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Medicaid Expansion: A Closer Look At Vulnerable Populations And State Coverage Opportunities



September 10th, 2012
by Shannon McMahon

Since the Supreme Court’s verdict on NFIB v. Sebelius in late June, considerable national attention has converged around the question of whether or not states will opt to expand Medicaid coverage for adults with incomes below 138 percent of the federal poverty level (FPL).  The argument for states to move forward – or not – has centered largely on political and budget considerations, many of which revolve around the implications of reduced Disproportionate Share Hospital payments under the ACA. There has been relatively little public focus on the opportunity for states to use the Medicaid expansion to increase access to coverage for vulnerable populations.

With other specific ACA provisions aimed at addressing chronic disparities in health care quality and access, states would be able to capitalize on the expansion option to significantly enhance care for high-need subsets of the newly eligible population. Following are a few of the new opportunities available to states.

The Expansion Population — In Brief

Analyzing past state experiences in providing Medicaid coverage to “optional” populations offers lessons regarding the individuals who will gain eligibility for safety net coverage in 2014. The soon-to-be Medicaid eligible will — in expansion states — include some healthy adults; but they will also include many, particularly those with very low incomes (less than 50 percent of the federal poverty guideline (FPG)), who have untreated, chronic conditions such as diabetes, hypertension and mental illness, coupled with other socioeconomic challenges  that come with extreme poverty.

Prior to the NFIB v. Sebelius decision, national surveys indicated that upwards of 22 million individuals would be eligible for Medicaid in 2014.  Although enrollment projections have shifted downward to roughly 15-17 million based on states that may not take up the option — or may do so after January 2014 — there are nonetheless millions of Americans who will gain Medicaid eligibility in 2014 and will have access to coverage.

Vulnerable populations among the newly eligible include people who are homeless, many with serious and persistent mental illness; low-income veterans; and jail-involved individuals.  Each of these often overlapping groups pose unique coverage challenges for states and their care delivery partners.

Homeless Individuals

Virtually all of the estimated 1.2 million individuals in the U.S. who are homeless will be potentially eligible for Medicaid in 2014. States that have chosen in the past to expand Medicaid coverage to low-income single adults report that many of the new enrollees – particularly those who are homeless – will have significant unmet health needs and high health costs. Among the homeless, in particular, there is a high prevalence of severe and persistent mental illness.

The Medicaid expansion offers states the opportunity to better coordinate their care and services, since nearly 85 percent of care management provided in the supportive housing environment is potentially reimbursable under the Medicaid program.  The ACA’s health homes provision provides states with the opportunity for enhanced funding for Medicaid efforts that integrate physical and behavioral health and may go a long way toward ending the cycle of homelessness. States, like New York through its Medicaid Redesign Supportive Housing Plan, are deploying new ways of improving care for their homeless population, including linking supportive housing with care management opportunities for their health home eligible beneficiaries.

Veterans

Based on data from the 2010 American Community Survey, there are more than 12 million veterans under age 65 living in the United States, of which 1.3 million are uninsured. Roughly half of these uninsured veterans (632,000) report family income below 138 percent FPL, making them potentially eligible for Medicaid in 2014. Yet by virtue of their new Medicaid eligibility, these veterans may also be eligible for free or low-cost health care from the Department of Veterans Affairs (VA).  Eligibility for VA health care is based on a combination of factors, including income, disability, and period of service.  These criteria are used to classify veterans into eight priority groups used to match enrollment to available resources in the VA.

If a veteran qualifies for Medicaid or has a gross annual household income less than the VA national income threshold ($30,460 with no dependents in 2012, or approximately 270 percent FPL), her or she is eligible for health care with no co-pays for inpatient or outpatient care, and low co-pays for outpatient medication or extended care. There are no premiums for veterans’ health care. This means that low-income veterans may choose to enroll in either VA health care or Medicaid, or both.

Based on documented access challenges in VA care, eligibility for Medicaid benefits provides an opportunity for increased access to care for veterans.  As states review the Medicaid expansion opportunity, they may consider using data tools to help identify veterans and inform them of the VA benefits available to them. Alternatively, states might include a question on applicant eligibility forms that asks about service in the U.S. military, rather than relying solely on reports of alternate income that list the VA as a source. States can then help veterans and their families identify the most relevant coverage options for themselves and their families.

Criminal Justice Population

The newly eligible Medicaid population will likely include many low-income childless adults who have been involved with the criminal justice system. National data suggest that a portion of the expansion population mirrors the profile of individuals with criminal justice involvement: the uninsured are more likely to be male, unemployed, under-educated, and from minority groups.  Adults involved in the criminal justice system typically have greater health needs, including a high prevalence of chronic physical health needs; substantial behavioral health and substance abuse needs; and at the most extreme, greater likelihood of severe and persistent mental illness.

Through the ACA, states have new opportunities to partner with managed care and local governments to deliver coordinated, uninterrupted care to this vulnerable population.   States and corrections departments can work together to design and implement administrative procedures to keep jail-involved individuals connected to seamless Medicaid coverage.  In particular, states can design new information technology solutions to suspend Medicaid eligibility at entry into the criminal justice system and reinstate eligibility at discharge. Federal matching dollars can be claimed for the administrative costs associated with suspension, as well as for eligibility determinations for individuals re-filing during or newly filing after their stays in public institutions.

Why Some States Are Moving Forward

CMS is giving states an open door to determine how and when to pursue the expansion option. Given this flexibility and the opportunity to leverage federal matching funding to improve care for people with complex needs, it makes sense for states to carefully consider the provider, fiscal, and programmatic impact of expanding Medicaid.

National data strongly indicate that there are individuals in the expansion population who have extremely complex needs and lack access to needed health services. Recent studies looking at Oregon’s early expansion efforts as well as three states — New York, Maine, and Arizona — that substantially expanded adult Medicaid eligibility point to improved coverage, access to care, and self-reported health, and also reduced mortality.  States should take their time and do the necessary analysis, but explore these new opportunities to vastly improve the health and quality of life for Americans with complex and chronic needs.

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1 Trackback for “Medicaid Expansion: A Closer Look At Vulnerable Populations And State Coverage Opportunities”

  1. MEDICAID EXPANSION AND INCREASE ACCESS TO HEALTH COVERAGE | OneWorld Progressive Institute, Inc. Blog
    September 13th, 2012 at 2:34 pm

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