the urban institute 1 express lane eligibility prepared for the national academy for state health...
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THE URBAN INSTITUTE 1
Express Lane Eligibility
Prepared for the National Academy for State Health Policy
Stan Dorn The Urban Institute
May 14, 2009
THE URBAN INSTITUTE 2
Topics to discuss
•Why this matters•What’s the thinking behind Express Lane
Eligibility (ELE)? •Promising opportunities to use ELE
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Most uninsured children are eligible for Medicaid or CHIP
Uninsured children, by eligibility for Medicaid and CHIP: 2004
Eligible for CHIP22%
Ineligible for Both26%
Eligible for Medicaid
52%
Sources: Dorn, et al., Feb. 2009, applying eligibility simulation model described in Dubay, et al., 2007.
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New financial incentives in CHIPRA
•Increased CHIP enrollment can raise future CHIP allocationsAnd lower enrollment can cut
future allocations•Increased Medicaid enrollment
can qualify for performance bonusesSo long as state implements 5 of
8 “best practices,” which include ELE
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The value added question
•When a family has already shown low income by filling out forms for one government agency, what is the value of requiring it to complete a similar form for a different government agency? •How does that value compare to the
consequences for:Enrollment;Household convenience; andAdministrative costs?
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The impact of inertia and procrastination on human behavior
Percentage of eligible workers who participate in tax-advantaged retirement accounts
9%
33%
90%
Independent enrollment inIRA
Firms where new hiresenroll in 401(k) only after
completing a form
Firms where new hires gointo 401(k) UNLESS they
complete an opt-out form
Sources: Sailer and Holden, 2005; Laibson (NBER), 2005.
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3. Potentially promising applications of Express Lane Eligibility (ELE)
a) State income tax formsb) Food Stampsc) National School Lunch Program
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Uninsured children who qualify for Medicaid or CHIP, by legal requirement to file federal income taxes and eligibility for federal EITC: 2004
Legally required to file federal income
tax returns79%
Not legally required to file, but eligible
for EITC12%
Neither legally required to file nor
eligible for EITC9%
Source: Dorn, et al., Feb. 2009.
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Among various groups of uninsured children, the estimated percentage whose families filed federal income tax returns: 2004
90.7% 87.2% 94.5% 89.4%
9.3% 12.8% 5.5% 10.6%
0%
25%
50%
75%
100%
All Eligible forMedicaid
Eligible forSCHIP
Eligible forEither Program
Families file returns Families do not file
Sources: Dorn, et al., Feb. 2009.
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What about state income tax forms?
•What’s your state’s minimum income threshold for required tax filing?•Does your state provide any refundable credits
(e.g., an EITC or child care credit that supplements the federal credit)?•Remember—if income is withheld from a
paycheck, the worker may need to file a state tax return to get a refund
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How it could work1. On tax form:
Require parents to identify their uninsured children Let parents request disclosure of tax data to the state’s health
agency Very important step. Without it, parents must file 2 forms, an income tax
form and a later health coverage form. o In Iowa, the state mailed application forms to parents who identified
their children as uninsured on state income tax returns. Only 10% applied.
2. Grant income-eligibility based on gross income (or AGI) and household size on income tax form
3. Qualify children as citizens based on SSA data match (starting in 2010)
4. Determine immigration status Intensive application assistance to obtain immigration evidence
Can obtain in the enrollment phase In the meantime, can provide presumptive eligibility (PE) based on income
alone Possible ELE based on SSA determination of permanent legal
residence when issuing SSN
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How it could work, continued5. If child is not eligible based on ELE, CHIPRA requires
the family to have a chance to submit a standard application
6. Collecting any remaining paperwork Can direct families to on-line forms
CHIPRA allows electronic signature Can use CBOs, facilitated enrollers In a managed care state, can use MCOs
Let the family pick an MCO If the family doesn’t act, the state chooses an MCO Once the MCO has been chosen, the MCO must collect
the final paperwork before capitated payments starto Key: no MCO contact until a plan is chosen
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Possible concerns• Parents may mislabel children as uninsured
Confirm by running data match against Medicaid/CHIP files, perhaps Medicaid TPL records of private coverage
• Revenue agency may resist changing tax returnIA, MD, NJ already use return to ask re children’s coverage MA uses return to request proof of coverage for adults
• Revenue agency may be concerned about violating the confidentiality of tax data
Consent to disclosure should address those concerns • Self-employment income
For tax purposes, can deduct from even gross income Meals; Entertainment; Depreciation; etc.
