Medicaid managed care and other health plans should prepare for anticipated churn of members who will likely fall into and out of eligibility of expanded Medicaid and subsidized coverage once health insurance exchanges launch in 2014.
Health reform expands the number of individuals who are eligible for Medicaid coverage or helps them afford other plans via tax credits or subsidies for with incomes between 133 percent and 400 percent of the federal poverty level.
“The paradigm is shifting to keeping people enrolled in coverage,” said John Kaelin, senior vice president for health reform at UnitedHealth Group. But extending coverage will also include some cost-sharing for enrollees who experience even modest income gains.
“We have to put strategies, policies and products in place to manage for people moving around to the degree that their income fluctuates,” Kaelin added at a recent conference sponsored by America’s Health Insurance Plans.
For example, he said that at the top end of Medicaid – around $14,000 in annual income – a member pays no premium nor shares any costs. However, earning just slightly more, at 140 percent of the poverty level or about $15,200, the individual is faced with having to pay $40 to $50 a month for health coverage, and depending on the plan, share some costs to use the health system despite subsidies.
“That could be big shock,” Kaelin said. Individuals may question whether they want to stay enrolled when it will cost so much relative to limited earnings.
Health plans might consider affordability and price points related to this population and develop user-friendly products to communicate and educate about premiums, deductibles and co-pays. Plans could provide simulators that enable customers to make informed decisions, he said.
As customers move between Medicaid and the exchange plans because of job losses or gains, members may want to keep the same physician instead of changing with each plan. Therefor, the provider network will be a critical component, and providers who overlap in Medicaid and exchange plans could enable seamless coverage, Kaelin said.
Michael Nardone, principal for Health Management Associates and former Pennsylvania Medicaid director said states will also need to take people moving between health plans into consideration in order to smooth the transition between Medicaid and other programs. To ensure continuity of coverage, states could provide an essential health benefit option and network requirements for exchange plans, as well as encourage or require existing Medicaid plans to participate in the exchange. However, CMS has not yet defined what the essential health benefit will look like.
Some state Medicaid policies, such as those focused on quality improvement, could transfer to insurance exchanges, especially if the state is looking to be an active purchaser or do selective contracting with specific health plans when they establish their exchanges, Nardone said.
Pennsylvania worked with some health plans to use pay for performance that crosses private plans and Medicaid. “I think there is some potential leverage there that states can build on,” Nardone said.
Exchanges, as envisioned, hold some potential technical solutions to these challenges, as they could serve to simplify the enrollment process while encouraging health plans, states and the Centers for Medicare & Medicaid Services to work together.
One example is the single point of entry or “no wrong door,” in which customers who enter the exchange portal are directed to the program for which they qualify, Kaelin said. Another is pre-populating forms to promote initial and ongoing enrollment, especially when Medicaid members “fall off because they don’t recertify or there is some paperwork snafu,” Nardone added.
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