Summary of CMS’ FAQs on the Exchange and Medicaid Expansion
|December 13, 2012||Posted by Lucien Wulsin under Federal, Legislation/Policy, State||
- There will be no further extensions of the deadlines for states to decide whether to operate an Exchange.
- State Exchanges must be financially self-sustaining by January 1, 2015.
- States will not be assessed a fee for using federal data services.
- Deadline to operate a Partnership Exchange between the state and federal governments is February 15, 2013.
- If a state opts for a Federally-Facilitated Exchange, the federal government will seek to harmonize with the state Medicaid and CHIP eligibility rules, as well as the state licensure and solvency requirements for health plans.
- Federal Exchange personnel will be trained on state policies.
- Federal Exchanges will not supplant, but rather supplement, state regulators.
- Federal Exchanges will be funded by a fee of 3.5% of premiums.
- HHS will reimburse state costs of data and information transfers with the federal Exchange.
- Competition will be enhanced in Federal Exchanges principally through transparency and comparisons of price and quality information. Multi-state plans and co-ops may add to the competitive mix.
- Proposed federal rules on essential health benefits, actuarial values and underwriting reforms, such as rating and guaranteed issue, were issued on November 20 and comments are due by December 26.
- The base benchmark plans for the 10 essential health benefits may need to be supplemented in some states; the guidance for how to supplement is in proposed §156.100.
- For the most part, multi-state plans will be subject to state insurance laws, and therefore operating on a level playing field in each state.
- State Exchanges can contract with Medicaid bridge plans to assure plan/provider continuity as individuals’ eligibility shifts between Medicaid and the Exchange. The Exchange must assure that the bridge plans meet the standards in §2702 of the Public Health Act. This is a particularly important option for local Medi-Cal managed care plans.
- The Pre-Existing Condition Insurance Program (PCIP) expires on 1/1/14 and enrollees will transition into the individual market. Transitional reinsurance will be available to those plans enrolling high-risk PCIP subscribers.
- HHS will issue guidance on Basic Health Plans in the future (date unspecified).
- State input into the federal outreach and education efforts for the Exchanges and other coverage expansions is welcomed.
- States cannot require Navigators to hold a producer’s license (i.e. agent or broker’s license). Navigators must complete a state (or federal, for Federally-Facilitated Exchanges) training program and pass a certification exam. Exchanges must include two types of entities as Navigators, and at least one must be a community non-profit group. See 45 CFR 155.210
- Exchanges must also include in-person consumer assistance in addition to Navigators. See 45 CFR §155.205(d)
- HHS is developing the single streamlined application for Medicaid, CHIP (Healthy Families) and the Exchange, which it expects to release in early 2013. See 77 Federal Register 40061-63 (July 6, 2012) for the request for comments. States can create their own single streamlined application and submit for HHS approval.
- Individuals who are determined ineligible for tax credits through the Exchange or for Medicaid and CHIP will be notified of their rights to appeal and their right to participate in the Exchange without premium subsidies.
- Hardship and any other exemptions from “shared responsibility” can be handled by either the State Exchange or the federal government at state option.
- Exchanges must display all available plans on their web sites, including stand-alone dental plans.
- States can adopt or terminate their Medicaid expansions at any time with a state plan amendment. The federal match is tied to the years specified in the statute – i.e. 100% in calendar years 2014-16, slowly phasing down to 90% in 2020. In other words, the incentive is to start on time on January 1, 2014.
- A state that begins the expanded Medicaid coverage can discontinue at any time.
- In order to receive the 100% federal matching rate, a state must expand eligibility to 133% of FPL. However a state seeking to expand to, for example, 75% of FPL could receive its regular federal match, in California that is a 50/50 match. States will have flexibility on benefits (the benchmark plan), comparability of services (new eligibility categories can receive a different set of benefits) and on cost sharing (to be proposed). In 2017, states can apply for global state innovation waivers under the ACA and §1115 for state innovations in coverage and financing.
- HHS is no longer proposing a blended rate, which would have merged the new and old matching rates, because of the importance of giving the 100% incentives to states to expand their Medicaid programs consistent with the ACA. In other words, the Supreme Court’s decision to make state Medicaid expansions optional mitigates against a blended match.
- In states which choose not to expand their Medicaid programs, Exchanges will determine eligibility for Exchange and Medicaid eligibles. In practical terms, this means that in such a state (e.g. Texas with Medicaid eligibility at 25% of FPL) if an individual’s eligibility is 101% of FPL, they will be Exchange eligible; however if their income is 99% of FPL, they will be Exchange ineligible, and also ineligible for that state’s Medicaid program. Effectively, there will be an eligibility donut hole between a state’s Medicaid income threshold and 100% of FPL that will be quite large in many states. In that donut hole are both families and individuals who would otherwise be eligible if the state had chosen to expand its Medicaid program with 100% federal matching.
- States which expand will receive 90% FFP on their new and improved eligibility systems. The eligibility process will be simplified and streamlined for most eligibles also reducing state administrative costs. The HUBs and other electronic eligibility verification systems will also reduce state reduce state expenditures. The Exchanges can also, at state option, determine Medicaid eligibility at no cost to the state’s Medicaid program.
- The 90/10 match for eligibility system upgrades continues through December 15, 2015 and thereafter, the match is 75/25.
- In states that do not expand their Medicaid programs, individuals with incomes over 100% of FPL will be Exchange eligible, while individuals with incomes lower than 100% of FPL will be Exchange ineligible.
- Expansion states (i.e. those who expanded coverage before the ACA like Massachusetts, Vermont, New York, Delaware and Maine) will receive the more favorable federal match on the expansion categories.
- CMS will work with states on increased authority for states to adopt payment and delivery system reforms to incentivize lower cost, higher quality care with better outcomes. See Medicaid.gov. CMS will also develop increased cost-sharing flexibility for states for families/individuals with incomes over 100% of FPL.
- CMS will work with the states to develop benefit designs with personal responsibility to promote healthy behaviors.
- CMS will work with states on global waivers with state flexibility and accountability to achieve the goals of the ACA.
- States must convert to MAGI income determinations effective January 1, 2014. The disabled and elderly eligibility categories are exempt.
- HHS is assessing how to allocate the shrinking DSH allotment among the states with consideration for the respective shares of remaining uninsured.
- States can use “premium assistance” to assure that parents and children are in the same plans. See 1905(a) and 2105 (c)(3) of the Social Security Act. There are “wrap around”, cost effectiveness and cost sharing requirements associated with the use of premium assistance. Either the state Medicaid agency or the Exchange can administer the Medicaid/CHIP premium assistance to assure families are all in the same plan.
- States can also use premium assistance to assure continuity of coverage as families and individuals transition between Medicaid and the Exchange and vice versa.
The full report is available for download:
Summary of CMS\' FAQs on the Exchanges and Medicaid Expansion.pdf