Yesterday, I wrote about the status of the three states—Idaho, Nebraska, and Utah—implementing Medicaid expansion after a voter referendum in November 2018. The takeaway was that each state is pursuing alternative models that put more burden on consumers and provider organizations (see To Expand Or Not Expand – The Medicaid Question). Even more than five (!) years out from the original start date of Medicaid expansion, the implications of expanding, or not expanding, have effects on provider organization strategy.
First, although the choice to expand Medicaid coverage across states is largely a political one, I think its important to point out the research generally supports the benefits of Medicaid expansion. In states with Medicaid expansion, the percent of individuals uninsured for the whole year was 8.6% compared to 14.9% in states without expansion (see Proportion Of Non-Elderly Adults Without Insurance At 8.2% In Medicaid Expansion States & At 14.9% In Non-Expansion States). Medicaid expansion has also led to better access to care for low-income adults, been linked to a decline in ICU stays, and resulted in fewer addiction-related deaths (see Medicaid Expansion Results In Fewer Addiction-Related Deaths, PPACA Medicaid Expansion Linked To Decline In ICU Stays, and Low-Income Adults In Medicaid Expansion States Report Better Access To Health Care). The effects of Medicaid expansion have also spilled into other areas of the health human services. Recently, a link between a decrease in child neglect cases and Medicaid expansion was found (see Medicaid Expansion Linked To Decrease In Child Neglect).
Then there is the issue of how states expanded Medicaid. Currently there are 33 states and D.C. which have implemented Medicaid expansion. Of those states, 26 have implemented a traditional Medicaid expansion and seven have implemented expansion through 1115 demonstration waivers (see Status of Medicaid Expansion and Work Requirement Waivers). Those 1115 demonstration waivers allow states to put additional requirements on Medicaid expansion enrollees—such as work and community engagement requirements, premiums and cost-sharing, and alternate financing and delivery systems. (Note that some states have expanded using traditional means, but also implemented waivers with additional requirements).
The major difference in those alternative expansion plans is whether or not they include work requirements. Currently nine states have approved work requirements, although not all have been implemented, and another six have waivers pending approval with the Centers for Medicare & Medicaid Services (CMS). In Arkansas, the state with the longest running community engagement/work requirement, the uninsured rate rose with implementation and there was not evidence that the employment rate or percentage of private insurance increased (see Medicaid Work Requirements — Results From The First Year In Arkansas).
Another major issue, is the use premiums and cost-sharing requirements. States like Indiana utilize a form of coverage accounts, which enrollees contribute to each month. If individuals with income above 100% of the FPL do not make these payments, they will be locked-out of the program for six months. Other states such as Iowa require the payment of premiums, but non-payment results in a debt owed to the state and not a loss of coverage. These types of programs can be a barrier for low-income adults. A study of the effects of premiums on Medicaid enrollees in Indiana found that 29% of enrollees were locked-out of or nor enrolled in coverage as a result of non-payment (see The Effects of Medicaid Expansion under the ACA: Updated Findings from a Literature Review).
Additionally, there is the issue of waiver of retroactive Medicaid eligibility, which removes the requirement that beneficiaries receive 90 days of coverage prior to submitting their application. While this waiver has been around for years, its has gained popularity in the past couple of years (see Changing Medicaid Retroactive Eligibility & Charitable Care Policy). There are other administrative issues that effect access to health care as well, such as how often Medicaid eligibility is reviewed and the penalties for not submitting proper documentation in time (see Another 11,500 people removed from Louisiana Medicaid rolls, and CMS Re-Approves Kentucky HEALTH Medicaid Waiver To Impose Work Requirements Starting April 2019).
For provider organization executive teams, strategy in this landscape depends on where you operate and what services you deliver (and obviously will vary if the organization operates in multiple states). In states with traditional Medicaid expansion, the path is the most clear – standard benefits, largely managed by health plans, and a small proportion of the population uninsured and under-insured. In those states without Medicaid expansion, the percentage of the population uninsured is high (up to 17% and 14% in Texas and Oklahoma, respectively). Executive teams will need to develop concrete policies about charity care – what to provide, how much, and to whom.
In the 12 states with 1115 waivers with work requirements, premiums, and/or similar policies the business model is not as clear. Management teams will need to not only understand those unique variants in their state but develop a concrete plan for both how to assist consumers in understanding the criteria for eligibility, the benefits covered, and the payment required. It will require a new approach to eligibility determination and a new process for assessing what services will be covered and what services will be paid by the consumer (or eligible for charity care status). Taking the time to develop these new policies and processes will be critical for sustainability (and lack of management headaches) in these new coverage environments.
And for a complete state-by-state view of the landscape, be sure to check out our OPEN MINDS State Profile Series. The profiles contain coverage of the Medicaid landscape and the behavioral health landscape in each state including the use of managed care, new initiatives, and new care coordination programs. The State Profile Series is available to all OPEN MINDS Circle Elite members for free. Learn more about becoming an Elite member at https://www.openminds.com/elite/