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States Confront Current and Future Insurance Coverage Challenges as Pandemic Persists
State Medicaid, children’s health insurance programs (CHIP) and health insurance marketplaces strive to prepare for an expected increase in the demand for their services as they navigate a world roiled by COVID-19, an economic downturn and ensuing budget crises, and unpredictable federal relief efforts.
Officials are trying to gauge the effects on individuals’ access to affordable health coverage as federal stimulus assistance, like the additional unemployment benefit, winds down. Adding to the uncertainty is how long the federal government will continue the public health emergency declaration, which allows states to employ many coverage flexibilities, particularly in Medicaid, to maintain individual coverage. Though they do not know when the public health emergency may end, state officials are already trying to prepare for it.
Background
Currently, there are two federal national emergency orders in place. On Jan. 31, 2020, US Department of Health and Human Services (HHS) Secretary Alex Azar declared a public health emergency and on March 13, 2020, President Trump signed an order proclaiming the COVID-19 pandemic a national emergency. The two declarations triggered a series of actions, including empowering HHS to temporarily waive or modify requirements for Medicaid, CHIP, and the Health Insurance Portability and Accountability Act (HIPAA). Together, these emergency authorities allow states to leverage Medicaid and CHIP Disaster Relief state plan amendments to make changes to help consumers access and maintain coverage, including using Medicaid’s presumptive eligibility to expedite enrollment and waive premium and copayment requirements for Medicaid and CHIP, critical for those with reduced incomes due to the pandemic.
Additionally, there have been federal aid laws passed with provisions to further protect individuals’ coverage. For example, the Families First Coronavirus Relief Act (enacted March 18, 2020) provides an additional 6.2 percent in federal matching funds (FMAP) to state Medicaid programs that meet the law’s maintenance of effort criteria, which includes not disenrolling anyone retroactive to March 18, 2020 through the public health emergency.
Due to the freeze on Medicaid disenrollments, state officials tell the National Academy for State Health Policy (NASHP) that their programs are serving more individuals than this time last year. However, even with enrollment simplifications, many states report they have not had big increases in Medicaid or CHIP enrollees. There are exceptions, Washington State officials report significant increases in Medicaid enrollment since March. Kentucky has also experienced steady new Medicaid enrollment, with state officials reporting “hundreds of thousands” of newly enrolled individuals. But many more state Medicaid and CHIP programs have been trying to prepare for an increased enrollment that has not yet materialized. States have faced the challenge of requesting that state funds be made available before they are needed during a state budget crisis in order to meet the anticipated demand.
The delay in Medicaid enrollment has surprised many state officials and national stakeholders. There continues to be massive job losses that threaten the availability of employer-sponsored insurance (ESI) – the source of health insurance for the majority of Americans. Without regular income, many may be unable to afford coverage on their own. However, some of these employees may qualify for coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), which allows former employees to purchase coverage under the health plan offered by their former employers for up to 36 months. Federal law requires that COBRA must be offered by business with 20 or more employees. Most states require smaller employers to also offer continuation coverage, including COBRA-like policies, in Arizona, Maryland, Massachusetts, Minnesota, New York, Rhode Island, South Dakota, Tennessee, Texas, and Vermont.
What Happens when COBRA Ends?
Recent Department of Labor guidance extends the period during which employees may elect COBRA (normally limited to 60 days after they receive their notice of COBRA eligibility), giving individuals up to 60 days after the end of the current national emergency to elect COBRA coverage. The guidance also allows for deferral of COBRA premium payments during the national emergency – however individuals are required to pay back deferred premiums once the emergency ends. These delays in coverage election and payment periods offer consumers greater flexibility in choosing COBRA coverage, but may also strain employer resources and disrupt employer markets as employers grapple with other challenges brought on by the pandemic.
It is also unclear if COBRA would be affordable for most eligible employees. While some employers may offer to pay all or some of a former employee’s COBRA expenses, in most cases employees are required to bear the full brunt of the cost of these plans. With average premiums costs exceeding $500 per month, this may be an untenable expense for newly unemployed individuals. However, federal aid laws and emergency declarations extended support for maintaining commercial – including employer-sponsored insurance – as well. For example, many of the commercial insurance requirements put in place (e.g., extension of grace periods) by state agencies are also tied to the declared national emergency and are set to sunset within a given period (usually 30 days) after the emergency ends.
