Medicaid 2002 Spotlight: State Action Under HIFA Sparks Concern
Proposed Waivers Threaten Services

Advocates across the country are closely watching state legislatures to safeguard access to services for Medicaid recipients following the recent implementation of the Health Insurance Flexibility and Accountability (HIFA) demonstration initiative (see the December issue of State Advocacy Update). Although HIFA is designed to allow states to reduce services for some Medicaid recipients and extend a more modest benefit to the uninsured, the new regulation also allows states to simply reduce Medicaid expenses without expanding coverage.

To date, only a few states have initiated a waiver application under HIFA. Stakeholder groups attribute this lukewarm response to the absence of new federal funding for such expansions. NMHA remains concerned, however, that the benefit and cost-sharing changes proposed in some applications would directly affect services for individuals with mental illness.

Given budget constraints in state Medicaid programs, NMHA worries that states will use this waiver flexibility to balance budgets on the backs of their most vulnerable citizens. With an anticipated Medicaid shortfall of more than $38 billion across the 50 states in 2002, Medicaid officials are scrambling for ways to control costs. Mental health and other disability advocates must pay careful attention to HIFA and other waivers of federal law or state options to protect funding and access to needed treatment and services.

Some State Waivers Under HIFA Spell Trouble
Arizona was the first state to receive a waiver approval under HIFA. And Utah's recently approved proposal was the first to include benefit reductions for certain Medicaid enrollees in an effort to expand coverage to a wider group of uninsured individuals. Below are brief summaries of these waivers and other recent waiver applications that are pending or in development.

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State Advocacy Homepage

Maximizing Medicaid Options for Mental Health Services

Community-Based Mental Health Works

Health Insurance Flexibility and Accountability (HIFA) Demonstration Initiative *

A Call for Investment: Expanding Community-Based Mental Health Services*

Mental Health: Pay for Services or Pay a Greater Price*

NMHA Letter to Secretary Thompson

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Arizona Reallocates SCHIP Funding To Expand Coverage
Arizona's waiver amends its existing section 1115 waiver for the Arizona Health Care Cost Containment System to use its state Children's Health Insurance Plan (SCHIP) funds to expand coverage to 50,000 adults-25,000 of whom are uninsured. This population includes parents with children enrolled in KidsCare, Arizona's SCHIP plan, childless adults, and childless couples with incomes between 100 and 200 percent of the federal poverty level (FPL).

The waiver will be implemented in two phases: Childless adults (with family incomes up to the FPL, which is $8,590 for an individual and $11,610 for a couple) became eligible Nov. 1, 2001. Parents of SCHIP and Medicaid children (with family incomes between 100 and 200 percent of FPL, which is between $17,650 and $35,300 for a family of four) become eligible Oct. 1, 2002. Benefits and cost-sharing requirements will be identical to the state's acute care and SCHIP program benefit packages.

Utah’s Approved Waiver Cuts Benefits To Expand Coverage
Approved in February, Utah's waiver extends Medicaid coverage to 25,000 uninsured residents by restructuring the Utah Medical Assistance Program (UMAP) into three benefits packages: traditional Medicaid, a plan based on the state employee plan, and a new package called the Primary Care Network. The waiver, which includes benefit cuts to certain Medicaid beneficiaries, is the first of its kind to be approved.

Under the waiver, Utah will be able to extend Medicaid coverage to uninsured adults with incomes of up to 150 percent of the federal poverty level, or about $12,885 a year for an individual. Those newly eligible for UMAP will pay a $50 enrollment fee and receive a benefits package that covers primary and preventive care services. The waiver also allows the state to provide full Medicaid coverage to about 150 "high-risk pregnant women" whose incomes exceed the state's eligibility limit. These women will not have to pay the enrollment fee or for any cost-sharing.

To cover the cost of the new enrollees, the state will reduce benefits for between 17,000 and 20,000 beneficiaries. Reductions will include a cap on the number of visits to physical therapists, chiropractors and psychiatrists; the elimination of transportation to doctor visits except in emergencies; and reductions in speech, vision and dental benefits. According to the announcement of the waiver approval, however, children, the elderly, pregnant women and beneficiaries with disabilities will be exempt from any benefit reductions.

