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Medicaid Reform Update: Benchmark Plans One Year Later

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Presented at the National Academy for State Health Policy's 20th Annual State Health Policy Conference in Denver, Colorado. Author: Judy Solomon

Presented at the National Academy for State Health Policy's 20th Annual State Health Policy Conference in Denver, Colorado. Author: Judy Solomon

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Medicaid Reform Update: Benchmark Plans One Year Later Presentation Transcript

  • 1. Medicaid Reform Update: Benchmark Plans One Year Later National Academy for State Health Policy October 15, 2007 Judith Solomon, Senior Fellow
  • 2. DRA Benefits Flexibility: Why? • Provide states with flexibility to tailor benefit packages to meet the needs of different groups – Otherwise need waiver of comparability and statewideness requirements • Save money – CBO expected $1.3 billion in savings over 5 years and $6 billion over 10 years • Make Medicaid look more like private coverage – Same benchmark benefit packages as SCHIP – CBO predicted most states would use state employee plans as benchmarks
  • 3. Benefits Flexibility: What Passed? • Limited to children and parents – Seniors, people with disabilities and some children exempt • Limited to “eligibility categories” covered by state at time of enactment • EPSDT must be guaranteed through wraparound coverage
  • 4. CMS Guidance • Expanded ability of states to provide benchmark benefits to exempt groups on a voluntary basis – Exempt groups could opt-in to benchmark benefits on a voluntary basis and opt-out at any time – Raised concerns as to whether “opting in” truly voluntary • Broad definition of “Secretary-approved coverage” – “Any other health benefits coverage that the Secretary determines. . .provides appropriate coverage for the population proposed. . .”
  • 5. Benefits Flexibility So Far: 7 State Plans • Two Groups of States – “Waiver States” o ID, KY, WV, SC are using benefits flexibility as substitute for waivers that the states were planning when DRA enacted – “New Benefits States” o KS, VA, WA are using benefits flexibility to target additional benefits to people with disabilities and chronic conditions • All but one state (SC) is using Secretary- approved Coverage
  • 6. West Virginia • Covers children and parents • Basic and enhanced benefits packages for each • Enhanced benefits contingent on signing member agreement with health goals • Goal of improving health by increasing preventive services and provider engagement – But only 15 percent take-up on enhanced benefits • Serious concerns among advocates – Access to mental health services – Impact on EPSDT
  • 7. Kentucky • 4 plans cover all beneficiaries (opt-in exempt groups) – Most beneficiaries in Global Choices (“regular Medicaid”) – Family Choices – children – Optimum and Comprehensive Choices – long-term care coverage • Disease management for certain populations • “Soft” limits on services for children – Confusion on limits has exposed broader confusion among providers and beneficiaries re EPSDT and covered services
  • 8. South Carolina • State moved from broad waiver proposal to small pilots – Health Opportunity Account – HSA Benchmark Benefits • 500 participants for each pilot on a voluntary basis in one county • Waiver proposal had opposition from NAACP and other groups
  • 9. Virginia and Washington • Providing disease management programs for certain conditions (e.g. diabetes, asthma) on a voluntary basis • Unforeseen use of DRA benchmark benefits to direct additional benefits to groups based on diagnosis
  • 10. DRA Benchmark Benefits: What’s Next? • Expansion States – Expand coverage for parents and/or children – Provide higher-income beneficiaries with benchmark benefit package through health insurance pool or other mechanism for expanding coverage – Avoids budget neutrality that would be needed through waivers • Changes in SCHIP Reauthorization? – Both House and Senate bills clarify EPSDT requirements for benchmark benefits – House bill limits benchmark benefits to most popular state employee plan for families and requires that Secretary-approved coverage be at least equivalent to other benchmarks
  • 11. DRA Benchmark Benefits: Improving the Process • Process of adopting State plan amendments varies by state as to advocacy, input and legislative involvement • CMS leaves it to the states – But see GAO report on federal process for waivers • No evaluation requirement
  • 12. Concluding Observations • Impact of tailoring benefits not yet clear – Does it save money or improve health outcomes? – Low take-up in WV is of concern • Several surprises – CMS guidance allowing exempt groups in – Use of provision to expand benefits to exempt groups – Potential use in state expansions • Not likely will end up saving federal dollars