As a result, officials suspect that some individuals and families are still enrolled in their commercial health insurance plans, benefiting from protections like the premium grace period, that allows them to sustain coverage even if they cannot pay. This is a temporary solution and unfortunately, many may find themselves seeking alternative health coverage options when the period of protection ends. Under the Affordable Care Act, individuals and families who may not be eligible for Medicaid, may successfully find coverage through the health insurance marketplaces.
Will Marketplaces Become the Safety Net?
State-based marketplaces (SBMs) have also been changing enrollment policies, preparing for and experiencing new enrollment. For example, many SBMs created new special enrollment periods (SEPs) to ensure that uninsured individuals who did not enroll during the traditional annual open enrollment period have access to advanced premium tax credits (APTC) – if eligible – and enroll in a marketplace plan. Some SBM officials have reported substantial enrollment hikes – from thousands to hundreds of thousands of new enrollees – which highlights the important role marketplaces are playing as millions of individuals and families experience job losses and income fluctuations. This coverage is filling the gap between employer-sponsored and Medicaid coverage.
One reason individuals and families could be maintaining their employer-sponsored coverage through COBRA or qualifying for APTC, rather than seeking Medicaid coverage, is the “bonus” unemployment income made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The additional $600 per week in unemployment payments must be treated differently when determining eligibility for Medicaid versus APTCs, which presented a significant challenge for eligibility systems. However, that bonus income is only available through July 31, 2020, at which point individuals may not be able to afford COBRA and may seek marketplace coverage, some already enrolled in a QHP may become eligible for an increased APTC, and others may be eligible for Medicaid depending their circumstances.
- Another new federal aid program, the Paycheck Protection Program (PPP), established to provide loans to small businesses that can be used to pay for payroll costs, including health benefits of workers, may be helping to keep individuals on their ESI as well. Businesses that receive these loans are eligible for loan forgiveness if they meet certain requirements including:
- Retention of the same number of full-time equivalent (FTE) employees that they had prior to onset of the pandemic (if FTEs were reduced prior to receipt of the loan they must be rehired during the loan period to meet this requirement);
- That 60 percent of PPP funds are used to cover payroll expenses. PPP loans can be used to cover either an 8- or 24-week period extending no later than Dec. 31, 2020.
However, a recent estimate released by the Congressional Budget Office projected that it may take nearly a decade for the US economy to recover from the economic fallout of this pandemic. These PPP requirements are only short-term fixes and without sustained support or success in curbing new COVID-19 cases, these businesses may not be able to sustain their employees’ ESI for long. The end result may again be more individuals and families seeking publicly subsidized coverage.
An Uncertain Future
As states try to anticipate the needs of their residents, there is much that cannot be predicted about individuals’ and families’ finances given the employment fluctuations, which in turn impact their access to affordable coverage options. Today, all focus is on whether the HHS Secretary will extend the public health emergency declaration beyond July 25, 2020 when it is currently scheduled to expire. Administration officials have indicated support for extending the declaration and state leaders have expressed why an extension is needed.
Even if the public health emergency is extended, there are mounting questions about whether or how states should relax any changes put in place under the emergency period. State officials also question the federal government’s expectation that state systems rapidly revert back to prior policies. While these measures were always intended to be temporary, when these policies are terminated at the end of the national emergency, thousands could face more restrictive coverage and higher cost-sharing policies at a time of economic uncertainty brought about by the pandemic.
The Centers for Medicare & Medicaid Services has provided states with some information about how to retain some of the Medicaid and CHIP flexibilities, but additional guidance is needed to assist states, particularly related to eligibility determinations. For example, when the requirement to freeze Medicaid disenrollments ends, states will need to begin conducting eligibility redeterminations again. States are estimating thousands of individuals currently enrolled in Medicaid could lose their coverage. This would be potentially problematic for:
- Consumers who could lose coverage;
- Providers whose patients could not pay for care; and
- States whose increasingly limited resources resulting from furloughs and layoffs due to the budget crisis would generate serious administrative burdens.
