnancy proposal, it would probably cost less than $1 billion over five years, the CBO estimates.
For CHIP premium responsibilities, the Commission argues that families earning below 150 percent FPL (about $35,500 for a family of four) are price sensitive enough for $10 a month to be prohibitive, while for Medicaid programs, premiums of $10 a month are "so small that they would not represent a significant revenue loss to states if they were eliminated -- especially as this also removes states' burden in collecting and administering these premiums."
And with only eight of the 44 states charging CHIP premiums levying them on families earning below 150 percent FPL, it wouldn't have a huge impact on federal outlays, likely leading to federal costs of less than $1 billion over five years, MACPAC argued.
The DSH issue
Finally, the Commission is urging the Secretary of Health and Human Services to shed light on an opaque area of Medicaid spending -- non-disproportionate share payments, which represent more than 20 percent of total Medicaid fee-for-service hospital payments nationally and more than 50 percent in some states.
Non-DSH payments, generally derived from state policies, currently are not reported to the federal government on a provider-by-provider basis, making it hard to "determine total payment to individual providers or the effect of these payments on policy objectives such as efficiency, quality, and access to necessary services."
MACPAC members are calling on HHS to start collecting and publishing non-DSH payments, through new standardized templates, the existing Medicaid statistical information system or other means.
"Without additional data on both health care related taxes and supplemental payments, it is not possible to meaningfully analyze Medicaid payments at either the provider or state level," the Commission wrote.