Parents who receive Temporary Assistance to Needy Families (TANF) or who are eligible for transitional Medicaid, and "medically needy" adults would qualify for a plan based on the state's Public Employee Health Plan. SCHIP eligible children would also receive benefits under the Public Employee Health Plan. All adults with incomes below 200 percent of the FPL, including childless adults who earn below 53 percent of the FPL and who are currently in the state-funded UMAP program, would be eligible for a new plan called the Primary Care Network.

The Public Employee Health Plan includes coverage for mental health and substance abuse benefits that is similar to the coverage provided in the regular Medicaid program. Mental health services would continue to have inpatient and outpatient visit limits of 30 days per year; however, the new plan would impose a new copayment of $100 per day for inpatient stays and increase the copayment from $2 to $3 per visit for outpatient visits.

Under the Primary Care Network, no mental health or substance abuse benefits would be covered. Prescription drugs would be available under the new plans, but a $2 copay per prescription would apply under the Public Employee Health Plan and a $5 copay per generic drug or pre-approved brand name drug would apply under the Primary Care Network. Under the regular Medicaid program, the copay is only $1 per prescription, with a monthly limit of five copays. Brand name drugs not on the approved formulary would have a 25 percent coinsurance rate. Emergency ambulance services are not covered under the Public Employee Health Plan or the Primary Care Network for psychiatric emergencies.

Michigan’s MIFamily Includes Mental Health and Substance Abuse Benefits
Michigan Governor John Engler submitted a waiver March 1 seeking to expand the state's CHIP program, MIChild, to include more than 220,000 low-income adults. The program, called MIFamily, would cover outpatient care, prescription drugs, mental health and substance abuse services, and "limited" inpatient care for the following groups: 80,000 parents or guardians of MIChild enrollees with incomes between 51 percent and 100 percent of the FPL; disabled adults with incomes of up to $31,188 per year; and 2,000 pregnant women with annual incomes between $21,182 and $23,980.

Under the proposal, full Medicaid benefits would be made available to pregnant women who earn up to 200 percent of the FPL and to individuals eligible under the Ticket to Work Act. Parents and children in families with incomes at or below 50 percent of the FPL would receive modified benefits with cost-sharing ($5 copayment for generic medication/$10 copayment for brand medications; $25 emergency room copayment). This group would also receive mental health services through the state's regional community mental health centers.

Parents and children in families with incomes between 51 percent and 100 percent of the FPL would receive similar benefits, but their inpatient care benefits would be limited to $500 per day for the first five days of a hospitalization. In addition, for children up to 100 percent of the FPL, the state proposes replacing Early, Periodic Screening, Diagnosis and Testing (EPSDT) benefits with services that meet the criteria of the National Academy of Pediatrics. The waiver proposal also seeks to expand eligibility for the County Health Plan-currently a seven-county pilot program of limited Medicaid services for medically needy individuals-to 40 counties.

The Engler administration vows that services for mental health will be unchanged, and advocates note that upon initial review, optional mental health benefits appear to be intact. However, the proposal outlines a process to review the benefit and cost-sharing requirements annually, and preserves the state's ability to cap enrollment for new participants.

The state plans to use $300 million in unused federal money earmarked for MIChild to finance the expansion. Advocates are skeptical that the proposal can be budget neutral, given that the state recently made cuts to Medicaid to wipe out a nearly $1 billion budget deficit this year.

