By Kim Bellard, March 14, 2013
Let’s be honest: since its inception, Medicaid has been the unwanted stepchild of the health care system. It serves a diverse set of populations that other public and private programs have historically ignored, its health outcomes are no better and possibly worse than not having insurance at all, its payments to providers generally rank lowest of all payors, and its coverage varies widely between states and all-too-often is skimpy despite its broad coverage requirements. And yet ACA wants to pour more people into this creaky vessel, sweetened by the inducement of increased subsidies to the states for the first few years.
Some states are thinking there has to be a better way.
Supporters of ACA are crowing about the fact some prominent Republican governors, such as Arizona Gov. Jan Brewer or New Jersey Gov. Chris Christie, have come out in support of expanding their Medicaid programs as allowed by ACA (with a nudge from the Supreme Court). They should be looking harder at states like Arkansas and Ohio.
Arkansas asked CMS if they could use the expansion dollars to fund buying private insurance, in the exchanges, for its Medicaid population. No just the newly eligible population, mind you – the entire eligible population. Much to some experts’ surprise, CMS approved this approach, citing premium support flexibility allowed by ACA and previous laws. This approach still has to be approved by the Arkansas legislature, which so far has been receptive.
Other states are not far behind. Ohio, whose Republican Gov. John Kasich drew national headlines by supporting the expansion, is proposing a hybrid model that would put only the newly eligible population into private insurance via the exchanges, so that anyone over 100% of the federal poverty level can get coverage there.
Wisconsin has an even more unusual twist. Its Medicaid coverage already covers many residents over 100% of the poverty level, but is frozen to new adult enrollees due to budget issues. Gov. Rick Walker wants a trade-off: Wisconsin would cover everyone under 100% of poverty in its Medicaid program, while anyone above that – including those now eligible for Medicaid – would get coverage (and subsidies) through the exchanges. Connecticut is considering a similar move.
States like Florida are watching closely. Its Governor, Rick Scott, shocked supporters by reversing his position and coming out in favor of the expansion. The Florida legislature was not too thrilled about this seeming support for Obamacare, but finds the Arkansas approach intriguing. Florida had already moved to putting its Medicaid enrollees in managed Medicaid plans, so the Arkansas approach is a closer fit philosophically.
In theory, CMS can approve such approaches if the cost and the coverage are comparable, but early indications are that they are taking a liberal (or would that be conservative?) interpretation of those requirements. The Kaiser Family Foundation just released a brief outlining the various requirements and options for the premium assistance model, in case anyone is that deeply interested. Some pundits think that if the Arkansas approach is implemented, that approach will spread quickly.
Two things I liked about ACA – and they may be the only two things – were that it ensured anyone could get coverage and that all of the lowest income people had subsidized coverage. The way it did so, though, made an already complicated situation worse.
Consider a person scraping by just under the poverty level. They now manage to get Medicaid coverage, with its limited cadre of participating providers and specific set of benefits. That coverage is increasingly likely to be delivered through a private managed Medicaid plan. Then they get a raise and start making enough money to get above 138% of FPL – so they are off Medicaid, and have to switch to another insurer through the exchange, with some public subsidies to help defray the cost. They probably will lose some benefits, such dental or vision, but also probably would have a much broader set of providers from whom they can get care. Then maybe they get a new job, whose employer offers health benefits. They lose their exchange coverage, as well as the subsidies, and there’s no guarantee that the employer coverage will either be as good as the exchange coverage or that the employer subsidies will be anywhere close to the exchange’s subsidies (especially for dependent coverage). If they lose that job, well, it may be back to the Medicaid coverage.
Honestly, Rube Goldberg would have enjoyed this set-up.
A recent analysis by HealthPocket suggests that less than 2% of health plans meet the recently released essential benefit standards. I suspect that many of those plans may have been individual policies rather than plans offered by large employers, but ACA requirements like pediatric dental and vision are virtually never offered by even the best health plans (although may be available via accompanying dental or vision coverage). It is not clear to me why someone who earns 137% of poverty should get dental and vision for all family members, while someone who earns 139% and lacks employer coverage gets only the pediatric coverage for children, and someone with employer coverage may lack those benefits entirely. Is this coverage important or not?
I’m not advocating that all plans should include full dental and vision, but, come on, this jumping back and forth between sources of coverage/type of benefits/amount of premium subsidy is crazy.
We have to remember that Medicaid really serves three distinct populations (as illustrated by this nice Kaiser Family Foundation graphic): the poor (some of them, anyway), the elderly needing custodial care, and individuals with severe disabilities. Most of the spending goes to the latter two populations. Maybe we should be thinking of splitting out the ongoing care support aspects of the program from the more traditional health insurance components of the program. That would allow for a much more seamless source of coverage and care.
When I read that the supposedly simplified, one-step application process may require a 21 page application, it feels like the canary dying in the coal mine: I fear the whole thing is going to crumble under its complexity. I don’t know if the Arkansas approach of putting everyone in the exchange will end up being implemented, or if it would prove to be actuarially equivalent, but it makes a lot more sense to me than the patchwork quilt of coverage ACA sets in motion.