Many questions remain about how to best handle consumers who may be at risk of losing coverage once the public health emergency ends.
As COVID-19 cases continue to rise in the United States, now more than ever it is important for individuals to have a secure source of health care coverage. States are working diligently to get people the access to health coverage and resources needed in immediate response to the pandemic. However, states are also looking ahead, and bracing for the future when federal programs and deadlines end, yet residents’ need for insurance coverage persists.
NASHP will continue to track states’ efforts as they continue to modify their coverage programs in response to the ongoing pandemic.
Multiple Factors Appear to Be Contributing to Children’s Rising Uninsured Rates
US Census Bureau data released this past week revealed 8.5 percent (27.5 million people) did not have health coverage at any point during 2018 – an increase from 7.9 percent (25.6 million people) in 2017. The latest census data also affirmed fears raised after reports of declining child enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) that there was a rise in the overall uninsured rate for children – at 5.5 percent in 2018 – for the second year in a row.
Children’s uninsured rates have steadily decreased from 2008 when it was 9.7 percent to an all-time low in 2016 of 4.7 percent. However, the downward trend began to reverse in 2017 when the rate of uninsured children rose to 5 percent nationally and it has increased again in 2018. The resounding questions posed by state officials responsible for covering children in Medicaid and CHIP and other stakeholders are:
Why is children’s enrollment in public coverage programs declining and the uninsured rate increasing?
What is prompting an almost decade-long trend of increasing coverage for children to reverse?
According to the state officials who met and discussed children’s insurance enrollment at the 32nd annual National Academy for State Health Policy’s (NASHP) annual conference last month, there are no simple answers to these critical questions. They suggest that multiple factors, outlined below, are contributing to the decline.
Eligibility, Enrollment, and Retention Policies, Practices, and Systems
State officials explained that at the first indication of decreases in child enrollment in public programs, they looked inward to find a possible eligibility or enrollment system issue or policy problem to address. Although no one reported a major issue, many officials acknowledge that these policies and systems require continual updating and improving. Many officials want to further streamline the enrollment process for families by utilizing technology and existing data more fully, requiring less frequent renewals, and improving communication of what can be complex information for parents. Frustrating to many, these goals are not new and some are explicitly required by the Affordable Care Act (ACA), but still need attention. As states assess their systems and policies, there is a wealth of resources available to help them better target their investments.
This data suggests a strong economy does not guarantee access to health insurance. The 2018 data indicates that the percentage of people with private coverage (employer-sponsored, purchased, or Tricare) did not statistically change between 2017 and 2018. Therefore, even if the economy is helping families secure employment or increased income, it does not appear to guarantee access to health insurance.
The Strong Economy
It makes sense that during this time of job growth and low unemployment there would be a decreased need for public coverage programs. However, the data indicates that in 2018 the highest percentage of uninsured children (7.8 percent) were in families with incomes below 100 percent of the federal poverty level (FPL), which represents an increase over 2017. Also notable is the 0.7 percent increase between 2017 and 2018, of uninsured of children in families with incomes above 400 percent of FPL. This data suggests that a strong economy does not guarantee access to health insurance. Further, the 2018 data indicates that the percent of people with private coverage (employer-sponsored, purchased, or Tricare) did not statistically change between 2017 and 2018. Therefore, even if the economy is helping families secure employment or increased income, it does not appear to guarantee access to health insurance.
Changes to National Immigration Policies
State officials also suggested that changes to federal immigration policies have an effect on the decline in children’s enrollment in public programs and the increase in overall uninsured rates. According to a 2018 Urban Institute survey, the rule allowing the Department of Homeland Security to consider immigrants’ use of Medicaid when determining if they are or could become public charges has had a chilling effect on enrollment even before the rule became final. Although children’s use of Medicaid and CHIP is explicitly excluded from the final public charge rule, it is a complicated rule and is likely unclear to families who must determine how use of public coverage could affect their potential citizenship status. The data confirms that in 2018 naturalized citizens were 2.2 percent more likely to be uninsured. The data also indicates that in 2018, 8.7 percent of Hispanic individuals were uninsured, which is double the rate of other races or ethnicities in the report. All of which supports the speculation that immigration policy changes have had an impact on the rising rate of uninsurance.
