In anticipation of the huge health insurance expansion coming in 2 years under the Affordable Care Act, federal officials are opening a one-stop shop for those applying for coverage through a health insurance exchange, Medicaid, or the Children’s Health Insurance Program.
The rule establishing the web-based system was issued March 16 but does not take effect until Jan. 1, 2014. The idea is to give states time to set up the new systems, according to Cindy Mann, CMS deputy administrator and director of the Center for Medicaid and CHIP Services.
Ms. Mann said the final rule sets up a process for low-income Americans to apply online for insurance using a single application process. The government – either through the state exchange or state Medicaid/CHIP agencies – will determine whether they are eligible and in which program they will be enrolled.
Rather than submitting lengthy paperwork to support an application, the agencies will use data provided by the Internal Revenue Service, Social Security Administration, state unemployment agencies, and other government databases to determine a "modified gross income" to verify eligibility. The process will be repeated once a year.
Disabled individuals and those needing long-term care coverage through Medicaid will go through a slightly different process requiring more verification, said Ms. Mann.
In some cases, potential enrollees may know within hours whether they are eligible for benefits.
Currently, the Medicaid and CHIP enrollment processes are largely done through the mail, although California, Utah, and Oklahoma are experimenting with online applications, said Ms. Mann. But it can take days or weeks for someone to determine if they are eligible for a program now, she said.
The rule lays the groundwork for an expansion of Medicaid benefits under the ACA. The law guarantees for the first-time coverage to low-income (up to 133% of the federal poverty level) adults without children. Effectively, the expansion will be up to 138% of the poverty level, as the law requires that 5% of income be disregarded for eligibility purposes, Ms. Mann said.
The expansion goes into effect in 2014 when the health insurance exchanges are due to start operating. Under the ACA, the federal government is set to pay 100% of the cost of the Medicaid expansion for 3 years, ending in 2016, and a minimum of 90% permanently thereafter.
Even so, Medicaid expansion is one aspects of the ACA being challenged in the Supreme Court on March 28. Twenty-six states have said that the expansion amounts to coercion by the federal government. If states don’t participate, they stand to lose all of their Medicaid funding.