Could add back these deductions in calculating gross income or adjusted gross income, for purposes of ELE
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Final concern: tax information is so last year!•CHIPRA expressly allows using tax returns for ELE
Can only use within a “reasonable period,” defined by state•Multiple federal programs already do this
Prior-year tax returns establish current-year eligibilityWhat if your situation changed?
If income rose this year, eligibility not reduced until next year
If income fell this year, can immediately apply for extra helpNo application required if you file a tax form (although an
application process is available as a fall-back)Once exception: applications are needed for college
student aid. However, President Obama proposes to replace them with a “check-box” on the federal income tax return.
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Income tax returns and eligibility for various federally-funded, means-tested benefits
Tax return for Establishes eligibility during
Medicare Part B premium subsidies
2007 Calendar year 2009
Student aid for college
2007 School year 2008-2009
Rebate checks from 2008 stimulus legislation
2007 2008
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Food stamps – basic eligibility rules
• Income eligibility130 percent of FPL in gross income100 percent of FPL in net income
• Must be citizen or legal permanent resident (but no 5-year bar)
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How food stamp ELE could work1. Identify uninsured children
Match food stamp eligibility files with Medicaid and CHIP files to identify food stamp children not receiving health coverage
Permitted by pre-CHIPRA food stamp law
2. Let parents opt out Send notice explaining that, unless they object, data from their
children’s food stamp files will be used to determine potential eligibility for health coverage
3. Determine eligibility Automatically find, via ELE, that
All food stamp children are income-eligible for Medicaid; All immigrant food stamp children are legally residing in the U.S.,
for purposes of Medicaido Maybe not in a state with a 5-year bar for newly arrived
immigrants Establish citizenship via SSA data-match (2010 and later)
4. Parents must consent before enrollment
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Trade-offs•Potential advantages
Huge efficiency gains. Almost no value is added by requiring a separate health application. Among uninsured food-stamp children, only 1/10th of 1% are ineligible for Medicaid and CHIP.
Statistic applies to states that use CHIPRA to cover recently arrived immigrant children
In other states, almost all uninsured, citizen children receiving food stamps qualify for Medicaid and CHIP under existing law
Matchable, accessible data
•Potential disadvantagesNot enormous reach: 12.4 percent of eligible, uninsured children
received food stamps in 200441% of food stamp children without Medicaid or CHIP are
privately insured Need to do data match with information about private coverage
Some questions about categorically eligible Food Stamp recipients – good argument for applying ELE, but no CMS ruling
Families with TANF, SSI, GA can automatically get Food Stamps
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National School Lunch Program (NSLP): eligibility
• Income eligibility based on gross income Up to 130 percent of FPL, free school lunch 130-185 percent of FPL, reduced-price lunch
• No immigration status requirements
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How ELE could work with NSLP1. On NSLP application form, parents can:
Identify any uninsured children; and Consent to disclose NSLP and other data to determine
children’s eligibility for free or reduced-cost health coverage2. If children receive free lunches, use ELE to automatically
qualify them as income-eligible for Medicaid 3. If children receive reduced-price lunches, either
Use NSLP income-determination to establish income-eligibility for Medicaid/CHIP or
Provide PE and target children for intensive assistance to determine ongoing eligibility
4. For anything beyond PE, state must establish that NSLP children are citizens or legal immigrants
5. Collection of remaining paperwork Can follow income tax approach
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Trade-offs•Potential advantages
Broad reach: 59 percent of uninsured, low-income children live in families who participate in NSLP
•Potential disadvantagesIn many states
Limited digitization of matchable enrollment records“District-by-district” implementation is time consuming
Schools have other priorities Illinois law bases a district’s receipt of poverty-related school
financing on, among other things, Medicaid and CHIP receiptError rates
For free lunches, not a problem. NSLP errors do not extend health coverage to very many otherwise ineligible children. That’s because maximum income eligibility for free lunches is far below CHIP income limits.
For reduced price lunches, NSLP errors are more consequential.
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Recipients of free and reduced-price school lunches, by income-eligibility for health coverage (based on actual income)
Children receiving free school lunches
Children receiving reduced-price school lunches
Income-eligible for Medicaid
81% 49%
Income-eligible for CHIP
14% 38%
Income too high for both programs
4% 13%
Total: 100% 100%
Source: Dorn, April 2009.