States managing their health insurance marketplaces have the opportunity to streamline the transition from Medicaid to marketplace plans for those no longer eligible for Medicaid. This process can be complicated and lead to coverage gaps. Some states are automating and simplifying transitions, while others use single eligibility determination systems. Some states use tax data to streamline enrollment. Additionally, covering initial premiums helps individuals transition smoothly. These state-led initiatives aim to ensure eligible individuals access affordable health coverage, preventing lapses in insurance during the transition process.
States that oversee their state-based health insurance marketplaces (SBMs) are uniquely positioned to facilitate the seamless transition of individuals no longer eligible for Medicaid to a suitable marketplace plan while ensuring they receive financial assistance if eligible. This advantageous position arises from the state’s dual administration of both the SBM and Medicaid programs. Currently, thirteen out of the seventeen states, along with Washington, D.C., that operate SBMs are pioneering innovative strategies to simplify these transitions as the Medicaid continuous coverage provision is phased out. More states must contemplate adopting similar measures during the unwinding process and beyond.
Complexities Leading to Potential Uninsurance
The Affordable Care Act (ACA) envisioned a “no wrong door” policy, aiming to enable individuals to apply through a single, streamlined application process and subsequently enroll in the health coverage appropriate for them, whether it be Medicaid, a marketplace plan, or another program. However, this vision has not been fully realized. Typically, someone losing Medicaid must navigate a series of steps to successfully transition to the marketplace. These steps include understanding how and where to apply, completing an application, selecting a plan, and submitting any necessary documentation. Delays can also occur as the state processes their application. These challenges increase the risk of individuals becoming uninsured or experiencing gaps in coverage, despite being eligible for no- or low-cost coverage.
Many individuals losing coverage during the unwinding of Medicaid are likely still eligible for Medicaid, while others may now qualify for a marketplace plan. States operating SBMs are employing various strategies to help these individuals access affordable marketplace coverage with reduced administrative burdens.
State-Initiated Strategies
1. Automatic and Streamlined Transitions
In a bid to minimize the potential for coverage disruptions, five states are simplifying the transition process from Medicaid to a marketplace plan:
– California automatically matches individuals losing Medicaid with the silver plan that offers the lowest premiums and cost-sharing charges. If they are matched with a plan featuring a $0 net premium, they can opt into coverage online or via phone. Those matched with a plan requiring a premium must pay their contribution for the first month’s premium to initiate coverage.
– Maryland automatically matches Medicaid recipients who lose coverage with the lowest-cost silver or gold plan offered by an affiliate of the plan they selected for Medicaid. If this is not feasible, the state matches them with the silver or gold plan having the lowest premiums and cost-sharing. To commence coverage, individuals matched with a $0 net premium plan can opt-in online, while those matched with a premium plan must pay their contribution for the initial month’s premium.
– Massachusetts permits individuals to check a box on its online marketplace application, authorizing the marketplace to automatically enroll them in a $0 net premium plan if they meet the criteria.
– Oregon has obtained federal approval to allow current Medicaid enrollees with incomes between 138-200 percent of the federal poverty level (FPL) to retain their coverage temporarily. These individuals will be automatically transitioned to Oregon’s Basic Health Program (BHP) once it becomes operational, expected in July 2024. Oregon’s BHP plans, offered by all insurers participating in the state’s Medicaid managed care system, will have similar benefits, premiums, and cost-sharing, reducing confusion and coverage disruption.
– Rhode Island automatically enrolls individuals who lose Medicaid and have incomes below 200 percent of the FPL into silver plans with low or no premiums. As of July 2023, half of the individuals who lost Medicaid and transitioned to a marketplace plan were auto-enrolled.
2. Single Eligibility Determination
At least ten states and D.C. have adopted a unified system for determining eligibility for both Medicaid and the marketplace, resulting in expedited – sometimes instantaneous – eligibility determinations. States have implemented this approach by employing a single application for both programs, integrating databases, and fostering greater collaboration between Medicaid agencies and SBMs. These measures lay the foundation for more comprehensive coordination efforts between Medicaid and the marketplace.
3. Streamlined Enrollment Using Tax Data
The introduction of an easy enrollment system enables Medicaid agencies and SBMs to assess an individual’s eligibility for either program based on information from their state tax filings or other sources, such as unemployment insurance filings. Under this approach, individuals can authorize state agencies to share pertinent information with Medicaid and the marketplace. These agencies then employ this data to conduct a preliminary eligibility assessment and inform individuals about their potential eligibility for either program before they officially apply. Unlike automatic and streamlined transition strategies, the easy enrollment approach does not involve matching or enrolling individuals in a specific health plan. Five SBM states have already implemented easy enrollment for marketplace plans, with three more planning to introduce this policy in 2024, and two states intending to fully implement it after transitioning to an SBM.
4. Covering Enrollees’ Initial Premiums
States are addressing cost barriers that may dissuade individuals from enrolling in marketplace plans by covering their initial premiums. This proactive measure not only reduces the financial burden on transitioning Medicaid recipients but also allows for the implementation of automatic enrollment without exposing individuals to unexpected premium costs. Several states have taken steps in this direction:
– New Mexico covers the first month’s premium for individuals losing Medicaid with incomes below 400 percent of the FPL who select a marketplace plan.
– Rhode Island utilizes funds from the American Rescue Plan to cover the first two months of premiums for individuals who are automatically transitioned from Medicaid into a marketplace plan that requires premium payments.
– Connecticut is establishing a program to cover the first two months of marketplace premiums for individuals losing Medicaid with incomes between 175 and 200 percent of the FPL.