Lack of Outreach and Marketing Funds
Outreach and marketing often take a backseat to other administrative and operational budget demands, particularly because state resources are already stretched thin. Instead, many state children’s coverage programs maintain active partnerships with community-based organizations and seek other low- or no-cost ways to get the word out about the availability of coverage. However, more and more state officials would like the opportunity to engage families to help them identify what messages resonate and the best ways to deliver them, such as social media or more traditional advertisements. State Medicaid and CHIP programs were benefiting from the federal navigator program that supported individualized health coverage application assistance, but in recent years, federal investment in that program has steadily declined.
Federal Policy Changes Affecting Affordability and Undermining the ACA
Finally, some state officials acknowledge that federal policies that supported the ACA have changed and may have impacted uninsured rates. Such policies include the elimination of the cost-sharing reductions and the federal reinsurance program, as well as others that have resulted in higher health insurance premiums and as a consequence lower enrollment. It is suspected there could be a relationship between parents’ loss of coverage and the decline in children’s enrollment. The ACA requires parents seeking coverage through health insurance marketplaces to enroll their eligible children in Medicaid or CHIP. If parents, who are no longer subject to the federal insurance mandate, are deterred by cost from seeking to enroll themselves in coverage, they may be missing the prompt to enroll their children during ACA’s open enrollment period and it could be a factor in the climbing child uninsured rate as well.
Without a clear cause and with multiple contributing factors for the declining children’s enrollment in public programs and the rising uninsured rate, states are challenged to identify how best to invest their limited resources to the address this issue, though many officials are deeply engaged in addressing this problem. NASHP will continue to work with states to understand better the emerging enrollment and uninsured data and to provide resources on tested and effective enrollment and renewal policies and practices to support state efforts to make sure eligible families have health coverage.
Montana Uses Patient-Centered Medical Homes to Holistically Address Children’s Health Needs
Montana recently expanded its Patient-Centered Medical Home (PCMH) program benefits to most children enrolled in Medicaid and the state’s Children’s Health Insurance Program (CHIP). Montana enhanced its PCMH program by:
- Expanding the pool of approved providers;
- Increasing the number of quality measures that must be tracked; and
- Adding complex care management (CCM) – a coordinated care approach designed to help patients and caregivers better manage medical conditions and co-occurring psychosocial factors and reduce hospitalization.
The primary goal of broadening these benefits is to promote the health of children through better preventive care and to appropriately treat chronic diseases by increasing primary care visits and encouraging healthy habits. Over time, the state hopes that this strategy could reduce emergency room visits and drive down costs associated with care.
Montana broadened the eligible providers and services offered to Medicaid and CHIP recipients by integrating the PCMH program with the state’s existing Comprehensive Primary Care Plus (CPC+) initiative that began in 2017. To integrate these programs, Montana aligned its quality measurement and data collection work, so that both initiatives gather and report on the same measures. The state requires that PCMH providers:
- Obtain National Committee for Quality Assurance accreditation;
- Apply to become a PCMH provider; and
- Report on 21 quality metrics. These metrics include management of A1C control in diabetic patients, blood pressure control in hypertension patients, behavioral health screenings and referral to necessary treatment, preventive screenings, and age-appropriate immunizations.
The ultimate goal of PCMHs is to deliver high-quality, cost-effective care by engaging enrollees as stakeholders in their health. The state also recently began building an infrastructure to help ensure the PCMH program is sustainable – these efforts include developing new information technology systems to standardize data collection.
Montana’s work to develop its PCMH model first began in 2009 after the state received a technical assistance grant from the National Academy for State Health Policy (NASHP) to advance the multi-payer Patient-Centered Medical Home Initiative that included Medicaid and CHIP children. Two years later, the state’s PCMH working group was reorganized and is now an official state advisory council comprised of insurance companies, medical providers, public agencies, and consumer advocates.
