Time will soon tell how many states will run health exchanges and expand Medicaid as directed in the federal health reform law. But for employer plans, the waiting game just draws out the inevitable confusion that may occur as those plans anticipate being impacted in different ways on a state-by-state basis, speakers explained at a Nov. 14 health policy conference.
States now face a political decision about the extent to which they will adopt the health reform law, including whether they will opt to expand theirinsurance programs by: (1) expanding Medicaid coverage to 133 percent of the federal poverty level; and (2) running their own health insurance exchanges as suggested in the health reform law.
Alternatives that states are considering include: (1) making eligibility something less than 133 percent of FPL; and (2) allowing the federal government to step in and run the exchange, Matt Salo, executive director for the National Association of Medicaid Directors told attendees at the National Business Coalition on Health’s annual conference.
Weaker Medicaid expansion could shift lives into employer plans, Salo said. As a result, employers might have to help insure more full-time low-paid workers in states that opt out of the federal 133-percent requirement.
- Note: Under the landmark U.S. Supreme Court decision last June otherwise upholding the law, Medicaid expansion was the sole element of the law to be reversed. As a result, the federal government cannot enforce the reform provision that would have completely cut off all Medicaid matching funding if a state failed to expand enrollment to 133 percent of FPL.
Because of the High Court’s ruling, states can safely limit the expansion of Medicaid eligibility. And many may consider 100 percent of FPL as the benchmark, because the federal subsidies are available to buy insurance on the exchanges to applicants between 100 percent and 400 percent of FPL, Salo noted. Keeping eligibility at 100 percent of FPL would interface with the federal program, he added. Thus, states have the option to shift more covered lives into exchange plans, and more costs to the federal government.
State-by-state Variations
There will be important state variations and employers are well advised know the fiscal, ideological and policy factors that are driving reform implementation in their states, Salo advised.
- “How every individual state goes about making that decision is going to be different, but I recommend that you figure out what that process is. … Not only the governor[s] but state legislatures will have [an] impact on reform implementation, [and] those legislatures could be influenced by [for example] business or hospital associations, and [a state’s business climate, state budgets and economic model] can have very wide-ranging impact on how reform is implemented.”
Will States Run their Own Exchanges?
And while many states may opt out of Medicaid expansion, they may be more willing to run their own exchanges. Here is the impending timeline for states to get the ball rolling on exchanges.
January 2013: Federal certification of exchange plans
Oct. 1, 2013: State-exchange open enrollment begins
Jan. 1, 2014: Effective date of coverage
March 31, 2014: Open enrollment close
Thirteen states and the District of Columbia have signaled their intent to run their own programs as desired by the health reform law. Sixteen have either said no or done nothing so far. And 21 states could go either way and can’t be predicted yet, said Alan Weil, executive director of the National Academy of State Health Policy.