By Sean Miskell and Joan Alker
Although we have been closely following Medicaid expansion waivers, we have neglected heretofore to blog about two “M” states that received waiver approval in the last few months of 2015. Montana received approval on November 2, 2015 to start its new coverage on January 1, 2016, and Michigan received approval of an amendment to its existing Section 1115 waiver on December 17, 2015.
Montana
CMS approved Montana’s Section 1115 Medicaid demonstration called the Montana Health Economic Livelihood Partnership (HELP) program which is slated to provide coverage to approximately 70,000 people. The state began providing this coverage to adults with incomes below 138% of the poverty line on January 1st, 2016.
The main issue under negotiation was the imposition of both premiums and cost-sharing for the newly eligible. As has been the case in other states, CMS approved premiums of 2% for those between 100-138% of the Federal Poverty Level (FPL) – analogous to premium levels in the Marketplace. As in Iowa, CMS allowed Montana to charge premiums starting at 50% of the federal poverty line. However, those beneficiaries living below the poverty level who are unable to pay their premiums will not be disenrolled, but this debt can become a lien on future state income tax returns. Those with incomes above the poverty line can lose coverage for nonpayment of premiums following a 90-day grace period. Ninety days is also the maximum amount of time that a beneficiary may be disenrolled for nonpayment, and they are permitted to reenroll once this period has passed and they have either paid past premiums or the state assesses the debt via income taxes. The enrollee does not have to reapply for coverage in this case.
The state will also charge maximum copayments permitted under regular Medicaid rules to those enrolled. It may come as a surprise to many, but Medicaid already permits states to charge copayments to adults unless they fall into certain exempt categories (i.e. pregnant women, American Indians, and dual eligibles to name a few). States do not need a waiver to do so. The new twist in the Montana agreement is that those who pay their 2% premium will see a credit towards copayment obligations. Some preventive services such as immunizations and medically necessary health screenings are exempt from copayments – one of the details to be worked out later was a more inclusive definition of preventive services.
On a positive note, CMS approved Montana’s request to provide twelve months of continuous eligibility to the new adults. This provision will reduce state administrative burdens and removes red-tape barriers for Medicaid beneficiaries whose income fluctuates frequently. Continuous eligibility also allows for states to do a better job in monitoring the quality of care. It was disappointing when Arkansas dropped this important provision from its waiver proposal, so it was good to see Montana become the second state after New York to receive waiver approval to do so.[1].
Michigan
Michigan, on the other hand, had already expanded Medicaid but has joined states such as Arkansas and Arizona in pursuing amendments to its existing Section 1115 waiver to make changes in the coverage they provide to their expansion population. In Michigan’s case this waiver amendment was foreshadowed in the initial state law authorizing expansion as a condition of continuing coverage. Michigan originally expanded Medicaid via a waiver that required beneficiaries between 100 and 133% FPL to pay 2 percent of their income in premiums. These payments go into a health savings account, and can be reduced if the beneficiary completes a ‘healthy behavior.’ Beneficiaries under the poverty line also have an account into which they contribute copays based on their usage of services for the previous six months. In terms of enrollment Michigan’s waiver has been very successful with over 600,000 individuals gaining coverage.
The agreement that CMS came to with Michigan on December 17 follows the contours of the state law but includes some important consumer protections compatible with federal requirements. Beneficiaries between 100% and 138% FPL (who are not medically frail) will have the option of enrolling in one of two coverage options: 1) a Qualified Health Plan (QHP) through the state Marketplace, or 2) the Healthy Michigan Plan, the state’s current Medicaid managed care program through which those newly eligible under the current waiver have been receiving coverage. Those above the poverty level that enroll in the Healthy Michigan Plan will now be required to complete a ‘healthy behavior’ (a list of such behaviors remains to be determined) but will receive a cost-sharing reduction upon doing so. Those who do not complete a healthy behavior will be transferred to Marketplace coverage, though there is a one-year grace period.
Contrary to the state’s original proposal, out-of-pocket costs will not be allowed to exceed 5 percent of income and premiums will not exceed 2 percent. There are no enrollment implications for those that cannot pay premiums. Those that choose to enroll in a QHP through the Marketplace will receive wrap-around coverage for any services provided under the state’s Medicaid plan but not covered through a QHP – no benefits were waived.
Michigan’s waiver does not go into effect until April 2018 per state law (!), so there will be plenty of time to understand these new requirements. It also provides time to analyze further details as they emerge such as the list of healthy behaviors and more detailed protocols regarding switching between a QHP and the Healthy Michigan Plan.
[1] Note to devoted SayAhhh! readers – states can provide 12-month continuous eligibility to children without a waiver but not for adults. Readers also may remember that Arkansas said it would be too expensive to implement 12-month continuous eligibility for its expansion population because CMS required that a short period each year of coverage would have to be covered at a state’s regular match rate. Now we see in Montana that the match rate reduction is manageable – Montana will make a downward adjustment of 2.6 percent in claimed expenditures that will be reimbursed at regular match rate.
