Where we left off: I was musing that the new CHIPRA options to do premium assistance may not prove to be all that much more attractive than the existing ones. Some states may reconfigure their programs (if they can) to qualify for the performance bonus. So far there hasn’t been a rush to pick up these options. But as we know from the GAO report, a majority of states are already doing some form of premium assistance today.
Yet what about in 2014 when the Medicaid expansion in PPACA kicks in?? On the Medicaid side, states will have two options – the existing Section1906 option and the CHIPRA 1906a option that will be extended to new populations as of January 1, 2014 by PPACA. When states move to an across-the-board eligibility of 133% of FPL, what will this mean for the success or failure of premium assistance programs in Medicaid?
In some ways, premium assistance may be more attractive to states that currently have low parent eligibility levels because the whole family will now be covered through Medicaid. This will make the cost-effectiveness equation more favorable, and eliminate the problem I described in Part III of this blog about states having to provide a wraparound for parents in the new Section 1906a option. But enrollees in most premium assistance programs that I have looked at tend to cluster at the higher end of the income eligibility scale – which is usually above 133% of FPL – because access to employer-sponsored insurance is so scarce at these low income levels. And we are talking really low — recent data from the Urban Institute suggests that only 14% of people below 133% have employer-sponsored insurance.
For families above 133% of FPL, the question is more complicated – especially in states with more generous income eligibility today. The maintenance of effort requirements for kids in Medicaid and CHIP are in effect until 2019 while their parents are most likely going to be in the new Exchanges receiving a premium subsidy or receiving coverage through their employer. This might make premium assistance an attractive option from the perspective of keeping the family together – assuming kids don’t lose benefits or cost-sharing protections in the process. The impact of reform on costs in the private markets may prove a factor in states’ thinking about whether to pursue premium assistance options. So, a lot to mull through there and food for future blogging thoughts. That will have to wait for the Appendices.