American Health Care Act, Title 1, Subtitle B – Medicaid Program Enhancement (Proposed Bill)

Let me first just say… wow. Subtitle B was a lot to take in. In case you have been living under a rock, I imagine you won’t be shocked to hear that the changes do not favor Medicaid expansion at all. Just in case you don’t know exactly how it was expanded, all people who earn an income of 138% (or less) of the poverty level are included now instead of just low-income persons who are seniors, children, pregnant women, and those with certain disabilities. Basically, if the poverty level were $100, you could make $138 and still qualify for Medicaid.

Sec 111: Right out of the gate, hospitals who elect to be qualified to determine medical assistance eligibility (so that patients can be treated during a time that it is assumed they will be formally approved) will not be able to do so beginning January 1, 2020 and any hospitals who have already made this election will no longer be qualified.

The income eligibility limits of 133% of poverty level for children between 6 and 19 will end on December 31, 2019.

The 6% funding increase for home and community based services and support will end January 1, 2020. As a caregiver myself, I find this funding cut hard to swallow. In the event that I were not able to care for my husband, at any age, I would be particularly worried about how much care he would actually be able to receive. A friend of mine recently experienced this very situation. She was torn between working to support their family and staying at home to care for him. Everyday presented a new problem, a new requirement, a new task for her to complete. My heart goes out to her and all of those who care for a loved one while working outside the home. Suddenly, that “rock and a hard place” we always hear about seems very real.

States can currently elect to grant “presumptive eligibility”for Medicaid for pregnant women and children based on income. This period will no longer be allowed beginning January 1, 2020.

Section 112: Repeal of Medicaid Expansion (go ahead… tell me you didn’t see this coming…)

The first change puts into legislation what the Supreme Court has already decided: that States can decide whether or not they want to join the Medicaid expansion plan.

Next, the percentage of funds given to the States, for the cost of medical assistance for people newly eligible under the expansion, will be equal to previously stated amounts. The percentage is 95% in 2017. Fun fact: the word “such” is used 9 times in this amendment. NINE! It really was unnecessary.

The expansion clause which allows for non-pregnant, childless adults to be enrolled for medical assistant will end January 1, 2020. However, anyone who falls into that category before that date will continue to be covered unless they have a break in eligibility for more than one month.

Federal medical assistance is capped at 80% this year and beyond (instead of increasing to 100% by 2019).

The clause which established the Essential Health Benefits requirements for government sponsored health care and HMOs will no longer be in effect after December 31, 2019. The listed essential benefits are:

  1. Ambulatory patient services
  2. Emergency services
  3. Hospitalization
  4. Maternity/Newborn care
  5. Mental Health / Substance Abuse / Behavioral Health care
  6. Prescription Drugs
  7. Rehabilitative services and devices
  8. Lab services
  9. Prevention / Wellness Services / Chronic Disease Management
  10. Pediatric Services (including oral / vision care)

Wow. I don’t really know if there is anything left! It will truly become a “you get what you pay for” health care marker. Perhaps that will be a good thing for some but I can already see disaster strike when someone purchases health benefits a la carte, thinking that they will not need long-term prescription benefits, etc. Yes, we are supposed to “adult” these days but take a second to think about some of your loved ones. I am pretty sure you can think of at least a couple of them who aren’t so consistent with adulting…

Section 113: Elimination of DSH Cuts

There are hospitals who provide care for a disproportionate amount of low income families and they are referred to as Disproportionate Share Hospitals (DSH). A reduction in the amount of money they receive from medical assistance was already scheduled to be reduced during this fiscal year. This reduction will now end in fiscal year 2018 instead of 2024. Note: The proposed bill strikes through “2025” in the Social Security Act but after quadruple checking, “2024” is really the fiscal year specified. Seriously… if someone find where this clause currently reads “2025,” you will get a gold star for the day! lol

A subparagraph is also added that says when a State does not have Medicaid expansion for a fiscal year, the reduction in DSH allotments will not apply to that State for that fiscal year. And then the next subparagraph added pretty much just says that if the previous subparagraph doesn’t apply to you, your reduction for that fiscal year stands. I thought that last part was pretty pointless. After the reduction period, the DSH allotments will go back to being determined by the previous year’s allotment and the percentage changes in the consumer price index. Basically, it will apply to fiscal year 2019 only.

Section 114: Reducing State Medicaid Costs

I think this next bit will be supported by pretty much everyone! If someone receives Medicaid because of income level, and they win big (lottery, sweeps, etc), that money will be counted as income but will affect their eligibility a little different depending on the circumstances. A lump sum payment of less than $80k will affect their eligibility for Medicaid for the month it is received only. An $80k to less than $90k will prevent eligibility for 2 months. $90k to less than $100k will make them ineligible for 3 months. Add an additional month to that for every $10k increase in the lump sum. The max ineligibility will before 120 months. Winnings that are paid in equal installments will be counted as income every month that they are received. My question is… how is this not already a thing! Shouldn’t have this been identified as an issue by now? Sure, most Americans will not be winning the lottery this year – or ever- but with as much nitpicking as we see in legislation, one would think this would have already been taken care of.

