Amenable to Premium Assistance, but not Partial Medicaid Expansion: How Flexible Will CMS Be?
April 19, 2013 11:53 AM
The Centers for Medicare and Medicaid Services (CMS) has issued two major Q & As regarding Medicaid expansion. In December 2012, CMS stated that it would not entertain a partial expansion less than 133% of the federal poverty level. This month, it stated that it would consider premium assistance models as an alternate to Medicaid expansion.
For the CMS guidance rejecting partial expansion, see page 12, here. For a previous NAHC report article reporting on CMS’ recent guidance on premium assistance, click here. Given these two Q & As, CMS seems poised to accept qualifying premium assistance models, but will oppose any partial Medicaid expansion legislation emanating from the states.
Premium Assistance Models Progressing in States
The premium assistance alternative to Medicaid expansion scored a recent victory. On April 16 and 17, Arkansas passed a bill through both the Arkansas House and Senate supporting such an alternative. Currently, the National Association for Home Care and Hospice has found thirteen (13) states that are in some way interested in the premium assistance model. Seven of those states - Arkansas, Florida, Montana, Ohio, Pennsylvania, Tennessee, and Texas - are either negotiating with the federal government or proposing bills on premium assistance, while the other six states - Kansas, Louisiana, Maine, Missouri, Nebraska, and Oklahoma - are otherwise considering the model.
As of April 17, Tennessee Gov. Bill Haslam (R) is still in negotiations with the federal government for a premium assistance option. As stated in an address to the Tennessee legislature on March 27, his plan would: 1) expand coverage through private health insurance to those currently uninsured earning up to 138 percent of the federal poverty level; 2) require co-payments for those who could afford to pay them; 3) include an end date of the expansion, only to be extended with the legislature’s approval; and 4) include a value-based compensation element. Mr. Haslam stated that in negotiations with the federal government, differences remain to be worked out regarding copayments and wrap-around services.
On April 8, officials working for Pennsylvania Governor Tom Corbett (R) confirmed that Pennsylvania was in negotiations with the federal government for alternatives to Medicaid expansion, and that using premium assistance to expand coverage to 133% of the federal poverty level was one such option discussed.
On April 17, a Florida Senate committee passed Republican Senator Joe
Negron’s plan (the Negron Plan) that would provide premium assistance for uninsured Floridians earning up to 138% of the federal poverty level.
On April 16, Texas Representative John Zerwas (R) introduced a bill in the Texas House proposing a “Texas Solution” echoed by Senator Tommy Williams (R) to expand coverage using premium assistance. The plan proposes to obtain premium assistance via three possible scenarios. In order of preference, they are: 1) a block grant; 2) a waiver program; and 3) premium taxes collected on policies sold through the health insurance exchange.
On April 17, the Montana Senate voted to adopt a premium insurance model, and in Oklahoma, the state hired consultants to look into premium assistance, among other options. The state is expecting the report from the consultants in June.
Cost Effectiveness a Significant Concern
Despite the momentum surrounding premium assistance, such plans must demonstrate cost effectiveness and budget neutrality in order to receive CMS approval. This reality may serve to slow down and possibly reverse interest in premium assistance.
Alternative Florida Plan Pursues both Premium Assistance and Partial Expansion
Florida lawmakers, despite CMS’ explicit rejection of a partial expansion, continue to propose legislation to that effect. Florida House and Senate plans separate from the Negron Plan advocate premium assistance but do so:
Solely with state funds; and
Without fully expanding the insured population to 133% of the federal poverty level.
On April 11, Florida House Speaker Will Weatherford (R) introduced “Florida Health Choices Plus,” which is also a premium assistance alternative to Medicaid expansion. Only those earning up to 100 percent of the federal poverty level are eligible, i.e. $19,530 for a three-person family. The plan includes $2,000 premium assistance subsidies. With a deductible of $7,500, the family would need to spend one-third of its income before the premium assistance would kick in. A plan similar to Florida Health Choices Plus exists in the Florida Senate and is being promoted by Senator Aaron Bean (R). It remains to be seen how CMS will respond to such legislation.
Despite recent passage of the Arkansas bill promoting the premium assistance model (the Arkansas Model) in the Arkansas legislature, full details of the Arkansas Model have yet to emerge, and the Obama Administration has yet to formally approve the Model. In fact, no premium support proposals have been submitted to CMS.
Specific private insurance carriers have yet to be named, and it remains unclear if home health services will be covered. Commercial insurers could either expand home access to home care or restrict care authorizations, as has occurred in the past.
Another major concern is whether premium assistance models can be cost-effective and budget neutral. While flexibility has been given to states to pursue premium assistance models, it remains to be seen how tolerant CMS will be of partial expansion plans if and when they become state law in opposition to federal guidelines.
That said, despite the uncertainty, home health providers can look to the Arkansas Model as potential opportunity for increased reimbursement that may surpass Medicaid rates. However, commercial plans may also negotiate lower rates than Medicaid, as done in the past, in order to achieve budget neutrality. Home health providers should continue to monitor the status of Medicaid expansion in their states. The traction that the Arkansas Model has already garnered, especially given its recent passage in the Arkansas legislature, may be an indication of things to come. Home health providers are encouraged to contact NAHC with any questions or concerns.