In 2013, the initiative was enacted with provisions defining expectations and requirements for these medical homes, and a PCMH pilot program was implemented in 2014 that included four federally qualified health centers (FQHCs) and a hospital. That same year, PCMH benefits became available to Medicaid-enrolled children, and in 2017 coverage was expanded to CHIP enrollees. Montana uses a third-party administrator to oversee CHIP members. The third-party administrator uses both the PCMH and CPC+ model, however, they are not the same as the state-run program and do not include the CCM program.
The CCM model engages a comprehensive team of health care professionals. In Montana, the team includes a primary care physician, a licensed nurse, a behavioral health professional, and a social worker in order to treat patients multi-dimensionally. Teams may manage up to 30 members in the CCM program and members must be attributed to the practice through the PCMH model. To be eligible, enrollees:
- Must have two or more chronic conditions;
- Be open to intense, in-home care coordination; and
- Have visited the emergency room multiple times in the last 60 days or had more than one inpatient hospital stay in the last six months.
To access PCMH care, a child’s medical provider must participate in the program.
The non-physician members of the CCM teams try to meet with the member in his/her home and then collaborate with the PCP to design relevant interventions and preventative services based on the teams’ observations. Meeting with the member in his/her home may not happen initially, but it is important to understand the patient’s physical environment to create a holistic treatment plan. These visits must happen at least weekly for the first three months and then at least monthly for the next three months. Visits occur based on the needs of the patient and usually happen more often than required by the program.
The program seeks to engage the member and his/her family in order to meet all of the needs of the household and connect members to appropriate resources. The teams assess other factors affecting the patient’s well-being, such as social determinants of health at the initiation of and conclusion of PCMH appointments to measure the effectiveness of the intervention.
The state’s next steps are to create performance-based incentives for physicians to promote the quality of care, and to continue to refine the PCMH model to address the unique needs of children in Montana.
For more information about states’ efforts to implement patient-centered care models, see more NASHP resources on delivery system reform and primary care and medical homes.
Medicaid and CHIP Levers to Promote Lead Screening and Treatment: Indiana’s Experience
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Addressing lead hazards today generates future economic benefits and improved health outcomes for children. In partnership with the Health Resources and Services Administration, NASHP is publishing a series of case studies highlighting state initiatives to promote lead screening and treatment. This study explores Indiana’s efforts to address this issue within its Medicaid and Children’s Health Insurance Program.
- View or download: State Levers to Promote Lead Screening and Treatment: Maryland’s Strategies
- View or download: Medicaid and Children’s Health Insurance Program Levers to Promote Lead Screening and Treatment: Indiana’s Experience
- To learn about other state initiatives, read NASHP’s 50-State Scan of State Health Care Delivery Policies Promoting Lead Screening and Treatment.
A Snapshot of State Efforts to Reach and Enroll Children for State Medicaid and CHIP Programs
In 2018, the number of children enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) declined 2.2 percent. It is not known if these children moved to other sources of health coverage, like employer-sponsored insurance, or became uninsured until publication of the US Census Bureau’s American Community Survey this fall. However, last year’s decline is significant because there has not been a drop in child enrollment in Medicaid and CHIP since 2007.
Many states are re-assessing their approaches to Medicaid and CHIP outreach and enrollment and are interested in learning new, promising practices from others. The Centers for Medicare & Medicaid (CMS) recently awarded $48 million in outreach grants to 39 recipients in 25 states, including New Jersey’s Department of Health and Human Services, to enhance and improve enrollment of children in public coverage. Currently, CMS is accepting applications to distribute an additional $6 million in grant funds to states and community-based organizations to increase enrollment of American Indian and Alaska Native children in Medicaid and CHIP.
The federal grants are designed to help states generate effective outreach and enrollment strategies that all states can learn from and adapt for their own programs. The following highlights some of the ways that states are using community and school partnerships, social media, and other targeted outreach initiatives to ensure that families who may have eligible children are aware of these coverage programs.
