Last week, the 2016 federal poverty levels (FPL) were published in the federal register. How does this impact consumers applying for coverage through the Marketplace, Medicaid or CHIP?
Let’s start with eligibility for Marketplace subsidies. For 2016 calendar year coverage, regardless of when someone applies or enrolls, eligibility is based on the 2015 FPL levels. For those more interested in the specifics, the most recently published FPL as of the first day of open enrollment remains in force for the full calendar year of coverage. Since enrollment opened on November 1 2015, the 2015 FPL will be applied for eligibility purposes for coverage for all of calendar year 2016.
For Medicaid and CHIP, the FPL that is in place at the time of application is used to determine eligibility, but Medicaid agencies have flexibility as to when they adopt the new FPLs. States typically make their system changes no later than April 1, and some move quicker than that. Last year, CMS encouraged states to adopt the new FPL levels as soon as practical. In the interim, some states may employ workarounds to account for the difference in the FPL levels. For example, they could “pend” applications “in the gap” until the system change has been made (as long as it’s not more than 45 days).
Last year, Healthcare.gov loaded up the 2015 FPL in early February but it’s our understanding that it’s likely to be March before the 2016 FPL has been put into production. In the 38 states that rely on the Healthcare.gov for Marketplace eligibility and enrollment, there could be a short period of time when the state Medicaid/CHIP system continues to use the 2015 guidelines while the FFM has moved on to the 2016 guidelines. However, the later date for loading the new levels in Healthcare.gov may lessen the probability of this happening this year. But what would it mean if the federal marketplace is using the 2016 FPLs when a state is still using the 2015 levels?
If an individual or family has income that falls into the difference between the two guidelines, it could be tricky. For example, 138% of the 2016 FPL level for an individual is now $16,394 – up from $16,243 last year. If an individual has income at $16,300, Healthcare.gov will transfer the account to the state to determine Medicaid eligibility. But if the state has not yet implemented the new level, it might deny Medicaid. Sometimes states will use a workaround to account for the gap in implementation, but we don’t have specific state-by-state information that tells us which states use workarounds or when states will put to the new FPL into place.
Just to make this dance a bit more interesting, we should distinguish between states that allow Healthcare.gov to make the final Medicaid or CHIP determination versus states that only allow the federal Marketplace (FFM) to “assess” Medicaid eligibility. According to the 2016 50-state survey, 8 states (AL, AK, AR, MT, NJ, TN, WV, WY) are currently “determination” states. The state must accept the FFM’s determination, so the state should enroll, not deny, Medicaid or CHIP coverage to everyone who applies through Healthcare.gov.
In the 13 states (CA, CO, CT, DC, ID, KY, MD, MA, MN, NY, RI, VT, WA) with an integrated State-based Marketplace and Medicaid eligibility and enrollment system, we anticipate that the changeover will not be an issue.
That leaves us with 30 “assessment states,” where there could be a lack of coordination. For the list of assessment states, see Table 7, page 40 of the 2016 50-state survey. As for OR and HI, these states have separate Marketplace and Medicaid eligibility and enrollment systems and it’s not clear how, or if, they will coordinate adoption of the FPL levels for Medicaid and CHIP eligibility.
Needless to say, this is a bit confusing. And it should work itself out within a few weeks. We’ll be sure to let you know when we get word that Healthcare.gov has been updated. At that point, enrollment assisters should be on the lookout for people who could be bounced between coverage options to make sure they get enrolled in the right program.
A special thanks to the Robert Wood Johnson Foundation for its support of our work on providing feedback to HHS and highlighting how ACA implementation is impacting consumers.