Pressure to expand Medicaid mounts, employer plans decline

Based on a partnership with Urology Times, articles from the American Association of Clinical Urologists (AACU) provide updates on legislative processes and issues affecting urologists. We welcome your comments and suggestions. Contact the AACU government affairs office at 847-517-1050 or info@aacuweb.org for more information.

When provisions of the Affordable Care Act (ACA) related to the expansion of Medicaid to low-income childless adults took effect in January 2014, 25 states and the District of Columbia had approved laws to broaden their programs' eligibility requirements. Since then, under pressure from various interests groups, including state hospital associations, lawmakers in at least three more states-Iowa, Michigan, and Pennsylvania-expanded their health care safety net programs and thereby gained access to federal dollars that would have otherwise been left on the table.

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Utah Governor Gary Herbert, eyeing those federal funds but unwilling to expand Medicaid eligibility, recently announced a deal with the U.S. Department of Health and Human Services (HHS) that would enroll about 110,000 low-income people in private health insurance plans using ACA dollars. This kind of arrangement has gained traction in recent months, with Arkansas, Iowa, Michigan, and Pennsylvania leading the way in the pursuit of a so-called “private option.” (See “State Medicaid programs: Map of expansion by state” from Deloitte Center for Health Solutions, August 2014.)

Indiana and Wyoming have engaged in similar discussions with the federal government, thereby establishing a sense that Medicaid expansion, whether along the terms envisioned by the ACA or HHS-approved alternatives, is inevitable. Unfortunately, from an administrative and payer-contracting perspective, these alternative programs further blur the line between Medicaid and private insurance sold on ACA exchanges (aka marketplaces). What's more, these programs that straddle both worlds are being introduced as millions of people shift from employer-sponsored coverage to the individual market and from private insurance onto Medicaid.

For the first half of 2014, enrollment in individual market coverage grew by almost 6.3 million individuals. During the same period, the number of Americans covered by employer-sponsored plans declined by 3.8 million and a Boston University/Harvard Medical School study found that up to 80% of new Medicaid beneficiaries had been shifted off private insurance. Nothing stops employers from canceling company plans and leaving workers to buy individual policies sold through exchanges, but the Obama Administration is taking steps to minimize their incentive to do so. The IRS recently clarified that employers may not give employees tax-free subsidies to purchase policies on the individual market. Any such support would have to be reported as income by the employee.

Health benefits consultants also report a selective dumping strategy being employed by companies that self-insure. The health of these corporations' pools can be greatly improved by shifting workers with chronic and/or expensive conditions out of the company's plan and onto the state/federal marketplace. Knowledgeable industry observers expect a worker would receive a raise that covers the purchase of the marketplace's most comprehensive plan and the company would still save tens of thousands of dollars.

With patients' insurance coverage and network status in flux, urologists must be aware of the ins and outs of their various payer contracts. The AACU website incorporates a number of resources on this subject, including a presentation made at the recent state advocacy conference by AMA Senior Attorney Wes Cleveland, JD, who directed attendees' attention to important provisions and protections in a "model contract." That website is updated every day with news and information relevant to urologists. Your feedback and recommendations are always welcome.

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