Connecticut is first to take advantage of early expansion
Connecticut is first to take advantage of early expansion
The option to expand Medicaid coverage to childless adults immediately, instead of waiting until 2014, is one fiscal opportunity for states included in health care reform legislation. In April 2010, Connecticut became the first state to formally seek approval under the new federal law to cover more individuals under Medicaid.
"We were the first state to take advantage of the opportunity to expand Medicaid coverage to a new population of low-income adults. That alone will net the state $53 million through June 30, 2011," says Michael P. Starkowski, commissioner of Connecticut's Department of Social Services. "We think that is going to be a big plus, both for the state and for low-income adults previously covered under our state-funded general assistance program."
The state is transferring 47,000 single, low-income adults covered by State-Administered General Assistance (SAGA) into the larger Medicaid program. Currently, the cost for this coverage is borne entirely by the state, and the benefit level is inferior to Medicaid.
"While the clients will receive more health care benefits to meet what are often complex needs, the federal financial participation is really going to help the state budget," says Mr. Starkowski. "It is also an opportunity to move into new populations that have had difficulty getting affordable health insurance, because the new program is open to all adults with very low incomes, whether or not they have children."
The state already offered coverage to childless adults without health insurance through its Charter Oak Health Plan, opened as an option for adults with or without pre-existing conditions by Gov. M. Jodi Rell in 1998. The subsidization of premiums was discontinued due to budget constraints.
Previously, Charter Oak's enrollees paid premiums depending on their income, and those who hit 300% FPL paid the full, unsubsidized premium. As of this July, the legislature eliminated the subsidization of the program, so clients now pay $307 a month regardless of income. About 2,000 are now eligible for the new low-income adult program.
"That will be a plus for quite a few people in Connecticut, because if they move, they don't have the co-pays or deductibles," says Mr. Starkowski. "By moving, they don't have any premium at all, and they will move into the full Medicaid package."
Coverage is retroactive
While many states aren't able to take advantage of early expansion because of budget shortfalls, several factors made Connecticut a good candidate to capitalize on this.
First, Connecticut had already been providing a health care benefit with its SAGA program. This provided medical coverage to very low-income, single, childless adults who do not qualify for Medicaid because they are under age 65, do not have a permanent qualifying disability, are not pregnant, or do not have a child under age 19.
"These were very low-income individuals with an average monthly income of $600, who did not have the ability to purchase insurance," says Mr. Starkowski. "Many had some type of temporary disabilities or substance abuse issues, which kept them out of employment for six or nine months."
Before health care reform was passed, the legislature authorized the filing of a waiver with the Centers for Medicare & Medicaid Services (CMS) to try and gain federal reimbursement for this population. "The administration worked with the legislature and talked to CMS about waiting until health care reform passed," says Mr. Starkowski.
He says that the process of working with the federal government went very smoothly. "It was a very pleasant experience. [Health and Human Services Secretary Kathleen Sebelius] assigned individuals in her department who had the expertise to actually make decisions on eligibility, assets, program design, network adequacy, and the transition," says Mr. Starkowski.
After the state plan amendment was submitted to the federal government, a series of conference calls was held with the appropriate decision makers in each area. "They would tell us what outstanding issues still needed to be resolved," says Mr. Starkowski. "My staff and myself, as the decision makers for the department, would make decisions on the phone."
After moving through all of the issues that had to be resolved to get the expansion population covered, Connecticut was approved. The Medicaid coverage and federal revenue for the expansion population is retroactive to April 1, 2010.
"That enabled us to hit the ground running," says Mr. Starkowski. "It actually means about $53 million in net savings to the state of Connecticut between April 1, 2010, and June 30, 2011. And on a regular basis, it means enhanced revenue."
Mr. Starkowski says that "in a way, the timing was right," because Connecticut was able to be an 'early adopter' of national health care reform legislation.
