With Federal Support, States Hold Steady in Medicaid and CHIP Coverage Policies for Low-Income Children and Families Despite Recession

/PRNewswire/ -- Despite tight budgets, nearly all states maintained or made targeted expansions or improvements in their Medicaid and Children's Health Insurance Programs (CHIP) eligibility and enrollment rules in 2010, preserving the programs' ability to provide coverage to millions of low-income Americans who otherwise lack affordable options, according to a new survey released today by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured (KCMU).

The 10th annual KCMU 50-state survey of Medicaid and CHIP eligibility rules, enrollment and renewal procedures and cost sharing practices, this year conducted with the Georgetown University Center for Children and Families, found that coverage policies held steady or in some cases expanded, particularly for low-income children. However, eligibility for their parents and other low-income adults continued to lag behind. The stability of such programs during a recession that has produced sharp increases in unemployment and declines in state tax revenues arises in large part from the temporary federal fiscal relief for Medicaid provided by the American Recovery and Reinvestment Act of 2009 (ARRA).

That enhanced federal assistance, which will end in July, was tied to requirements for states to maintain Medicaid coverage policies. To help provide a base for the future Medicaid expansion, the health reform law also requires states to maintain public coverage for adults until broader health reform goes into effect in 2014 and until 2019 for children. However, in the coming year states continue to face significant budget pressures as demand for the programs remains high and state revenues continue to be depressed amidst the slow economic recovery.

"Millions of American families have turned to Medicaid and CHIP as incomes have declined after losing jobs and the health insurance that often goes with them," said Diane Rowland, Executive Vice President of the Foundation and Executive Director of the KCMU. "Keeping these programs stable and strong has helped protect children and avoid an even larger increase in the nation's 50 million uninsured, and will be key to ensuring the success of health reform implementation over the next few years."

Coverage Policies Held Steady or Expanded in 2010, Especially For Children

The survey found that 49 states, including D.C., held steady or made targeted improvements in their Medicaid and CHIP eligibility rules and enrollment procedures. A total of 13 states expanded eligibility, largely for children, and 14 states made improvements in enrollment and renewal procedures to reduce burdens on families and streamline administrative processes.

Without the enhanced federal funding and maintenance-of-effort requirements in the ARRA and health reform laws, it is likely that more states would have made cutbacks in coverage to cope with budget pressures. Two states -- Arizona and New Jersey -- did make reductions that were not subject to the requirements in the laws.

Coverage for Low-Income Adults Continues to Lag Behind

The survey finds that as of January 1, 2011, 25 states, including D.C., cover children in families with incomes at least up to 250 percent of the federal poverty level ($45,775 for a family of three in 2010), continuing a decade of progress in covering children. However, coverage for their parents lags behind. The median Medicaid eligibility threshold for parents nationally remains at 64 percent of the federal poverty level, and 16 states limit eligibility for parents to those in families that earn below 50 percent of the federal poverty level ($9,155 for a family of three in 2010).

Until health reform passed, states could not cover adults without dependent children in Medicaid programs without a waiver. The new law ends the historic exclusion of these adults through a Medicaid eligibility expansion to a national floor of 133 percent of the federal poverty level ($24,352 for a family of three and $14,404 for an individual in 2010). Although the law won't take full effect until 2014, last year Connecticut and D.C. took advantage of the new option to begin covering these adults by moving into Medicaid low-income adults whom they had previously covered only with state and local dollars. Also, California received approval for a waiver to continue and expand county initiatives that cover low-income adults. A few other states, including Minnesota, also have pending plans to take advantage of the new option to provide Medicaid coverage to adults. Even with these efforts, as of January 1, only seven states (Arizona, Connecticut, Delaware, D.C., Hawaii, New York and Vermont) provided Medicaid or Medicaid-equivalent benefits to adults without dependent children.

In the absence of further expansions over the next couple of years, most uninsured, low-income adults will remain unable to qualify for Medicaid until health reform goes into effect in 2014.

States are Incorporating Technology into Their Programs, but Have More Work Ahead

The survey finds that states continue to adopt technology to modernize their programs. Many of these improvements have helped to reduce barriers to enrollment and renewal for families, while also streamlining administrative processes and achieving administrative efficiencies. For example, about half of the states (29) took advantage of a new option to rely on an electronic data match with the Social Security Administration to more efficiently and accurately verify citizenship status of applicants for Medicaid and CHIP. The survey also found states making progress in using electronic data matches to verify other aspects of eligibility.

Yet states still have a significant amount of work to do, the survey finds. The new health reform law calls upon states to implement an integrated, web-based, technology-driven enrollment process for Medicaid, CHIP, and coverage in the new health insurance Exchanges. While all states make their Medicaid application available online, only slightly more than half (29) allow for the application to be electronically submitted with an electronic signature and most of these still require families to submit paper documentation via mail or fax. In light of a rule proposed by the Administration at the end of 2010 to provide states with a 90% federal matching rate to prepare their Medicaid eligibility systems for health reform, new grant funding, and the likelihood of additional guidance and funding opportunities in the months ahead, more activity in this area is expected in the coming year.

