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Vorys Health Care Advisors

Health Care Reform: Count Down to Decision Day (Part II)

Posted in Health Care, Health Care Reform, Medicaid

In our last post, we discussed the practical impact on the American public of the Affordable Care Act’s Medicaid expansion.  There are also significant repercussions for states, as described below.

What does the Medicaid expansion really mean for States?  For Ohio, specifically?

• States will be responsible for up to 10% of the cost of the expansion population.  The federal government will pay for 100% of the cost of the expansion for the first two years, decreasing to 90% in 2020 and beyond.

• Medicaid eligibility will be based on income only, with no asset or resource test.  This is a significant departure from the way most states currently determine eligibility.

• Using available tax return information, states will apply the modified adjusted gross income (MAGI) standard for determining financial eligibility for most Medicaid and State Children’s Health Insurance Program (SCHIP) enrollees. This includes a special income adjustment of 5 percentage points (so 133% of the federal povert level becomes 138%).  This is also a departure from the way states determine eligibility today.  The transition to MAGI will require considerable systems and process changes by states, plus a significant increase in state/local capacity to process millions of applications.

• States must extend Medicaid coverage to individuals under age 26 who were in foster care at age 18.  This includes EPSDT coverage.

• Starting in 2014, considerable interface will be required between Medicaid, SCHIP, and the new State Health Insurance Exchanges.  Specifically, states must:

  • Allow individuals to apply for Medicaid, SCHIP, and Exchange plan coverage through a single state-run website.
  • Allow Medicaid applications and renewals online, with electronic signatures.
  • Conduct outreach to uninsured and underinsured.
  • At state option, the Exchange may determine eligibility for premium subsidies.

• Ohio is preparing for the expansion by modernizing its eligibility determination system.  As a result, the state is proposing the following:

  • Cover children in families with MAGI up to 200% of the federal poverty level (FPL), and adults up to 138% of the FPL.
  • Maintain existing eligibility for individuals who use long term care services, such as residents of long term care facilities and individuals enrolled in home and community based waivers.
  • Otherwise eliminate spend-down, disregards, category-specific income treatment, and the need for a state or federal disability determination in order to qualify for Medicaid benefits.
  • Create a hold-harmless, grandfathered category for individuals already on the program who might be disadvantaged by implementation of eligibility program changes.

Less than a month remains before the Supreme Court is likely to announce its decision on health care reform.  In the days shortly following the U.S. Supreme Court’s ruling regarding the Affordable Care Act, Vorys Health Care Advisors and Vorys, Sater, Seymour, and Pease will host a complimentary webinar regarding the decision.  Watch this space for details.