Community Partnerships
While many states collaborate with community organizations to help enroll children in Medicaid and CHIP, Wisconsin’s outreach efforts via community partnerships are robust in scope and execution. The state takes a multi-pronged approach by engaging the Community Healthcare Access Program (CHAP), Covering Wisconsin (CWI), and the Milwaukee Enrollment Network (MKEN) to distribute information about health insurance – including CHIP – at local churches, daycare programs, neighborhood community events, and other social functions. CHAP has become an important health care coverage resource for Wisconsin families over the program’s 11-year history by using mobile hot spots, which allow enrollment workers to efficiently set up and manage events while streamlining the process of disseminating information to consumers and enrolling eligible children.
CWI employs focus groups so officials can better understand how to package information in consumer-friendly ways. Based on focus group feedback, CWI has created clear and concise informational materials targeted to specific audiences with easy-to-follow steps for families to sign up for Medicaid and CHIP. CWI also trains employees at local health centers and schools about how to educate residents (including parents) about available health insurance options.
MKEN, a coalition of about 100 organizations operating in Milwaukee County, targets low-income consumers and special populations by conducting outreach at job fairs, schools, pharmacies, and other community-based events. By conducting outreach through multiple organizations, Wisconsin leverages these partnerships to efficiently target multiple populations who may be eligible for Medicaid or CHIP.
School-based Outreach Efforts
Virtually every state has some form of “back-to-school” program at the core of its outreach efforts, and state health officials often coordinate with school administrators and nurses to enroll eligible children in Medicaid and CHIP. Connecticut’s health insurance exchange, Access Health CT, partners with the Department of Social Services and the Department of Education to identify uninsured students in the public school system and conduct targeted outreach to their families. A new state law mandates that each regional education board report every student’s insurance status. As a result of having various departments and agencies work together and mandating insurance status reporting, Connecticut has developed a comprehensive and coordinated approach to reach school-aged children who may qualify for Medicaid or CHIP coverage. Florida’s KidCare builds and maintains partnerships with school nurses and administrators to disseminate information about CHIP to the parents of potentially eligible children.
Medicaid and CHIP programs in many other states, including in North Carolina, Virginia, Arkansas, Massachusetts, and Missouri, partner directly with school nurses. School nurses are often privy to the insurance status of students, which helps them identify children who might be eligible for Medicaid or CHIP so they can provide their parents with information about the coverage. Wyoming has even recruited school counselors and psychologists to assist in monitoring insurance status and conducting CHIP outreach.
Social Media Campaigns
With the rise of social media use, many states have incorporated Facebook, Twitter, and Instagram in their outreach efforts. Social media as a tool for Medicaid and CHIP outreach is a cheap, effective method for engaging with low-income families. The nature of the platform also comes with built-in analytics, allowing states to observe the impact of their efforts, such as how many people were reached and how many interacted with the platform.
In May through July of 2018, Pennsylvania conducted an outreach campaign called “CHIP Strong,” and the social media portion of the initiative ran on Facebook, Instagram, and Twitter. Analytics from the campaign showed promising results. The campaigns generated:
- 16,627,352 impressions and 23,468 link clicks with an overall click through rate of 0.30 percent;
- 1,534 new page fans on Facebook; and
- 34 new Twitter followers and 131 conversations, all of which helps spread information about the coverage programs.
Arkansas also makes use of Twitter and Facebook to advertise its ARKids First program. State officials have found social media outreach to be particularly effective for targeting low-income parents. Florida uses the built-in analytics of social media platforms to assess data about how many people viewed an advertisement, how many people clicked on it, and the zip codes that enrollees live in to help target their efforts.
Targeted Outreach Initiatives
Many states tailor their outreach initiatives to ensure they are connecting with all potentially eligible families. For example, Florida’s KidCare program targets its outreach efforts by analyzing publicly available data from sources, such as the US Census, to identify uninsured or underinsured residents in certain counties for whom outreach and coverage educational materials may have the greatest impact. North Carolina uses a data-driven approach in its Division of Health Benefits’ enrollment dashboard. The real-time data collected through the website is organized by county, and enables comparison between regions, allowing for more precise targeting to populations eligible for Medicaid and CHIP.
