January 25, 2016

Federal Waivers Could Make Health Insurance Accessible, Affordable

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Health insurance coverage might be more accessible and affordable in Connecticut if the state applied for certain Affordable Care Act and Medicaid waivers, according to advocates who say the options should be explored.

Two waivers in particular—Affordable Care Act (ACA) Section 1332 and Medicaid Section 1115—would let the state disregard certain federal requirements, possibly lowering health care costs for some individuals, according to a policy brief commissioned by the Universal Health Care Foundation of Connecticut and the Connecticut Health Foundation.

“What we need to do in Connecticut is really think about … how could we creatively, imaginatively, innovatively use waivers to expand coverage to quality care and really help improve health,” said Frances Padilla, president of Meriden-based Universal Health Care Foundation of Connecticut. “We haven’t had that conversation yet in Connecticut.”

The ACA waiver isn’t available until 2017 but the Medicaid waiver is already being used by dozens of other states to lower costs, she said.

“It allows a state to get past some of the requirements of Medicaid and do some things that are innovative,” she said of the Medicaid waiver.

Exploring the Medicaid waiver is particularly timely, Padilla said, because many enrollees are being bumped from Medicaid due to budget cuts, and many aren’t enrolling in insurance plans via state’s Access Health CT marketplace as was the hope.

A growing number of Connecticut residents have gained health insurance since the passing of the Affordable Care Act, but many aren’t using it because of expensive deductibles and co-pays, she said.

Access Health CT announced in late January that it enrolled nearly 109,000 people in private health insurance plans.

“We’ve come a long way with the ACA but there is not perfection with it,” agreed Patricia Baker, president and CEO of the Hartford-based Connecticut Health Foundation. “Affordability is such a huge issue for everyone. The conversation [about waivers], we believe, is absolutely important.”

Forty-three states and Washington, D.C., use at least one Medicaid Section 1115 waiver, according to the brief, which was authored by analysts at the University of Massachusetts’ Center for Health Law and Economics.

The waiver, according to the brief, lets states disregard many aspects of their Medicaid plan if the federal Centers for Medicare and Medicaid Services determine it makes sense and is cost effective.

The waiver can let states raise income eligibility limits and add benefits that aren’t usually covered by Medicaid, among other things. Once states apply for the waiver, it usually takes months or years to negotiate terms and gain approval, according to the brief.

On Aug. 31, some Connecticut residents lost their ability to qualify for HUSKY A, state Medicaid that covers low-income children and teens, under a state law that changed income eligibility standards. The change lowered the income eligibility level for parents and caregivers—from 201 percent to 155 percent of the federal poverty level—meaning those earning more than 155 percent of the poverty level no longer can receive HUSKY A.

If Connecticut were to pursue it, the state would need to file an application with the U.S. Department of Health and Human Services. Legislative approval is not required.

The forthcoming ACA 1332 waiver will let states opt out of major components of the Affordable Care Act, including the mandate that a state-run marketplace (Access Health CT) exist. To get the waiver, states will have to prove that alternative programs would provide equally comprehensive coverage to a comparable number of people without increasing the federal deficit, according to the brief.

The brief outlines potential pitfalls to using the waivers. Among them: state finances could be at risk if projected federal revenue to support programs falls short; political changes could jeopardize waiver programs that require federal approval; and using waivers could hurt Access Health’s clout and financing base by taking people out of the marketplace.

“There’s always the good, the bad and the ugly,” Padilla said, so any waiver needs to be researched before deciding whether to proceed.

Connecticut currently participates in 11 Medicaid waiver programs, according to David Dearborn, spokesman for the Department of Social Services (DSS) that administers the state’s Medicaid program. DSS has overall responsibility for the waivers, he said, but five of them are under DSS directly, five are under the state Department of Developmental Services and one is under the Department of Mental Health and Addiction Services. Connecticut’s existing waivers pertain to early childhood autism, acquired brain injuries, personal attendants and a state home care program for elders, among other things, Dearborn said.

Using the waivers has made the state a “national leader” when it comes to “creative and effective ways of adapting Medicaid rules” to provide home- and community-based services to people who otherwise would need nursing home care or institutionalization, he said.

“There’s already a lot of positive action going in Connecticut,” he said, with the state taking innovative steps to expand Medicaid’s reach.

Similarly, even more state residents could potentially access services under ACA Section 1332 and Medicaid Section 1115 waivers, Baker said.

“There’s nothing intrinsically good or bad about waivers, but they are an opportunity that this state should explore,” she said.

 

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