California could opt to offer Medicaid “bridge plans” on exchange rather than expand Medicaid eligibility
Despite the assumption that California would opt to expand Medicaid eligibility to households with incomes between 100 and 133 percent of federal poverty guidelines as permitted under the Patient Protection and Affordable Care Act, the policy question remains open in the Golden State. A number of sticking points remain as detailed in this story in today’s Los Angeles Times. Chief among them is Gov. Jerry Brown’s expectation that since counties would benefit from the expansion through a reduced burden of caring for indigents not currently eligible for Medi-Cal as it’s called in California, they should help Sacramento shoulder the state’s future federal Medicaid cost share.
According to The Times, the Brown administration is also concerned that allowing people to enroll in Medi-Cal online could encourage fraud. California is rushing to ready an online enrollment system, the California Eligibility, Enrollment and Retention System (CALHEERS), to implement the Affordable Care Act’s mandate that individuals and families be offered enrollment for both government insurance programs like Medi-Cal and private coverage offered through its health benefit exchange thorough a single, streamlined application process. The unresolved policy question of whether to expand Medi-Cal eligibility poses significant potential to complicate an already complex process to prepare the online system and to provide enrollees what state officials expect to be a customer-friendly “no wrong door” experience. Problems integrating the state’s legacy Medi-Cal eligibility computer software with CALHEERs have already delayed plans to have it functional by the October 1 pre-enrollment date for 2014 coverage until January 1, 2014.
While the Brown administration’s concerns over expanding eligibility for Medi-Cal have stalled legislation that would do so, the administration is sponsoring pending legislation, SBX1-3, that would authorize commercial Medicaid managed care “bridge plans” per federal guidance issued in December, 2012 for those earning up to 200 percent of federal poverty. The plans would be available through the state’s exchange marketplace, Covered California.
Since the Affordable Care Act deems households with incomes of at least 100 percent of federal poverty eligible to buy coverage through the exchange marketplace, the bridge plan option provides policymakers an alternative to expanding Medi-Cal eligibility to 133 percent of federal poverty. Some states that have declined to expand Medicaid eligibility including Tennessee, Arkansas and Oklahoma are negotiating with the federal Center for Medicare and Medicaid Services to obtain waivers to allow their Medicaid eligibles to purchase commercial coverage on their exchanges. Absent a near term political agreement to expand Medi-Cal eligibility, California could soon be among them.
If the trend continues, it could lead to a bifurcated Medicaid system: basic, legacy Medicaid for those households with incomes below 100 percent of federal poverty guidelines and a “super Medicaid” system of federally subsidized coverage for households with incomes above the poverty line that wouldn’t otherwise qualify for Medicaid. It would also have fiscal implications for the states electing to “expand” Medicaid eligibility via Medicaid bridge plans sold on their health benefit exchange marketplaces since it would reduce their future federal Medicaid cost share burden, shifting subsidization fully to the federal government in the form of advance income tax credits.
Medicaid beneficiaries appear increasingly likely to participate in health benefit exchanges in at least some states in 2014. Two Medicaid-eligible populations may end up getting commercial health insurance via the exchanges: those whose incomes fluctuate above and below Medicaid eligibility levels and those residing in states that have opted not to expand the Medicaid eligibility cutoff to 133 percent of federal poverty guidelines. Both scenarios require waivers from the Center of Medicare and Medicaid Services (CMS).
The first group would be offered exchange products called Medicaid bridge plans authorized under guidance issued by CMS on December 10, 2012. This is the so-called “Tennessee Plan” since that state originated the concept and is designed to ensure continuity of medical care of Medicaid beneficiaries so they don’t have to change plans and providers as their incomes rise and fall.
The second population would participate in the exchange marketplace under the so-called “Arkansas Plan” in states that have not chosen to expand Medicaid eligibility to those earning up to 133 percent of federal poverty as authorized by the Patient Protection and Affordable Care Act.
In California, legislation that would expand that state’s Medicaid eligibility has failed to advance for nearly two months amid state fiscal concerns over the long term cost share impact and to what extent counties should participate in the cost share. Legislation authorizing Medicaid bridge plan products for those earning up to 200 percent of federal poverty, SBX1-3, has passed the Senate and awaits action in the state Assembly.