Although more than half of the states are suing to get out of a massive Medicaid expansion under the federal healthcare overhaul, most also are working to overcome a key obstacle to growing their programs.
The Patient Protection and Affordable Care Act relies heavily on broadening eligibility in the joint federal and state program beginning in 2014 in order to extend health coverage to most Americans. The required Medicaid expansion also faces a constitutional challenge by 26 states on which the Supreme Court will decide by the end of its session in June. Those states maintain that the law creates an unconstitutional cost burden on their states beyond the federal government's initial coverage of the cost of the new Medicaid enrollees.
If it stands, the Medicaid expansion will provide not only half of the estimated 32 million people projected to gain coverage under the law but also critical support to the functioning of state health insurance exchanges, through which the other 16 million people are expected to obtain coverage under law, according to Congressional Budget Office projections.
But the growth in Medicaid and the support those programs are expected to provide to the exchanges depend on the ability of states to upgrade the public insurance programs' sometimes decades-old technology.
“Most of the current eligibility systems are often a part of the old cash assistance programs, and they are very much older systems, often legacy systems and have not been designed for the new world of engaging consumer-centric healthcare delivery,” said Patricia MacTaggart, a lecturer at George Washington University and the former director of the Minnesota Medicaid program.
The exact status of those technology upgrades and whether states will finish them by 2014 remain unclear, according to health policy experts following the issue. But recent evidence indicates most states—including some of those in the Medicaid lawsuit—at least are trying to enact such upgrades.
For example, 18 states have received CMS approval and funding for Medicaid IT system upgrades to help determine eligibility and aimed at allowing states to meet the 2014 requirements of the reform law, according to a recent annual Medicaid report by the Kaiser Commission on Medicaid and the Uninsured. Another 10 states and Washington, D.C., have submitted Medicaid IT upgrade plans to the CMS.
The increasing interest in that particular component of Medicaid health IT upgrades is driven in part by the offer of time-limited federal funding. The report, based on surveys of state Medicaid officials, found 19 more states expect to participate because of the increase in federal matching funds from 50% to 90% of the cost of major Medicaid enrollment-related technology upgrades before 2015.
“What you're seeing from the report is how many states are moving fast to try to get their systems in order,” Samantha Artiga, one of the report's authors, said when asked how the findings relate to the 2014 enrollment expansion.
States also have undertaken an electronic data match with the Social Security Administration to determine immigrant status eligibility. In 2011, 13 states performed the electronic upgrade for children and 11 did so for parents, bringing to 41 the number of states that have adopted the upgrade for children, parents and pregnant women in Medicaid and 31 that have completed it for their Children's Health Insurance Program.
Such rapid upgrades were enabled by a number of federal efforts, according to state and federal healthcare officials. For example, the federal government replaced a yearslong process for considering state funding applications for major Medicaid eligibility system upgrades with one that takes as little as 45 days.
HHS officials also began emphasizing an incremental approach, by which states upgrade their Medicaid programs' IT system just enough to meet the 2014 enrollment requirements before going back later to upgrade them again to accommodate additional, nonmandatory populations.
“There are going to be different ways for different states and we're trying to be as flexible as we can to overcome whatever barriers there are for each state,” said Cindy Mann, director of the Center for Medicaid, CHIP and Survey & Certification at the CMS.
One state taking that path is South Carolina, which also is suing to get out from under the Medicaid expansion mandate. John Supra, chief information officer and deputy director of eligibility and beneficiary services for the South Carolina Department of Health and Human Services, said the incremental approach is the only way his state will meet the 2014 technology upgrade deadlines. “We can't take a year and a half and dump a new system and new processes on our staff,” Supra said. “An incremental and iterative process will meet those requirements because we're able to do the things that minimally meet the requirements today and then expand over time and in the direction we want to go.”
So far, Supra said, the state has not identified any aspects of the 2014 Medicaid IT requirements that it does not expect to meet.
The success of the Medicaid IT upgrades is necessary not only for adding millions of new enrollees to the low-income insurance program, according to health policy experts, but also essential to the ability to direct enrollees to the new health exchanges and to determine qualifications for federal insurance subsidies for policies people buy there.
“The idea of creating that commonality between Medicaid and the exchanges is critical” because the law bases access to both programs on individuals' modified adjusted gross income, which the same application process can determine, MacTaggart said. “But also from a consumer perspective they should really have one door to healthcare in their state, and the door being their computer screen.”