There are “hardship exemptions” for people who exceed the income limits but the standards for approving the exemption may vary by State.

Next, there is an addition requiring notification of loss of eligibility and that it be made before the date that the individual loses coverage. The notification must specify the date coverage will end and when they can reapply. Again… I feel like this should already be mandated and it’s really a no-brainer. I’m pretty sure Dear Abby would explain this is really just good manners and not very difficult.

The bill also reminds us that none of these provisions should be taken to mean that a State cannot intercept State lottery winnings to recoup and money paid for that individuals medical assistance. Also, the winnings will be counted as income only for the individual in the household who won and their spouse if they have one.

Under current health care laws, medical assistance coverage can be granted for up to three months prior to the application. So if Johnny applies for coverage and he broke his leg a month ago, medical assistance could pay for the care he received even though he hadn’t applied yet. It is proposed that this retroactive eligibility be canned and all effective dates of coverage be on the date of application or after. This change would take effect October 1, 2017. I can certainly see the idea behind removing this practice. A lot of medical care can happen in three months and I imagine  that it is more difficult to process claims the longer it has been since the service occurred. However, the need for prolonged, intense medical care can interrupt a person’s income and it’s pretty easy to end up broke even with insurance. After all of that, Medicaid might be their only option to not go bankrupt. With hospitals not being able to determine presumptive eligibility soon, the need for emergency medical care just became even more inconvenient.

Along the lines of presumptive income eligibility, applicants were also given the benefit of the doubt when it comes to their citizenship. A statement from the individual was all that was needed to start coverage until they had been given a satisfactory amount of time to produce valid documentation to prove citizenship. Not surprisingly, beginning six months after this bill is passed, no one will be eligible for coverage until they can prove citizenship. For most, this probably doesn’t seem like a big deal since a social security number is considered valid proof. If States do elect to offer coverage while waiting for proof, they will not receive Federal funds for any medical assistance they provide during that period. If you are curious just how much money is spent on medical coverage for illegal aliens, I found an interesting article from PolitiFact on this topic.

For people in nursing homes or long-term care facilities, States will not be able to increase the home equity allowance from $500k to $750k. It will now just be $500k plus a yearly increase based on the consumer price index in increments of $1000. This increase began in 2011 and will remain in effect.

If States must pass legislation to comply with any of these changes, they will have one regular legislative session to do so. The example they used is if a State has a 2-year legislative session, each year will be counted as a different regular session and they will only have one of those to complete the work needed.

Section 115: Safety Net for Non-Expansion States

During the years of 2018 – 2021, non-expansion States (in regards to Medicaid expansion) will receive funds equal to 100% of their medical assistance expenditures and 95% every year after that. This could certainly be a financial incentive for States to resist expanding their Medicaid coverage and I think it would be hard to argue that it isn’t.

There is a formula to cap these payments, however, and it is based on total population and population at 138% of the poverty income level. Payments to providers will not exceed the cost of the services but, again, did that really need to be said? Perhaps the frustration for that sentence should stick with whomever is responsible for the outrageous prices for hospital services.

Once a State offers expanded coverage, it will not be treated as a non-expansion State under this section in subsequent years.

Section 116: Providing Incentives for Increased Frequency of Eligibility Determination

The moment I got to this section, I dreaded. I am blessed to not be on Medicaid but I have sat with someone during an eligibility interview because they moved to a new state. It wasn’t even my medical coverage and I was nervous! They ask you pretty much everything besides how much your frying pan is worth… I get why they do that but I feel like the following addition to the health care law could be abused by States who are looking for additional funding.

Beginning October 1, 2017, anyone now eligible for medical assistance because of the expansion plan and if their income was determined by their modified adjusted gross income, they must be reevaluated for eligibility at least every six months. Money paid to States for activities related to these reevaluations will be increased by 5%. If they spend $100 for a reevaluation interview, they will receive $105. Do you see where this could be abused? If the words “at least” weren’t in there , wouldn’t be so concerned but more reevaluations equal extra paper Lincolns.

Civil monetary penalties for any person or entity (besides the beneficiary of medical assistance) have increased when it comes to intentionally committing fraud by claiming services that weren’t provided, medically necessary or completed outside of the eligibility period and presenting patients to physicians who aren’t properly licensed or certified. This applies to individuals that are “knowingly enrolled” on or after October 1, 2017. Each case identified will bring a heft $20k penalty.

We made it through. My brain hurts. We should go take a Tylenol together. ‘Til next time when venture into Subtitle C of the proposed health care bill!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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