Affordable Care Act: State Action Newsletter
March 23, 2012
States Are Considering Basic Health Programs
For many low-income singles, who make between $14,500 and $22,000 a year, getting health care coverage is not a simple task. This group tends to bounce in and out of eligibility for Medicaid, sometimes several times in a year. Once insurance exchanges come online, the same problem is likely to exist concerning their eligibility for premium subsidies. This reality is administratively expensive for states and bad for patients’ health, as they may not get coordinated health services that come with consistent coverage.
To address the issue, the Affordable Care Act created the Basic Health Program, in which the federal government will pay states a yearly lump sum, equivalent to 95 percent of what the state might have spent on tax credits and premium subsidies in exchanges. In turn, the state contracts with a health plan to cover adults who make between 133 percent and 200 percent of the federal poverty level and legal immigrants with incomes below 133 percent of the poverty level who are ineligible for Medicaid. The goal is to save states money by allowing for benefit design flexibility and give beneficiaries a health plan that meets their specific needs, such as transportation services.
States are exploring their options. Connecticut, Hawaii, Illinois, Michigan, New York and Washington are considering legislation to create Basic Health Programs. Illinois, Maine, New Mexico, New Jersey, Rhode Island, Utah and Vermont enacted legislation requesting state agencies or the governing boards of the exchanges to create a BHP or study the issue and make recommendations.
As additional guidance emerges on a variety of ACA components, more states may consider this option. For now, there are a number of unanswered questions: How much will this program cost the state? Will the federal payments to states be enough? Who will really be eligible for the program?
Webinar—The Affordable Care Act and Community Health Centers—April 5, Thursday, 3 p.m. ET
Community health centers provide health care services for millions of people nationwide. With a patient mix that is comprised mostly of the uninsured and Medicaid beneficiaries, health centers rely on Medicaid, federal grants and state funding to keep their doors open. The Affordable Care Act will affect how community health centers are financed and how they deliver health care.
Learn how ACA-related changes to Medicaid and the public health infrastructure will affect community health centers from an expert panel including: moderator David Sundwall, former executive director of the Utah State Department of Health; Dawn McKinney, director of state affairs, National Association of Community Health Centers; Catherine Hess, managing director for coverage and access, National Academy for State Health Policy; and Matt Salo, executive director, National Association of Medicaid Directors. Click here to learn more and register.
Inside This Issue
The Texas Approach to Fighting Medicaid Fraud and Abuse
A recent NCSL webinar explored ACA requirements designed to help states improve the integrity of the Medicaid program and presented innovative state strategies to address fraud and abuse.
The Lone Star State has experienced enormous improvement in preventing improper payments, identifying fraudulent activities, and recovering erroneous Medicaid payments. According to Jack Stick, Texas Deputy Inspector General of Enforcement, the Office of the Inspector General made simple investigative changes and introduced a new system of pattern recognition and analysis, which have significantly enhanced Medicaid integrity efforts.
Real savings—in the hundreds of millions of dollars—have come out of some changes to the way the office investigates fraud. By developing new teams of expert investigators and prioritizing caseloads based on available resources and potential for large recoveries, the office’s average investigation time plummeted from 42 months to two months. Investigation completion rates increased 25 percent.
“[These simple changes] have done more to identify lost dollars and increase recoveries than any other single thing the state is doing,” said Stick.
Texas’s next line of defense is one that’s going to give them near real-time analysis to stop waste, fraud and abuse before it happens. Stick calls this new ‘pattern recognition analysis’ technology “the next line beyond predictive analytics and data mining.” It’s capable of sifting through nearly limitless data to identify suspicious activity.
The ACA now requires states to suspend payment to providers who are suspected of fraud. Texas implemented this strategy, replacing the traditional “pay and chase” model that they, and other states, have often used.
To learn more about what Texas is doing to improve Medicaid integrity, and to hear New York’s approach to fighting fraud, listen to an audio archive of the webinar.
PREP Grants Available Soon
The ACA authorized $75 million a year for five years for the Personal Responsibility Education Program, created to educate young people, ages 10 to 19, on abstinence and contraception to prevent pregnancies and sexually transmitted infections, including HIV/AIDS.
States that applied for the funds did not have to meet any cost-sharing or matching requirements. The first grants went to 43 states in 2010.
After a series of late applications and one returned grant, five states and five territories/commonwealths did not receive the funds. A provision in the law, however, allows local entities in these states to apply for the dollars the state did not claim. More than $22 million in new grants will be available soon for qualified city and county governments, nonprofit organizations, independent school districts, faith-based organizations, and others in Florida, Indiana, North Dakota, Texas, Virginia, Guam, American Samoa, Northern Mariana Islands, the Marshall Islands and Palau.
In addition to sex education, programs using this funding must address at least three of the following topics: healthy relationships, adolescent development, financial literacy, parent-child communication skills, education and employment preparation skills, and healthy life skills. Funded programs are required to target young people who are at a high risk for teen pregnancy, and curricula must be medically accurate and age appropriate.
Exchange Update: New Jersey passes bill; HHS releases final rule
Last week, the New Jersey Legislature passed AB 2171, to create a state health insurance exchange as an independent agency within the Department of Banking and Insurance. It will be governed by an eight-member board that will develop a plan for certifying all participating health plans, among other things. A 15-member advisory committee will also be created to inform the board on key decisions and functions of the exchange. If signed by the governor, New Jersey will become the 11th state to create a state-based health insurance exchange.
States working on exchanges now have more guidance from the federal government. The final and interim rules governing the establishment of exchanges and qualified health plans were released on March 12, 2012. The final rules set the minimum federal standards states must meet to establish and operate their own exchange.
For more information, visit NCSL’s American Health Benefit Exchange webpage.
Maryland Expands High-Risk Efforts
On March 19, the state kicked-off a major marketing campaign designed to increase participation in the federal option of the Maryland Health Insurance Plan, the agency which manages both the federal and the state high-risk efforts. The marketing campaign explains the differences in the two similar programs. For example, the federal risk pool has lower monthly premiums, includes child-only policies and doesn’t draw on state budget resources.
Maryland created a state high-risk pool in 2003 for people denied commercial health insurance. By the end of 2010, enrollment had grown to more than 19,900, making it the third largest program nationwide. The federally authorized and funded Pre-existing Condition Insurance Pool, although much smaller, has also grown—from 145 enrollees on Feb. 1, 2011, to 741 on Dec. 31, 2011. Click here for more information on state and federal high risk pool programs.