Strategies and Considerations

• Often the “most expensive” adults are already covered. As a state considers the cost of a parent coverage expansion, it is important to take into account other eligibility groups that the state is already covering. Typically, states are already providing coverage to some of the most expensive groups of adults at higher incomes (e.g., pregnant women and adults with disabilities), so when they expand coverage to parents they are not picking up these costly individuals. In developing cost estimates, it is important to “back out” the cost of the more expensive groups of adults that the state is already covering (including those in state high-risk pools).

• A more comprehensive benefit package can bring in federal funds for services the state might otherwise pay for with state dollars. Over the years, states have added optional benefits to their adult coverage packages in part because without this coverage the state might be providing some of these health care services through public clinics or hospitals. By including these services as part of the Medicaid benefit plan for adults, states can draw down federal matching payments for health care services that parents need and that otherwise might be financed with only state or local funds. In addition, states have often covered optional services, like prescription drugs and targeted case management, for adults because coverage of these services can help avoid more costly “mandatory” care, such as in-patient hospital care.

• Drop (or liberalize) the asset test requirement;

• Use short, simplified mail-in applications and renewal forms;

• Eliminate requirements for face-to-face interviews at application or renewal;
  
  
• Limit paperwork requirements for verification of eligibility (subject to the citizenship documentation requirements that apply to most parents as well as to children);
  
  
• Renew eligibility every 12 months (instead of more frequently); and
  
  
• Conduct outreach to inform parents that they (as well as their children) may be eligible for Medicaid. States can receive federal matching payments to help defray the cost of outreach.

• The continuous eligibility option does not explicitly apply to parents, but states have the flexibility to effectively obtain the same result by opting to disregard changes in income that occur between renewal periods. (See Snapshot: 12 Month Continuous Eligibility for further information). For example, to promote continuity in family coverage (and reduce administrative costs) a state can decide to disregard all changes in earnings or changes in earnings that do not exceed a certain level (e.g., $100 per month) between renewals.2

• Presumptive eligibility is also not explicitly permitted for parents under federal Medicaid laws. The option for children allows states to authorize health care providers, community-based organizations, and other “qualified entities” to temporarily enroll children who appear eligible into Medicaid so that they can receive coverage while the agency determines eligibility. Under the option, the federal government guarantees federal matching payment for coverage during the presumptive eligibility period even if the child is later not found to be eligible. A state could effectively extend the option to family-based coverage by allowing qualified entities to presumptively enroll parents as well as children. The state would receive federal matching payments for services provided to parents during the presumptive eligibility period if the parent were ultimately found eligible as part of Medicaid’s retroactive coverage provision. If the parent were ultimately not found eligible the cost of the presumptive eligibility period for the parent would have to be covered with state funds.

• Premium assistance has potential advantages. To the extent that the state is subsidizing and supplementing an insurance plan to which an employer is contributing, premium assistance can potentially reduce the cost of Medicaid coverage,3 as the employer’s contribution reduces both the state and the federal shares of the costs. In addition, premium assistance can potentially open up access to providers that may not be participating in Medicaid.

• Some investments in private insurance, however, may not be cost effective and the costs per person could be higher than they might appear. Private insurance plans generally pay providers at higher rates than Medicaid so the cost of covering a parent by subsidizing a private policy might be higher than Medicaid, particularly when cost sharing and the scope of benefits covered under the private plan are taken into account. Cost effectiveness will also be affected by the size of the employer’s contribution and the state’s administrative costs, which can be significant particularly in light of relatively low take up.

Summary Framing the Issue Data Where States Stand Legislative Authority Strategies and Considerations Resources Download Brief (PDF)