"The federal government recognized that we had been doing the right thing, so to speak, for years by covering this population," says Mr. Starkowski. "Now, for the first time, we are getting partial federal reimbursement to complement that state expenditure, and the clients are getting a better health care benefits package through Medicaid."
In addition to the 47,000 individuals who have already been transitioned into the program, and 2,000 moved from the Charter Oak program, an estimated 5,000 people will come in over the next year.
"It will cost us some dollars. We understand that we will still get our standard FMAP of 50 cents on the dollar," says Mr. Starkowski. "But we believe it will provide some stability to the health care system and some certainty of payment for the providers who service this population. In the long run, it will provide enhanced health care and quality of life for the people who live in the state."
Premiums reduced
Individuals with pre-existing medical conditions who have not had health insurance for the past six months can now get coverage under the Connecticut Pre-Existing Condition Insurance Plan, opened by Gov. Rell on Aug. 1, 2010.
Connecticut will receive $50 million from the federal government over the next three and a half years to pay the expenses of the individuals who enroll in the high-risk pool.
"In June 2010, after we received the preliminary premium schedule for individuals in the high-risk pool, Governor Rell sent us all back to the drawing board to have our actuaries once again review the premiums," says Mr. Starkowski. "We worked with CMS to try to bring those down to much more affordable premiums."
Premiums were lowered by 35% over initial estimates. They now start at $285 monthly for those under 30, and rise gradually by age to a high of $893 for adults 65 and older. An average of 1,200 people a month are expected to be served by the program.
When an individual applies for the plan, he or she is first screened for Medicaid eligibility. "If they have a pre-existing condition and [are] eligible for Medicaid, that would be the least costly and most expansive service for the individual, because there wouldn't be any co-pays or premium shares or deductibles," says Mr. Starkowski.
In some cases, an applicant may not be aware of the federal requirement for an individual to verify they have been without any insurance in the previous six months. Therefore, if someone's COBRA coverage ended two months earlier, he or she would not be eligible for the Pre-Existing plan. In that case, even if the individual isn't eligible for Medicaid, he or she can still be offered the Charter Oak Health Plan.
"We are trying to put a package together where clients can come in, send in an application, and our contractor will come in and find the most appropriate plan for them, based on their medical needs and their income," says Mr. Starkowski.
Mr. Starkowski says that he does have some concerns about the fiscal impact of the expansion population. "I think it's going to be a positive thing for the clients. On the other hand, I think it will potentially increase the number of enrollees that we have on the Medicaid program, just from the screening process," he says.
Looking forward
"I think we have been a fairly progressive state with health care," says Mr. Starkowski. "We haven't been wed to staying in a mode of service from the past. We are always looking at what's out there what are the best practices that could make it a more cost-effective and more quality-driven process. We've had some significant expansions in our programs. Some other states have provided the minimum eligibility requirements, but Connecticut has never been that way."
The department provides services for some 550,000 people in the state, including Medicaid, single-purpose pharmacy programs, the Husky A, Husky B, and Charter Oak programs, and the fee-for-service Aged, Blind and Disabled population. "For a significant population, we are the backbone of their health care, or we are at least providing primary access for things like pharmaceutical benefits," says Mr. Starkowski.
However, with a projected deficit of about $3 billion in its 2012-2013 budget, the 2014 expansion population is going to be another strain on the fiscal problems the state is already facing.
"As much as we have moved into some of the expansion territory already with the Medicaid for Low-Income Adults program, it still only reimburses states at 50 cents on the dollar, because that is our FMAP," says Mr. Starkowski. "So, it is still a challenge for us, because we are going to have to come up with the dollar in order to get the 50 cents."
Contact Mr. Starkowski at (860) 424-5054 or [email protected].
The option to expand Medicaid coverage to childless adults immediately, instead of waiting until 2014, is one fiscal opportunity for states included in health care reform legislation. In April 2010, Connecticut became the first state to formally seek approval under the new federal law to cover more individuals under Medicaid.Subscribe Now for Access
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