Reform Update: Health advocates seek clarity on how ACA affects pregnant women

(Story updated at 5:20 p.m. ET.)

Health advocates are pushing the Obama administration to address widespread confusion about how the Patient Protection and Affordable Care Act affects coverage options for pregnant women.

The Treasury Department said in a rule issued in January that Medicaid coverage that pays only for services related to pregnancies won't satisfy the law's “minimum essential coverage” requirement. However, the IRS said it will not assess penalties for women enrolled in those limited plans for 2014, because it's possible they don't know the coverage does not meet the threshold. The agency hinted that this leniency many not continue in 2015.

Without formal guidance, “there is a great deal of confusion and misinformation among state policymakers and advocates regarding the impact a woman's pregnancy status has on her eligibility for Medicaid and/or premium tax credits,” argues a joint letter co-signed by the March of Dimes, American Congress of Obstetricians and Gynecologist, Center on Budget and Policy Priorities and others (PDF). The letter was sent March 5 to senior officials at the CMS and the Treasury Department.

The Affordable Care Act allows states to retain their current limited Medicaid benefits for pregnant women, even if they extend comprehensive Medicaid benefits to other low-income adults.

This has created a situation where women who qualify for federal premium subsidies to help them buy private coverage in the exchanges are being told in some states that they're no longer eligible once they become pregnant and qualify for limited Medicaid benefits.

Women forced to leave their private plans during their pregnancies could lose access to their chosen providers, the letter states. “Of course, this thinking is incorrect as a woman is legally entitled to stay in her (Qualified Health Plan).”

The organizations are asking HHS to release formal guidance dictating that women who are eligible for premium credits continue to qualify even if they're also eligible for pregnancy-related Medicaid benefits, and that the women should be able to choose whether to purchase a qualified health plan, enroll in the limited Medicaid coverage, or both. They also ask HHS to direct state Medicaid agencies to educate women on the differences in benefits, premiums and cost-sharing.

A CMS representative did not immediately respond to a request for comment.

As of September 2013, seven states covered only pregnancy-related services for Medicaid-enrolled pregnant women: Alabama, California, Idaho, Indiana, Nevada, New Mexico and North Carolina.

Concerns similar to the ones outlined in the letter were also brought up late last year during a Medicaid and CHIP Payment and Access Commission meeting. The panel, which advises Congress on Medicaid matters, said that they would include potential fixes in its report due out March 14.

The panel is likely to recommend that Congress require states to provide the same comprehensive benefits to women who qualify for Medicaid based on a pregnancy as those who are eligible because they are parents of dependent children.

As Missouri lawmakers review a bill that would expand Medicaid, they're being told that its provision requiring beneficiaries to prove they are seeking work as a condition of maintaining coverage is unlikely to pass muster with the CMS. The bill, proposed by Republican Rep. Noel Torpey, also would ask Medicaid participants to pay a premium of at least 1% of their income. During a March 10th hearing on the bill, St. Louis University law professor Sidney Watson and Joel Ferber, director of advocacy at the Legal Services for Eastern Missouri, told lawmakers were told that the Obama administration was unlikely to approve a waiver that includes the work-search requirement. The CMS has yet to decide whether to grant a waiver to Pennsylvania, where GOP Gov. Tom Corbett included a similar work-search provision in the state's Medicaid proposal.

Jails in the 25 states that are expanding Medicaid are taking advantage of the new eligibility policies and are enrolling their inmates in the program. Many of the incarcerated population are single, childless adults, who until now have been ineligible for Medicaid in most states. Even though Medicaid will not cover day-to-day healthcare provided in jail, it will cover external hospital stays beyond 24 hours, potentially saving the institutions millions each year, correctional officials say. Inmates can keep their Medicaid coverage once they get out. Ex-cons have disproportionately high rates of chronic diseases, especially mental illness and addictive disorders. Healthcare experts estimate that up to 35% of Americans newly eligible for Medicaid under the federal healthcare law have been involved with the criminal justice system, according to a report in the New York Times.

Follow Virgil Dickson on Twitter: @MHvdickson