Whither Premium Assistance??? (Part 1) – Say Ahhh! A Children’s Health Policy Blog

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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