Oregon’s Proposal Reprioritizes Benefits
The state wants to expand Oregon Health Plan (OHP) eligibility to approximately 42,000 working poor by cutting benefits for about one-quarter of the program's current beneficiaries. This proposal would increase eligibility to 185 percent of the FPL, which is $17,600 for a family of four. Under a statute passed last summer, the state divides OHP members into two groups with different benefit packages: OHP Standard and OHP Plus. To cover the cost of expanding coverage, the state proposes to cut benefits for those who became eligible for Medicaid after it expanded the program in 1994. Pregnant women, children, and individuals with disabilities, however, would be exempt from the benefit cuts, and state officials say they intend to preserve coverage of mental health services and drug treatment

Washington’s Broad Changes Threaten EPSDT Services
The Washington state Department of Social and Health Services proposal seeks to achieve eligibility expansion by: (1) capping enrollment and proposing waiting lists, (2) implementing cost-sharing for optional services, and services accessed through EPSDT, (3) waiving mandatory service requirements, and specifically EPSDT requirements, for optional groups, (4) establishing a benefit floor, based on the state's Basic Health Plan, the "Buy-In" plan for working uninsured state residents and (5) using unspent SCHIP federal allotment to cover parents of Medicaid- and SCHIP-eligible kids and childless adults through the Basic Health Plan.

The proposal lacks detail about specific benefits changes, enrollment caps and cost-sharing requirements, raising concern among advocates about the blanket authority of the state to make changes that affect vulnerable populations. CMS responded to the state in January, requesting more detail about the proposed benefit design and cost-sharing requirements.

Tennessee Divides TennCare Into Service Tiers
Although the Center for Medicaid and Medicare Services (CMS) extended Tennessee's existing 1115 waiver until 2003, the state submitted a revised waiver amendment in mid-February. The proposal would divide TennCare, into three tiers:

  • TennCare Medicaid-would provide coverage for individuals and families with mandatory eligibility for Medicaid; for pregnant women and infants with incomes of up to 185 percent of the FPL; and for women diagnosed with breast or cervical cancer.

  • TennCare Standard-would provide coverage for uninsured residents with incomes under 250 percent of the FPL; for "medically eligible" children and adults of any income (as determined by the underwriter); and for uninsured children enrolled in TennCare as of Dec. 31, 2001, and with family incomes below 200 percent of the FPL. In addition, individuals enrolled in TennCare as "uninsurable" (in private insurance markets) as of Dec. 31, 2001, who have Medicare, will receive only pharmaceutical benefits under TennCare Standard.

  • TennCare Assist-would provide premium assistance to low-income working people with access to group health coverage. Actual eligibility levels will be determined by annual budget appropriations.

TennCare Medicaid beneficiaries would receive current Medicaid benefits, except home health care visits would be limited to 125 per year and some services for adults (sitter services, adult cataract glasses, convalescent care and private duty nursing care) would be eliminated. All services would be provided without copayments or premiums.

The state also wants to give dually eligible beneficiaries (people who are eligible for both Medicaid and Medicare) the option of receiving prescription drugs and other services through the state's managed care organization, TennCare Select. The dually eligible beneficiaries and the "uninsurable" adults who only receive a prescription drug benefit, would be assigned a primary care provider to authorize and monitor prescription drug use.

TennCare Standard beneficiaries would receive a package comparable to the state employees package and private sector basic HMO coverage. Beneficiaries with incomes of more than 100 percent of the FPL would pay premiums and copayments (except for preventative care services for children and adults).

Behavioral healthcare coverage under TennCare Medicaid and TennCare Standard would be provided through the TennCare Partners behavioral health organization. Behavioral health prescription drugs would be available through the state pharmacy benefits program. Beneficiaries under TennCare Standard would pay a $100 per admission copayment for inpatient services, a $25 emergency room visit copayment (waived upon admission), and an outpatient visit copayment of $10 for community mental health centers and $25 for other facilities.

Substance abuse benefits for TennCare Standard bene-ficiaries and TennCare Medicaid beneficiaries over the age of 18 would be limited to 10 days of detoxification services and $30,000 in lifetime benefits. TennCare Standard beneficiaries would pay a prescription drug copayment of $5 for generic medications and $15 for brand name medications and refills.

TennCare Assist would require an out-of-pocket maximum of $2,000 per individual or $4,000 per family per year. Employers would have to contribute at least 60 percent of the cost of family coverage.

 

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