Challenges in Implementing Reforms for People with Income

and Employment Changes

Pamela Farley Short

Penn State University

Acknowledgements

• Research support from The Commonwealth Fund

• Collaborators– Katherine Swartz, Harvard – Namrata Uberoi, Penn State– Deborah Graefe, Penn State

Reforms Offer Universal Access to Affordable Insurance

• Individual health insurance exchanges, with premium credits for some enrollees

• Lacking access to affordable employer plans

• Between 133% and 400% of poverty line

• Small employer exchanges – Separate or combined with individual (states decide)

• Medicaid for all children and adults < 133% of poverty line

• Children’s Health Insurance Program (CHIP) extended to 2019

Changes in income, employment, or family membership

• Could cause lots of people to gain or lose coverage from these sources each year

• Implementation Challenge: How to maintain – Coverage– Affordability– Shared responsibility

when someone’s ability to pay for insurance is changing?

Year-to-Year Changes in Annual Income (2005 vs.2006)

Source: Authors’ tabulations of 2004 Survey of Income and Program Participation

2006

Low-income Workers are Concentrated in Small Firms

Source: Authors’ tabulations of 2004 Survey of Income and Program Participation

Percent in firms with 100 or fewer employees

Coordinating Medicaid with premium creditsto buy insurance from exchange is CRITICAL.

• Many new enrollees will be coming from the other program.

• Adds another large, federal bureaucracy (the Internal Revenue Service) to Medicaid’s federal-state mix

• History of special efforts needed to achieve high rates of participation in Medicaid

• Tax credits based on annual income, but Medicaid eligibility based on income at “time of application”

Policy suggestions

• Design eligibility and navigation systems to help people cope with changes in eligibility– Emphasize hand-offs between programs– Will need to answer “what if” questions involving

income and employment changes in coming year

• Consider State Basic Health Plan to bring everyone below 200% of the poverty line under state umbrella

Policy suggestions (cont.)

• Extend Medicaid/CHIP eligibility through the next open season to the end of the year.

• Combine individual and small employer exchanges.

• Provide broad access to the same plans (or provider networks) through Medicaid and the exchange(s).