Today's report, Holding Steady, Looking Ahead: Annual Findings of a 50-State Survey of Eligibility Rules, Enrollment and Renewal Procedures, and Cost-Sharing Practices in Medicaid and CHIP, 2010-2011, and related materials from today's public briefing on the survey findings, are available online at: http://www.kff.org/medicaid/Medicaid-CHIP-Coverage-Recession-Health-Reform.cfm. In addition, an archived webcast of a public briefing will be available on the website after 4 p.m. ET today.

The Kaiser Family Foundation is a non-profit private operating foundation, based in Menlo Park, California, dedicated to producing and communicating the best possible information and analysis on health issues.

The Kaiser Commission on Medicaid and the Uninsured provides information and analysis on health care coverage and access for the low-income population, with a special focus on Medicaid's role and coverage of the uninsured. Begun in 1991 and based in the Kaiser Family Foundation's Washington, D.C. office, the Commission is the largest operating program of the Foundation. The Commission's work is conducted by Foundation staff under the guidance of a bipartisan group of national leaders and experts in health care and public policy.

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Secretary Sebelius Announces $51 Million in Affordable Care Act Grants to Innovate, Improve and Enhance Health Insurance Premium Rate Review

New grant program providing $250 million to states over next five years will strengthen oversight of insurance premiums and rate hikes

HHS Secretary Kathleen Sebelius today (June 7) announced the availability of $51 million in Health Insurance Premium Review Grants through the Affordable Care Act. These funds are the first round of grants available to states through a new $250 million grant program to create and strengthen insurance rate review processes.

"This is an important step in putting consumers back in control of their health care," said Secretary Sebelius. "These new grants will help states protect consumers and small employers by holding insurers accountable for unreasonable insurance rate increases that have made coverage unaffordable for many American families. By strengthening oversight of insurance premiums, these grants will help put affordable coverage back within the reach for Americans who have been hit hard by skyrocketing costs."

All states and the District of Columbia are eligible for this first round of rate review grants. To receive a grant, a state must submit a plan for how it will use grant funds to develop or enhance its process of reviewing and approving, disapproving, or modifying health insurance premium requests. States with successful applications will receive a $1 million grant during the first round.

"These funds will help states strengthen their oversight capabilities and will allow states that do not currently review rates to establish a program," said Jay Angoff, Director of the Office of Consumer Information and Insurance Oversight. "By subjecting rates to new public scrutiny, the oversight of premium increases will ultimately help ensure that consumers receive substantial value for their insurance dollars."

In early May, Secretary Sebelius sent a letter to Governors and State Insurance Commissioners urging them to review the authority they have under their state laws to determine whether they have all of the regulatory tools needed to approve health insurance rates before they take effect.

Several provisions in the Affordable Care Act strengthen HHS' and states' oversight of insurance premiums and rate hikes. These include the Medical Loss Ratio, requiring insurers in the individual and small group markets to spend at least 80 percent of the premium dollar on health care, and insurers in the large group market to spend at least 85 percent of the premium dollar on health care; rate review, requiring insurers to justify unreasonable premium increases to state regulators and the Secretary of Health and Human Services; and grant funds for states to help create or strengthen reporting and review processes.

The Health Insurance Premium Review Grants that will be available during FY 2010 are only the first in a five-year grant program. HHS will take applications for a second round of state grants beginning in Fiscal Year 2011, after new regulations regarding rate review take effect. Second-round grants will allow states to further strengthen their rate review, and begin to provide the Secretary of HHS with the rate data required under the law.

This grant solicitation can be found at grants.gov.

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States Get Bonuses for Boosting Enrollment in Children's Health Coverage‏

HHS Secretary Kathleen Sebelius today announced the award of more than $72 million to nine states for making significant progress in enrolling children in health coverage through Medicaid and improving access to children's coverage through Medicaid and the state children's health insurance program.

Funding for the "performance bonuses" was included in the Children's Health Insurance Program Reauthorization (CHIPRA) law. CHIPRA also set performance goals that states must meet to qualify for a bonus.

"Today, we're happy to reward states that have taken important steps to help insure more children and made a real difference in the lives of families across the country," said Secretary Sebelius. "These awards will provide crucial support and help states continue to serve children and families."

States receiving funds today include: Alaska, Alabama, Illinois, Louisiana, Michigan, New Jersey, New Mexico, Oregon, and Washington. (See below for a complete list of state awards.) Awards vary by state according to a formula set out in CHIPRA but total $72.6 million this fiscal year.

