At a glance
Beginning in January 2014, Medicaid will increase its national eligibility limits for adults to 133 percent of the Federal Poverty Level (currently $15,290 for a single adult in 2013). This will open Medicaid coverage to childless adults, many of them uninsured – a category of the population not currently served by Medicaid. Nationwide the Robert Wood Johnson Foundation estimates that approximately 15.1 million uninsured adults could gain coverage under the ACA Medicaid expansion. These individuals are very diverse in terms of their age, family status and race/ethnicity.
What you need to know
Up to 500,000 people in Oregon and Washington may become newly eligible for Medicaid coverage through health care reform. Under the ACA, states can expand Medicaid coverage to all citizens (and legal residents in the US for 5 years) under 133% of the Federal Poverty Level (FPL) m starting in 2014. Each state has the option of implementing this expansion. Current proposals in both Oregon and Washington contemplate the expansion, but are still pending legislative approval. The ACA expands the number of Americans who are eligible for Medicaid as the program transitions from one based on aid categories to one based solely on financial eligibility. Federal funds will cover 100 percent of the cost of care for these newly eligible individuals from 2014 through 2016. The federal matching rate will then decrease over the next four years to 90 percent in 2020.
Tools to determine Medicaid eligibility
The Modified Adjusted Gross Income (MAGI) tool will now mirror federal income tax filing rules for determining Medicaid eligibility.1 Past practice of using multiple income disregards to adjust family income will be replaced by one 5% disregard for all programs.Streamlined federal rules do not limit assets or resources for this population.
The State Exchanges and Medicaid
Both the Oregon and Washington Exchanges in collaboration with the respective health authorities in each state plan to develop a simplified and seamless application for coverage that can be processed through the Exchange web portal in each state. The portals will automatically screen data and make eligibility determinations for Medicaid or CHIP eligibility. If the applicant is not eligible for Medicaid, the portals will also determine what level of financial assistance (if any) the applicant qualifies for to purchase a health plan through the Exchange.
Implications of Medicaid “Churn”
“Medicaid churn” is a term used to describe what happens when people’s income changes mid-year or more frequently and they become eligible for different types of health plans — for instance, going from Medicaid to a subsidized, Exchange-based plan. The Robert Wood Johnson Foundation reports that 29.4 million people ages 65 and under will experience churn under the health care law2. Another way to look at the issue is this – about a third of the people who will qualify for federal financial assistance or Medicaid in 2014 will experience churn at some point during the year.
Churn is largely an issue that impacts low-income populations, especially those who may only have part-time or seasonal work that pushes individuals and families above or below the new 133 percent FPL cut off for Medicaid. Job loss, reduction in work hours, marital status change or disability are all factors that could change a person’s income and precipitate changes in eligibility. Churn creates confusion and potential gaps in coverage and care as people move from one program’s set of rules and health care providers to another.
Changes in health status or family dynamics can also affect insurance eligibility status. For example in Washington State a woman with an income at 200 percent of the federal poverty level would qualify for an exchange-based plan. However if she became pregnant, she would immediately be classified as living in a 2-person household. This would put her below 185 percent FPL; qualifying her for Medicaid under the state’s current coverage rules for pregnant women. Two months after she gives birth, unless her income changed, she’d have to leave Medicaid and return to the commercial market either through the Exchange or directly with a carrier. In this example, she’d experience as many as two transitions within one calendar year.
The Oregon Health Authority and Cover Oregon are exploring options to address churn between Medicaid and commercial plans. House Bill 2132, passed this legislative session, requires that Cover Oregon report quarterly on efforts made in collaboration with the Oregon Health Authority to coordinate eligibility and enrollment for people who move between Medicaid and commercial coverage. As both a Medicaid and a commercial provider, Kaiser Permanente is also developing strategies to ensure continuity of care as members migrate between commercial and Medicaid coverage. Examples of these strategies include proactive outreach to those members who know they will be changing coverage to assist and educate, onboarding processes that will recognize changes for members and provide information about changes to benefits and care coordination to support members during these changes.