Medicaid, SCHIP expansion cover uninsured

States and communities wanting to quickly expand health care coverage to the uninsured can profit from experiences in Massachusetts and California, according to a study conducted for the Association for Community Affiliated Plans (ACAP) that found that expansion of Medicaid and SCHIP through Medicaid health plans is an effective way to cover the uninsured. The study found that states are better served to cover low-income uninsured individuals by building on a platform of Medicaid managed care plans already operating in their states rather than subsidizing purchase of commercial health insurance through tax credits or other incentives for low-income people.

"States looking to cover low-income uninsured people don't have to look too far," says ACAP executive director Margaret Murray. "The Medicaid plans are right in their backyard and ready to work with the states on expansion programs."

The report focuses on Massachusetts and California, two states that are breaking new ground in expanding coverage to uninsured residents. It provides case studies demonstrating how Massachusetts and several California counties capitalized on existing Medicaid health plans as "turnkey" solutions to quickly, efficiently, and economically provide coverage to low- and moderate-income people.

The Lewin Group report says there are many reasons to select Medicaid health plans for the roles they are playing or are proposed to play in reform efforts, including experience in serving low-income higher-need clients; experience working with state government purchasers; administrative experience, including efforts to improve quality and access and to control costs; and existing provider networks that include safety net providers and other providers that have demonstrated an ability and willingness to serve low-income populations.

Even with these positive points, there are challenges faced by the plans, including limited or no experience in marketing to groups of potential new enrollees, collecting premiums, advertising, enrollee cost-sharing, and operating multiple benefit plans.

Coverage program use not simple

The study says creating a coverage program is not as simple as "build it and they will come," because people who are not used to having a regular source of coverage may not come forward. The researchers say a successful program helps individuals enroll, access care, and navigate the system.

Several California counties have developed county-level children's health initiatives known as Healthy Kids. They generally are funded by a combination of local funds, tobacco tax, foundations, grants, and plan reinvestment. The programs expand coverage for low-income children not covered by Medi-Cal or Healthy Families (California's SCHIP program). In each county, a Medicaid health plan is the sole provider.

For the Massachusetts Commonwealth Care program, eligible people must be at or below 300% of the federal poverty level, uninsured, age 19 or older, and not eligible for Medicaid or SCHIP.

The five programs covered in the report identified three specific operational areas in which purchasers can design programs that effectively leverage the experience and resources of existing Medicaid health plans—provider networks, health care operations, and outreach and enrollment. The plans also described the unique benefit of a purchaser's decision to use Medicaid and SCHIP health plans to provide coverage in a health care expansion program—the ability to provide continuity of care for persons moving among public programs due to income fluctuations, and to cover children in a family that may qualify for different programs due to age or citizenship status. The Medicaid health plans interviewed also noted their deep commitment to serve the uninsured and low-income populations, evidenced by an intensive resource commitment to public programs, close links with public purchasers and partners, and not-for-profit status.

Many challenges

The report says a longstanding challenge for both low-income persons and the programs serving them is that income-based enrollment criteria, coupled with fluctuating income, lead to unstable enrollment. Thus, persons may gain and lose eligibility for various programs as their financial situation changes, which can have negative affects on health status. Children can also move between programs as they age, and different members of the same family may qualify for different programs due to age or citizenship status, which also can cause confusion for families.

But expansion programs served by the plans that participate in other programs for low-income people such as Medicaid and SCHIP offer enrollees a chance for stability in coverage and the potential for better continuity of care over time. The study says Medicaid health plans that participate in Medicaid and SCHIP are in a unique position to provide stability across programs by offering access to the same providers and care management services. Medicaid health plans also are able to track members' needs and care across programs despite members' movement between the public health insurance programs.

To the extent that existing policies and infrastructure are not appropriate and new policies or protocols must be developed, both the purchaser and health plans can use their existing relationships to accomplish necessary development steps. Lewin says this is particularly helpful as any new program, and especially one under pressure to get started quickly, will be forced to make quick decisions that may then need to be revised or reversed and participating plans must deal with a certain amount of uncertainty and change.

Programs to cover the uninsured may have characteristics that are different from current Medicaid and SCHIP programs. Thus, Medicaid health plans may not be able to leverage their existing infrastructure or may need to make significant modifications. Lewin analysts say central is the need to modify management information systems to address unique aspects of the expansion initiatives. While commercial plans or plans that operate in multiple states may be familiar with developing customized systems applications for different programs or product lines, this may be unfamiliar territory for some Medicaid health plans that serve only one or two local programs. Policy-makers designing an expansion program that looks similar to Medicaid or SCHIP may view Medicaid or safety net health plans as strong candidates for participation in the program. But to the extent that other design characteristics are a policy priority, such as premiums and cost-sharing or a benefit structure similar to state employees or other commercial groups, commercial plans may have an advantage.

Plan successes

Ms. Murray says the plans were able to: 1) help states implement an expansion quickly; 2) leverage existing safety net provider relationships; 3) build on established operations to serve the health needs of low-income people; 4) use their experience in outreach and enrollment strategies; and 5) support continuity of care for people in different programs.

Ms. Murray told a news conference announcing the study results that Healthy Kids and Commonwealth Care were designed to leverage existing infrastructure to provide a quick start-up. From the purchaser perspective, the Lewin study says, existing infrastructure such as the enrollment broker, reporting, and monitoring, could be adapted to a new program.

Because low-income or uninsured persons already may rely on traditional safety net providers, health plans that contract with or are owned by networks of safety net providers can quickly convert an existing network or develop a new network to serve the expansion group.

A third advantage is that Medicaid health plans have member services, care management, and outreach staff experienced in assisting low-income person who may face a variety of barriers to care. Also, safety net or community-based health plans may be able to co-locate outreach and member services at provider and community locations.

It is known that low-income or uninsured people can be difficult to identify and enroll in programs and it helps that Medicaid health plans have experience identifying and informing potential members and also have linkages with local organizations. Thus, the report says, the plans can assist purchaser marketing and outreach efforts and can promote availability of coverage for members of a family who are eligible for different programs.

Finally, Medicaid health plans support continuity of care for persons in different programs. Medicaid health plans participating in multiple programs can track members as they move between programs, promoting continuity of care, and can simplify coverage for different family members and create a single source of information and care.

Medicaid health plans participating in the Massachusetts and California health coverage expansion programs made several recommendations for Medicaid and safety net health plans that want to participate in similar expansion programs, and for policy-makers considering coverage program options. The recommendations include:

1. influencing the planning process;

2. collaborating with state and county legislators, regulators, and community organizations;

3. incorporating extensive evaluation into the program design;

4. securing organizational commitment and build on existing efficiencies.

Download the study and related materials at Contact Ms. Murray at (202) 331-4601.