Medicaid expansion enrollment: Providers asked to lend a hand

In 25 states, qualifying for and enrolling in Medicaid has now become much easier thanks to health care reform, specifically the Medicaid expansion. To be eligible, an individual’s income must not exceed 133 percent of the federal poverty level (FPL), or $15,282 annually.  Historically, Medicaid enrollees also had to pass an asset test – but this is no longer true for states that have adopted the Medicaid expansion. In those states, enrollment began on October 1 and will extend through March of 2014. But those who enroll early will be able to realize benefits as soon as January 1, 2014.

In states that have adopted the Medicaid expansion, qualification rules have also changed for those people who have serious mental illnesses. In the past, most people with serious mental illnesses qualified for Medicaid because they were considered to have a disability, explains Chuck Ingoglia, senior vice president for public policy of the National Council for Behavioral Health. But in Medicaid expansion states, they now need to qualify based on income. The change to income-based qualification is important for two other groups as well:  those with addiction disorders (unlike mental illness, addiction disorders aren't considered disabilities) and adults without dependent children, generally single men, who have been largely excluded from Medicaid coverage for decades. 

In all, the prospect of Medicaid Expansion means a huge increase in coverage for the most vulnerable people with behavioral health disorders, and Ingoglia and others are urging providers to help them obtain needed coverage. “Most behavioral healthcare organizations have always had a strong incentive to get people enrolled in Medicaid,” Ingoglia tells Behavioral Healthcare. He says that while you can expect many more patients, if you expect to be reimbursed, you may well need to help them get enrolled.  

At present, Medicaid is the second largest payer for serious mental illness among community behavioral health organizations. However, it is about become the first, predicts Ingoglia. According to a 2011 survey conducted by the National Council and the National Association of Addiction Treatment Providers — the most recent payment source information available — state and local funds for indigent care currently pay the largest share (43 percent), followed by Medicaid (37 percent), private health insurance (6 percent), self-pay (6 percent), Medicare (4 percent), and philanthropy (4 percent). These numbers are going to change in states that expand Medicaid, says Ingoglia. “Indigent care costs will go down, and Medicaid will go up,” he said.

Ingoglia doesn’t think that many people with serious mental illnesses will be buying insurance in the marketplaces – which are for people whose incomes range from 138 to 400 percent of FPL ($45,960 for an individual) – because many of those with mental illnesses tend to be poor.

“It’s very important to talk about the ACA enrollment initiative,” says Ron Manderscheid, Ph.D., executive director of the National Association of County Behavioral Health and Developmental Disability Directors. “We don’t think there’s sufficient information out there,” said Manderscheid, who is also co-chair of the Coalition for Whole Health.

Smart compromises

Manderscheid has kept close watch on how different states have been approaching Medicaid expansion. In general, those states with Republican governors have opposed it – as well as the marketplaces, or exchanges. While the federal government has set up marketplaces that give subsidies to people below 400 percent of FPL, nobody is expanding Medicaid in states that refuse to do so, and the Supreme Court gave states that right.

But some states, such as Iowa, are looking at a compromise that would allow a limited expansion of Medicaid to 133 percent of FPL, only for the medically needy. “I really like what they worked out in Iowa, because they were able to compromise,” Manderscheid tells Behavioral Healthcare. “They were able to link Medicaid to private insurance in a viable way,” he said.

The compromise would allow everyone from 100 percent to 133 percent of FPL – a group that would otherwise fall under Medicaid expansion – to choose a qualified health plans from the insurance marketplace and receive a subsidy. “If you have good health, there’s no reason not to do that,” says Manderscheid.

Then, the state is going to set up a mechanism to determine those who are medically needy and enable them to stay in Medicaid, which, as a safety net program, has a better benefit than marketplace plans. Thus, instead of a single dividing line between Medicaid and the insurance marketplaces at 133 percent of FPL, the Iowa plan divides up the group between 100 and 133 percent and enables those who need more help to receive it, says Manderscheid.  

Tennessee is moving toward a similar compromise, says Manderscheid. “Those whose incomes fall between 100 to 133 percent of FPL are to enroll in health insurance through a qualified plan, but if they are assessed to be medically needy, they are immediately moved to traditional Medicaid,” he says.

By placing the medically needy into Medicaid, these compromise plans shift more reimbursement to Medicaid, which doesn’t have a cap and is paid primarily by the federal government in partnership with each state. The arrangement means that the medically needy “won’t the face the problems of being in a plan that has inadequate benefits,” says Manderscheid. “Anyone with a serious mental illness, a developmental disability, or an addiction will get sorted into traditional Medicaid.”

The bottom line: For those with low incomes, or those with serious health – or behavioral health – conditions, Medicaid is probably a better financial alternative than one of the marketplace insurance plans.  But, outside of Tennessee and Iowa, the only sorting mechanism for Medicaid expansion states is the 133 percent of FPL income test. If you’re below it, you go to Medicaid – if your state has elected Medicaid expansion. If you’re above 138% of FPL (the law allows 133% + 5%) then you’ll be obligated to purchase health insurance on your state’s exchange, with the help of an income-based subsidy for those whose incomes are 400 percent or less of FPL.