CHN: Critical Low-Income Health Care Programs Need To Be Extended

Unless Congress acts, several health programs important to low-income families will expire on March 31 and others will end later this year.  These programs are key to providing health care to families transitioning from welfare to work, helping low-income elderly and people with disabilities pay their Medicare premiums, and making it easier to enroll children in the Children’s Health Insurance Program (CHIP).  Advocates hope these programs will be extended when Congress addresses the scheduled cuts in payments to doctors of Medicare patients.  Medicare’s sustainable growth rate (SGR) was put in place in 1997 to control growth in Medicare spending on physician services.  Annually a determination is made regarding the physicians’ fee schedule (colloquially known as the ‘doc fix’), and physician groups lobby Congress to adjust the payment rates to avoid cuts.  If Congress fails to act, a round of cuts will begin on April 1.
The Transitional Medical Assistance (TMA) program, part of the 1996 welfare reform law,  allows families who have lost Medicaid eligibility because they have found a job or received a wage increase to stay on Medicaid for up to 12 months. This important work support program encourages parents who might otherwise fear losing health care coverage to take a job.  The GAO estimates that TMA provided coverage to over 3.7 million people in 2011.  This program is particularly important in the 24 states that have not agreed to the Affordable Care Act’s (ACA) Medicaid expansion. Typically working parents in those states lose Medicaid eligibility when their income is $11,913 for a family of three, or even less in some states.  In the expansion states Medicaid is available for families with incomes up to 133 percent of the poverty line (up to $26,039 for a three-person family), and those above that level can receive subsidies in the new health insurance exchanges. The Administration proposes to allow expansion states the option of providing TMA.  The one-year cost of extending TMA is about $500 million according to the Congressional Budget Office (CBO).  However, inaction on the part of Congress by March 31 would result in the expiration of the TMA program.

The Qualified Individuals (QI) Program helps more than 450,000 low-income seniors and people with disabilities pay for their Medicare Part B premium and other out-of-pocket costs (including out-patient care, testing, and doctor visits).  If not extended, QI is also set to expire on March 31.  QI serves people with incomes between 120 and 135 percent of the poverty line ($13,788 to $15,512 per year for an individual) by covering the full cost of their Part B premium or $1,259 in 2013.  The cost of renewing QI for one year is about $900 million according to CBO.

The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) provides  funding for “performance bonuses” for states implementing strategies that make it easier for eligible children to enroll in Medicaid and CHIP, if the states achieve their enrollment target.  In 2013, 23 states received a total of $307 million in bonuses.  Those strategies have been credited with contributing to the historic low of 8.9 percent of children without coverage in 2012, a drop of 25 percent since 1999.  The CHIPRA bonuses expired in September 2013 and should be renewed and reformed to include strategies not already required by the ACA.

Another provision included in CHIPRA called Express Lane Eligibility (ELE) allows states to use information from applications for other low-income programs like the School Lunch Program, SNAP (Food Stamps), Head Start and WIC to determine whether children are eligible for Medicaid and CHIP.  This saves states paperwork and administrative costs, and families from providing duplicative information to multiple agencies. A positive improvement would be to allow states flexibility to extend ELE to programs for which adults are eligible.  Currently 13 states use the ELE option.  The program expires at the end of FY 2014.

Congress is focused on a ‘doc fix’ for the 24 percent cut in Medicare payment rates set to take effect on April 1.  There is bi-partisan agreement in the Senate to suspend the cuts but no deal in place for how to pay for the adjustment.  A temporary one-year fix would cost approximately $11-12 billion and a permanent replacement, depending on the legislative version, would vary from $121 billion to $153 billion over 10 years.  The newly released President’s FY 2015 budget reflects the fact that SGR cost estimates have been coming down compared to previous years, and its 10-year estimate is on the low end.  Advocates believe that the low-income health programs with a substantially smaller combined price tag should be extended or made permanent corresponding to the relief granted to Medicare physicians.  They are concerned that while the President’s FY 2015 budget provides ten-year estimates for making SGR and Express Lane Eligibility permanent, it only extends for one year the TMA and QI programs.

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