Reform Update: HHS issues more grants, hoping to increase Medicaid beneficiaries

HHS issued a new round of grants to drive new beneficiaries into Medicaid amid reports that the program may fall short of its expected enrollment.

The department announced nearly $32 million in grants for local organizations in 22 states to use to identify and enroll children eligible for Medicaid and the Children's Health Insurance Program (CHIP). The grants to state agencies, community health centers, school-based organizations and not-for-profit groups were part of $140 million in outreach funds authorized by the Patient Protection and Affordable Care Act and the 2009 Children's Health Insurance Program Reauthorization Act.

The grants came a day after the Associated Press analysis of Urban Institute data concluded only 5.3 million people live in states expanding Medicaid eligibility to the full extent sought by the 2010 federal healthcare overhaul. That law provided full federal funding for three years for all newly eligible up to138% of the federal poverty level before tapering down to 90% of their costs in future years. Twenty-three states and the District of Columbia have formally decided to undertake that expansion and some others continue to consider it.

But the number of people who stand to get new coverage in those states is far short of 8 million new Medicaid and CHIP beneficiaries in 2014 projected in May by the Congressional Budget Office. The CBO projected that new enrollees would peak at 13 million by 2020.

Cindy Mann, director of Medicaid at the CMS, pointedly declined to offer a 2014 enrollment target when asked for one in a Tuesday telephone news conference.

“It's premature to come up with a number,” Mann said.

Mann warned at a June gathering of health policy experts that more time and work will be needed to improve the Medicaid enrollment process.

She said the agency would have better sense of next year's enrollment “in a month or so,” when more states have concluded their deliberations on the expansion.

The CMS expected enrollment to grow in Medicaid not only because of the greater eligibility but also because it has funded efforts for states to upgrade and streamline their enrollment systems, as well as initiatives to promote enrollment. Those efforts were credited with reducing the rate of uninsured children from 8.9% in 2008 to 6.6% in 2012, according to the Centers for Disease Control and Prevention.

Mann said the federal government is hoping to draw lessons from its ability to increase enrollment in the Medicaid program with a national enrollment drive for the health insurance marketplaces also authorized by the healthcare overhaul. Those insurance exchanges are expected to provide coverage to 7 million enrollees next year, according to the CBO projections. HHS Secretary Kathleen Sebelius late last month called that number “a realistic target.”

Alice Weiss, co-director, Maximizing Enrollment, National Academy for State Health Policy, said in an interview that state Medicaid agencies are “in a very significant preparation mode.”

“2014 is going to be a big learning year for the states,” Weiss said about state efforts to utilize many of the new areas of flexibility authorized by the federal healthcare overhaul. It is not yet known how many states plan to utilize those options, such as allowing hospitals to take on an enrollment role under an expansion of the “presumption of eligibility” initiative.

The Pennsylvania House rejected a measure Monday requiring Gov. Tom Corbett to seek federal approval to expand Medicaid eligibility, the Associated Press reported.

The state Senate included the Medicaid provision in a budget bill it passed Sunday night, but it was stripped by a key House committee before the GOP-controlled chamber sent the budget bill back to the Senate late Monday.

A spokesman for House Republican leaders said they disagree with the legislation because it would undercut the Corbett administration's ability to extract concessions from the federal government on how a Medicaid expansion would work.

Corbett, a Republican, on Sunday night refused to say whether he would support or veto the Senate's measure, and it was unclear from his comments on it whether he was aware of what the bill would require.

Corbett has said he believes extending the reach of Medicaid would come at an unsustainable cost to Pennsylvania taxpayers without significant changes to the program, and he suggests that federal government cannot be trusted to keep its pledges of financial responsibility.

Ohio Gov. John Kasich signed the state's $62 billion state spending plan into law Sunday after vetoing an attempt by legislators to block his administration from expanding Medicaid, according to the AP.

The Medicaid limit was among 22 line-item vetoes Kasich, a Republican, made to the bill. It would have barred the state's Medicaid program from covering the additional low-income residents allowed under the Affordable Care Act. In his veto message, he said the veto would give him and the Legislature "maximum flexibility."

Kasich's initial budget called for expanding Medicaid. But GOP leaders stripped the idea from the House version of the state spending plan in April. The House then went even further, inserting the provision explicitly blocking the expansion.

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