Some states with significant Native American populations develop specific outreach partnerships to engage them. Of the 573 federally recognized tribes, 231 are in Alaska, so the state developed partnerships with Tribal Health Organizations to help spread the word about CHIP and Medicaid programs. Alaska initiated Tribal Medicaid Administrative Claiming (TMAC) in 2016 to strengthen the relationship between Alaska’s Department of Health and Social Services, promote access to Medicaid and Denali KidCare to Native Americans, and reimburse Tribal Health Organizations for performing Medicaid and Denali KidCare outreach and linkage activities.
Oklahoma’s Health Care Authority has a Tribal Government Relations Unit, which is responsible for working with tribal governments and their related health systems. Unit staff often attend tribal health fairs and other outreach events to enroll tribal citizens in public coverage and disseminate other health information. North Carolina also invests heavily in outreach to its eight Native American tribes by conducting outreach at various community events, including the Unity Indian Conference.
As this snapshot of programs demonstrates, state Medicaid and CHIP agencies use a wide range of thoughtful, tailored outreach strategies. States are continually working to find new ways to reach eligible children and efficiently target their outreach initiatives. The new federal outreach grants will help support states and community-based organizations to test new strategies to reach and enroll children in Medicaid and CHIP.
Changes to Poverty Measure Could Disqualify Thousands from State and Federal Programs
The Office of Management and Budget (OMB) is seeking public comment on possible changes to how the federal poverty measure is annually adjusted for inflation. The changes would impact individuals’ eligibility for multiple programs because the US Department of Health and Human Services uses the poverty measure to establish poverty level guidelines. A wide range of government assistance programs would be affected, including:
Alternative methods proposed by OMB … could reduce the poverty line by up to 3.4 percent over the next 10 years.
- Medicaid
- Children’s Health Insurance Program (CHIP)
- Advanced Premium Tax credits (APTCs) and cost-sharing reduction payments (CSRs) allotted through state health insurance marketplaces
- Supplemental Nutrition Assistance Program (SNAP)
- Women, Infants, and Children (WIC) program
- Health Professions Student Loans
- AIDS Drug Assistance Program
- Community Health Center funding
- Low Income Home Energy Assistance Program (LIHEAP)
Currently, the poverty measure is adjusted by a factor known as the Consumer Price Index for all Urban Consumers (CPI-U), which has been in place since the measure was implemented. While changes could affect long-standing eligibility for state and federal programs, OMB states that an alternative inflation index would more accurately measure inflation. Alternative methods proposed by OMB include use of the “chained” CPI or the Personal Consumption Expenditures Price Index (PCEPI) — these two measures grow more slowly than the CPI-U and could reduce the poverty line by up to 3.4 percent over the next 10 years.
Over time, a slower rate of inflation would significantly impact individuals’ eligibility for the programs listed above. At particular risk would be individuals whose income hovers at the margin of eligibility, who would lose eligibility if the calculation was modified. For example, estimates indicate that more than 500,000 would lose eligibility for Medicaid or CHIP, including 300,000 children. In addition, the millions of Americans who qualify for subsidies to purchase coverage through the insurance marketplaces would see a reduction in the amount of subsidies they receive that make coverage more affordable, or they could become ineligible for those subsidies altogether. Similar reductions in eligibility would occur across programs critical to social determinants of health, including food assistance programs (SNAP and WIC) and early education programs such as Head Start.
An increase in the number of low-income individuals who are no longer eligible for health and other social supports could have significant repercussions on states’ safety net programs. There will be a rise in the number of uninsured as individuals lose eligibility for, or are priced out of coverage. Some may use their limited income for necessities like food, child care, and utilities instead of health care. These changes could result in increased uncompensated care costs. Additionally, states’ health care system costs could increase if individuals without coverage delay seeking care and wait to seek treatment for conditions only when they become urgent — and more costly to treat.
Additionally, using the chained CPI may not fully account for the rising price of necessities that low-income households spend a larger percentage of their income to purchase, such as housing, which in recent years has increased faster than overall CPI. Many analysts, as well as the National Academy of Sciences, have noted that the current poverty measure already does not accurately capture important costs such as child care that strain many low-income families’ budgets.
Comments on the OMB proposal are due Friday, June 21, 2019 and can be submitted here. Following this comment period, it is unclear whether the administration will conduct a more formal rule-making process related to these potential changes, or simply seek to implement them through OMB guidance.
