Saturday, May 20, 2017

Study of Ind. Medicaid, proposed model for Ky., finds more than half of enrollees missed paying a premium and thus lost coverage

By Melissa Patrick
Kentucky Health News

Kentucky's plan to change Medicaid would require poor people to pay small, income-based premiums for coverage. That creates a barrier to health care, says a study of Indiana's similar plan allowed by a federal waiver.

“During the first 21 months of the waiver program, 324,840 (55 percent) of the 590,315 people eligible to pay didn’t make a required payment at some point. All of them were then kicked off of Medicaid or were left with inferior coverage," the liberal-leaning Kentucky Center for Economic Policy said on its policy blog.

Indiana's program requires enrollees to pay between $1 and $100 a month, depending on income, to participate in the plan with the most benefits, including dental and vision. This is the only plan available to Hoosiers above the federal poverty line.

If the enrollees fail to make a payment, those above the poverty line are disenrolled and locked out of the program for six months, while those in poverty are moved to a more limited plan that requires co-payments for all services, has lower service limits and limited drug benefits, and does not include dental and vision benefits.

Under Kentucky's proposed waiver, those who fail to pay would face a six-month lockout unless they pay back three months' worth of premiums and take a financial or health literacy class. Kentucky's plan does not include dental or vision benefits, though these benefits can be earned through a rewards program. This plan is expected to be approved in June, and to go into effect Jan. 1.

Kentucky's plan is modeled after Indiana's. Both were designed by Seema Verma, the new administrator for the Centers for Medicare and Medicaid Services. She has recused herself from the decision on Kentucky's plan, but it's expected that under her leadership other states will be allowed to impose similar monthly fees.

The proposed premium requirements in Kentucky's waiver plan, called Kentucky HEALTH, are based on income and the length of time a person is enrolled, if above the poverty line.

Premiums would be $1 to $15 per month, based on income, and would rise in incremental limits for those above the poverty line after the second year to a limit of $37.50. The federal poverty line for an individual is annual income of $12,060.

The Indiana plan, which took effect in 2015, was evaluated by the Lewin Group, a health-care consulting firm, using almost two years of data.

Among the 55 percent who had missed a premium payment, most (57 percent) were at or below the poverty level, which allowed them to drop to the lower-tier plan instead of being locked out.

"We can expect large numbers of Kentuckians to be left without coverage if the waiver is approved by the federal Department of Health and Human Services," KCEP said. "The assessment of the Indiana waiver confirms that both the cost and process of paying premiums is a barrier to coverage for low-income people."

The report, which was limited to Indiana, and the KCEP did not estimate how many Kentuckians might regain coverage by getting premiums up to date and taking a health or financial literacy course.

The report found that almost half of those who were kicked off the Indiana program or never made an initial payment did have insurance, mostly through an employer, "but that means that 53 to 59 percent were without health-care coverage of any kind," said KCEP.

The most common reasons enrollees gave for not paying premiums were that couldn't afford it, they were confused about the payment process, or didn't know they were required to make a payment.

The report also looked at access to care and found that people who were kicked off coverage or never enrolled were less likely to make appointments for care or fill a prescription in the previous six months.

Kentucky's plan is expected to save $2.2 billion over the next five years, of which the state's portion would be $331 million, according to the state's waiver request. It estimates that after five years, the state's Medicaid rolls would have 86,000 fewer people than an unchanged program would have. About 30,000 people a month go on and off Medicaid in Kentucky as their circumstances and incomes change.

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