January 31, 2013
Area(s) of Interest: Health Care Reform
Since the passage of the Patient Protection and Affordable Care Act (ACA), one population of consumers has received a considerable amount of attention, both from federal sources responsible for crafting the law and state-based entities responsible for implementing it – that is the population below 200 percent of the federal poverty level (FPL) ($38,180 for a family of three; $22,340 for an individual), half of which is anticipated to transition coverage status in any given year.
These eligibility changes and consequent coverage transitions are known as “patient churn,” a scenario that is anticipated to occur more frequently as consumers move from the exchange marketplace to Medi-Cal and vice versa depending on their earnings at any given time.
The working poor, specifically individuals between 139 and 200 percent of FPL (between $25,390 and $38,180 for a family of three; $15,415 and $22,340 for an individual), whose income disqualifies them from the impending Medi-Cal expansion but is still low enough to warrant a considerable subsidy to purchase coverage, are perhaps the ones who stand to benefit the most from the successful implementation of the ACA.
Now, California’s exchange – Covered California – is struggling to find a way to best serve this churning population.
Covered California recognizes that, if potential changes in eligibility are not well managed for this group, they could be forced to deal with disruptions in care and coverage that run contrary to the driving logic behind federal health care reform.
During the last legislative session, members of the state legislature attempted to address the issue by introducing a “basic health plan” (BHP) bill. The BHP would be a separate coverage program for those below 200 percent FPL, aiming to provide more affordable premiums and cost-sharing for this population. While the effort was ultimately unsuccessful, it’s seen by many as a virtual certainty that the issue will resurface during the coming special session dedicated to ACA implementation.
In the meantime, however, Covered California looks to be taking its own crack at addressing the challenges posed by this population.
The proposed solution, known as the “Bridge Plan,” would allow Covered California to negotiate QHP contracts with qualified Medi-Cal Managed Care Plans to serve as a “bridge” for those patients needing to transition between Medi-Cal coverage and Covered California. As proposed, these managed care bridge plans are believed to be able to offer very low out-of-pocket premiums for enrollees transitioning into or those enrollees at-risk of transitioning out of Covered California.
As proposed last year, these bridge plans would be available only to consumers earning between 138 percent and 200 percent of the federal poverty level, which creates potential conflicts with ACA requirements that Covered California must address.
Among other problematic requirements, under the ACA, all plans offered through state-based exchanges must be available to all consumers participating in the new marketplace, meaning that limiting the bridge plan to only low-income consumers would require a federal waiver that Covered California staff would be responsible for securing.
Earlier this month, Covered California staff brought forward three recommendations to its Board of Directors aimed at moving the action forward.
The first recommendation would make bridge plans available to consumers who had been or who had dependents covered by Medi-Cal within the previous 180 days – a proposal that has reportedly been blessed by federal regulators as approvable. This recommendation was approved by the Covered California board.
The second recommendation, however, did not fare as well. It would have endorsed Covered California’s pursuit to make bridge plans available to consumers between 138 and 200 percent of poverty.
Covered California Director Peter Lee stated that such an endorsement from the board would be necessary to make a strong case to federal regulators for the waivers necessary to implement the broader Bridge Plan. The Covered California Board, however, particularly Kim Belshe and Susan Kennedy, was not willing to give its approval, stating that too many unknowns remained and that the potential unintended consequences were significant.
The differing views between board members and Covered California staff represent one of the few, and perhaps only, times that the board has not adopted a staff recommendation.
Additionally, Gov. Jerry Brown’s proclamation of a special session appears to suggest that the administration would prefer a “Bridge Plan” solution to providing coverage to this low-income population, as opposed to the previously seen Basic Health Plan model. In his proclamation, Gov. Brown noted that one area that could be addressed within the special session was an option “that allow low-cost health coverage to be provided to individuals who have income up to 200 percent of the federal poverty level within the California Health Benefit Exchange, to the extent allowed by federal law or regulations.”
The inclusion of the phrase “within the California Health Benefit Exchange” appears to rule out the possibility of a Basic Health Plan, in lieu of the Bridge Plan alternative.
Given these developments, it appears as though the Bridge Plan will be a topic to watch for in the coming weeks and months and will require state legislation to implement.