To receive these performance bonuses, states had to meet two types of performance goals set forth in the CHIPRA statute. States had to qualify by adopting at least five of eight listed program features-like providing 12 months of continuous eligibility, using a joint application for both Medicaid and the Children's Health Insurance Program (CHIP) and streamlining eligibility renewal processes-that are known to encourage enrollment and retention of eligible children. States also had to document significant increases in Medicaid enrollment among children over the course of the year.

Performance bonuses are not the only federal incentive for states to maintain and expand their Medicaid programs. A short-term boost in Medicaid reimbursement rates authorized by the American Recovery and Reinvestment Act (ARRA) also provided relief to states with suffering economies, enabling them to extend care to eligible children.

"In the midst of the worst economic downturn since the Great Depression, decisive action in ARRA and CHIPRA, along with focused state activity, helped ensure that children got the health care they need," said Cindy Mann, director of the Center for Medicaid and State Operations within the Center for Medicare and Medicaid Services (CMS). "We are pleased to see the success these states have achieved as well as the actions to enroll eligible children taken by other states that we expect may qualify for the bonus next year."

Today's announcement closely follows the release of a study by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured which also credited ARRA and CHIPRA with enabling States to expand access to care for low-income, uninsured children. In a 50-state survey, the Commission concluded that 26 states expanded and/or simplified their Medicaid and CHIP programs in 2009. A copy of the complete report can be found at http://www.kff.org.

State award amounts today are:
Alabama $39.1 million
Alaska $789,000
Illinois $9.1 million
Louisiana $1.5 million
Michigan $3.7 million
New Jersey $4.2 million
New Mexico $5.1 million
Oregon $1.6 million
Washington $7.5 million

Total: $72.6 million

CMS today also released a letter to state health officials providing more detailed guidance on the criteria for qualifying for a bonus payment for 2009 and in future years. That letter will be available on the CMS web site at www.cms.hhs.gov/CHIPRA and also on the Insure Kids Now website at www.insurekidsnow.gov

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HHS Secretary Calls on States and Communities to Get Health Coverage to Uninsured Children

HHS Secretary Kathleen Sebelius today called on states and communities to join with HHS to redouble efforts to find and enroll the 5 million children who are currently eligible for Medicaid or the Children's Health Insurance Program (CHIP), but are not yet covered. The Secretary
issued this call to action as she opened the National Children's Health Insurance Summit in Chicago, kicking off the nation's largest campaign to find and enroll uninsured children in over a decade.

Much progress has been made in recent years, but the enactment of the Children's Health Insurance Reauthorization Act (CHIPRA) creates new opportunities to move forward. At the same time, given the economic downturn, the need among families for affordable coverage for their children could not be greater. Not since the creation of CHIP in 1997 has the federal government, in conjunction with states, concentrated so many resources on the effort to find and enroll children who are needlessly going without health insurance coverage.

"As a society and as parents, we have no greater responsibility than to provide quality health care for our children," Secretary Sebelius said. "Our charge here today is to get all eligible children covered to ensure they are healthy throughout their childhood. A healthy child is the
block upon which all other successes are built, not just for the child, but for the nation they will lead in the future."

In February, President Obama signed CHIPRA into law. The legislation fully funds CHIP over the next four years and devotes an unprecedented amount of federal funding to support outreach and enrollment efforts for both CHIP and Medicaid. Currently, Medicaid serves more than 32 million low-income American children while CHIP has over 7 million beneficiaries.

Today's speech launched the three-day conference in Chicago sponsored by the Centers for Medicare & Medicaid Services (CMS) that has brought together state Medicaid and CHIP officials, local government, community-based organizations, safety net providers and others who are working to promote enrollment in children's health programs. These experts will exchange proven strategies for finding and enrolling children in health programs as well as removing program barriers that sometimes prevent children from staying in these programs despite
continued eligibility.

Participants in the conference will also hear from experts on a wide range of specialized topics, such as reaching diverse or isolated populations, the usefulness of online applications and how to best work with managed care plans and other health care providers.

Also attending today's conference are grantees from 69 organizations across the country that were awarded $40 million by HHS to fund outreach projects in their local communities. Over the next four years, HHS will award a total of $90 million in outreach grants.

"With the nation's unemployment rate at a staggering 9.8 percent and families losing their job-related health care, finding and enrolling eligible children could never be more important," said Cindy Mann, director of the Center for Medicaid and State Operations within CMS.
"Bringing together government officials, tribal leaders, community organizations and policy experts, we hope, will build on the successes achieved in recent years and lead to fresh, innovative and successful strategies to deliver quality health care to every eligible child in
America."

For more information about free or low-cost children's health insurance, visit the newly updated and redesigned Web site www.insurekidsnow.gov or call toll-free 1-877-KIDS-NOW (1-877-543-7669). The site gives parents and caregivers information on connecting their children to health coverage through Medicaid or CHIP and also provides program
information and federal guidance for states and health policy professionals. It will be available in both English and Spanish. National Children's Health Insurance Summit presentations and other conference materials can be downloaded at www.childrenshealthinsurancesummit.com.

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