Whither Premium Assistance??? (Part 1)

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I started studying premium assistance programs in Medicaid and CHIP a decade ago with a large dose of skepticism. The idea of buying private coverage with public dollars when it is more expensive and typically covers fewer benefits than Medicaid struck me as a bad deal for beneficiaries and taxpayers alike. In many cases this is so. And most low-income families do not have access to decent employer coverage which has contributed to very low enrollment in most premium assistance programs. And because of the optics, many policymakers wildly over promise with respect to what premium assistance programs can deliver and pay scant attention to whether it will actually work and save money.

But over the years I have developed a more nuanced view about premium assistance - in some cases, if done right, premium assistance has advantages for families.  If families (and the taxpayers) don't have to pay more, and the benefits are just as good, premium assistance programs may offer a wider choice of providers and coverage for a parent who is otherwise ineligible because children's eligibility allows a family to pick up employer-sponsored dependent coverage for the whole family.

There are still many premium assistance proposals that come across my desk which reflect a rigid ideological bent and are not well conceived - the Florida legislature for example is currently considering a proposal for a waiver request to give all Medicaid beneficiaries a voucher to go out and buy private insurance - or as the Appropriations proviso reads "to allow Medicaid recipients to be integrated into the private insurance market". Hmmm.  Medicaid covers folks whose incomes are too low to be able to afford the costs of private insurance or whose chronic health care needs are often not covered by private insurance so how is that going to work without them losing access to the services they desperately need?? Sadly, rational discussions about premium assistance in the legislative world are few and far between.

But in light of the passage of health reform and CHIPRA it seems like a good time to re-evaluate where premium assistance is headed. Today let's cover the new health reform bill and tomorrow I will take a look at CHIPRA where there are some interesting developments.

The underlying health reform bill, which passed the Senate on December 24th, included a requirement that states do premium assistance if it is cost-effective. In fact Section 2003 of the bill is titled "Requirement to offer premium assistance for employer-sponsored insurance." This section amended a relatively obscure part of the CHIPRA law that created a new premium assistance option in Medicaid (known to policy wonks as "1906A") for kids, broadened it to all Medicaid beneficiaries and mandated states to do it as of January 1, 2014.

However, some Senators were not happy about this requirement, and the Manager's Amendment in Section 10203 which extends CHIP funding and includes "other CHIP-Related Provisions" deems the mandate "null, void and of no effect" in paragraph (b)(2)(B). So this leaves states with the same options they currently have under CHIPRA with an opportunity to apply the Medicaid option more broadly to all Medicaid beneficiaries as of January 1, 2014.  So in my "Whither Premium Assistance" blog part 2 I will explore the new CHIPRA options including the scintillating topic "Section 1906A" in more detail.

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BEING THE SECOND PART OF THE "WHITHER PREMIUM ASSISTANCE" from Say Ahhh! A Children's Health Policy Blog on April 22, 2010 4:57 PM

Welcome to Part 2 of my musings about the state of premium assistance. Part 1 left us with the teaser that CHIPRA includes new premium assistance options, which the new health reform law incorporates and expands to all Medicaid beneficiaries... Read More

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