Yesterday my new report for the Kaiser Commission on Medicaid and the Uninsured was released called Premium Assistance in Medicaid and CHIP: An Overview of Current Options and Implications of the Affordable Care Act. The paper examines how statutory changes in the Children’s Health Insurance Program Reauthorization Act and the Affordable Care Act have changed the premium assistance landscape.
I have been working on this paper for a while and it was hard to bring it to closure because new things keep happening! And that continues to be the case with recent discussion of Arkansas’ interest in using a premium assistance option to expand Medicaid by purchasing exchange coverage.
In CHIPRA, Congress moved away from the idea of subsidizing coverage in the individual market but as the paper discusses the passage of the ACA and the establishment of new exchange marketplaces changed the landscape with respect to the individual coverage. CMS recently issued guidance on an obscure and previously little used premium assistance option – 1905a as I blogged about here – which allows for premium subsidization in the individual market. This looks to be the path that states like Arkansas are interested in, though many questions remain – questions such as whether it is feasible to provide wraparound services and whether such an approach will be cost-effective.
Whether many states go this route remains to be seen, so it is worth remembering that the most common kind of premium assistance program is the Medicaid Section1906 option – typically called Health Insurance Premium Payment (HIPP) programs. The paper takes a closer look at some of these programs that subsidize employer-sponsored coverage and provide benefits and cost-sharing protections if ESI does not cover them. As I note in the paper, states that move ahead with the Medicaid expansion may have opportunities to expand these programs as income eligibility for adults moves up the income scale resulting in more access to ESI and thus a better chance of proving cost-effectiveness.