New Kaiser Commission Resources on Health Care Reform

In January 2014 nearly all persons under age 65 who have incomes below 133% of the federal poverty level (FPL)—about $14,400 for an individual in 2010—will be eligible for Medicaid. By 2019, an estimated 16 million are expected to be added to the Medicaid rolls. What will their benefits look like and what steps should be taken to ensure effective implementation of this large program expansion? Three new publications from the Kaiser Family Foundation's Commission on Medicaid and the Uninsured are designed to help address these questions.

Benefits and Cost-Sharing for Adult Medicaid Beneficiaries describes rules that will govern coverage available to the newly eligible adults. Except for those in exempt groups (see below), the law requires states to provide newly eligible beneficiaries with "benchmark" benefits, not the traditional full Medicaid package. The benchmark concept, introduced in the Deficit Reduction Act of 2005, is relatively new to Medicaid, in which long-standing rules about comparability and "statewideness" prohibited states from reducing benefits for some beneficiaries. In 2005 Congress gave states the option to provide certain groups with an alternative package based on one of three commercial insurance products (benchmark or benchmark-equivalent coverage) or determined to be appropriate by the Secretary of Health and Human Services (HHS).

The 2010 reform law makes some changes to the standards for benchmark plans. A key requirement is coverage of "essential health benefits"—those that must be provided to people who sign up for health insurance exchanges or for coverage in the individual or small-group insurance market beginning in 2014. The HHS Secretary has not yet defined these benefits in detail; however, federal rules mandate inclusion of ambulatory services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse treatment services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including dental and vision care. In addition, certain groups are exempt from mandatory enrollment in benchmark plans—among them are persons who qualify for Medicaid because of disability and those who are dually eligible for Medicaid and Medicare. As noted in the Kaiser brief, a large portion of the newly eligible adults are expected to be exempt, because of the relatively high prevalence of serious health conditions among adults with very low incomes.

Although rules governing how much states can charge the new Medicaid beneficiaries for coverage and services are complex, in general the amounts are strictly limited. For adults with incomes below 100% FPL, states cannot charge more than a nominal amount for most services, nor can they impose premiums or charges for emergency or family planning services. States may charge somewhat higher cost-sharing amounts for those with incomes between 100% and 150% FPL, and up to 20% for those with incomes above 150% FPL. Adults cannot be charged premiums until their income reaches 150% FPL. In addition, states must ensure that the total cost for a family in a year does not exceed 5% of the family's income. The federal government will finance 100% of a state's expenditures for the new beneficiaries from 2014 through 2016, and in subsequent years the rate will decline to 90%—well above the regular Medicaid matching rates for states. The seven-page issue brief concludes with some considerations for state policy makers and planners. Beyond choosing which option to offer—full Medicaid benefits or a benchmark package—states must design a coherent program that provides timely services to people who move in and out of exempt groups and whose Medicaid eligibility status changes.

A second issue brief in the Kaiser Commission's Explaining Health Reform series, Eligibility and Enrollment Processes for Medicaid, CHIP, and Subsidies in the Exchanges, summarizes requirements for states to create a coordinated and consumer-friendly enrollment system that helps people understand their coverage options and that uses up-to-date technology to facilitate application and renewal. It must be a "no wrong door" system that ensures that applicants are screened and enrolled in the appropriate program and that supports seamless transitions between Medicaid, the state Children's Health Insurance Program (CHIP), and subsidized coverage in the exchanges.

The commission has also issued the first publication in a new series on reform called Optimizing Medicaid Enrollment: Spotlight on Technology. The series will examine how selected states are using technology to streamline enrollment and gear up for Medicaid expansion. The first publication focuses on Louisiana, which employs Express Lane Eligibility (ELE) to automatically enroll eligible children in Medicaid. ELE was authorized by the Children's Health Insurance Program Reauthorization Act of 2009. It allows state Medicaid and CHIP agencies to rely on eligibility findings from other public programs such as SNAP (Supplemental Nutrition Assistance Program, formerly Food Stamps) or Head Start, as well as on tax return data, to identify, enroll, and recertify children, bypassing the eligibility reassessments required by Medicaid and CHIP rules.

In Louisiana the Medicaid program relies on eligibility findings from SNAP, because children whose families meet SNAP's income standard (130% FPL) and other eligibility criteria are most likely to be eligible for Medicaid but uninsured. For parents who consent, Louisiana has created an electronic file-sharing and data-matching system. In February 2010, a month after ELE was launched, the state Medicaid program enrolled more than 10,000 children in one stroke, and 4,000 more were enrolled by June 2010.

Another new addition to Kaiser's health reform resources is an archived video Webcast of an August 2, 2010, briefing, "50 Ways to Implement Health Reform: State Challenges and Federal Assistance," which was cosponsored by the Alliance for Health Reform and the Robert Wood Johnson Foundation. The panel, moderated by Senator Jay Rockefeller and Ed Howard of the Alliance for Health Reform, focused on challenges such as working within state legislative cycles to meet tight deadlines in the reform law and creating new roles at the state level as budgets are being squeezed. The panel also discussed setting up high-risk pools and health exchanges and instituting changes to Medicaid eligibility. The Webcast and the series documents are available on Kaiser's health care reform portal at healthreform.kff.org .