The Health Reform Legislative Task Force is meeting today to continue listening to recommendations from the Stephen Group (TSG) on the future of the private option and other matters related to health care reform in Arkansas. TSG, the state’s million-dollar consultant, recommends keeping the private option around. In addition to providing health insurance for more than 200,000 Arkansans — cutting the state’s uninsured rate in half — TSG projects that the policy will save hundreds of millions to the state’s budget, boost the state economy, and save hospitals more than $1 billion in reductions to uncompensated care.
But TSG also recommended some changes to the policy, most of them apparently geared toward making it more palatable to Republican lawmakers. Last week I covered whether these changes would be able to get federal approval; today let’s take a look at the policy merits. These tweaks — programs for work and wellness, premiums and cost-sharing, and asset tests, to name a few — may be necessary to attract a supermajority in the Obamacare-hating legislature, but they risk adding layers of bureaucratic red tape to the program and potentially creating barriers that threaten access to care for the state’s poorest citizens.
Red state red tape
When the Supreme Court ruled in 2012 that states could decide for themselves whether to go forward with Medicaid expansion or not, they gave red states a little bit of leverage. While some states — including many of our neighbors in Dixie — simply refused the billions of dollars in Obamacare money to expand the program, states like Arkansas have sought Republicanized versions of Medicaid. This is the direction that TSG’s recs lead: just a little bit more Republican. The trouble is that trying to squeeze GOP talking points into the Medicaid program can end up making the program more complicated, confusing, and costly.
“The fundamental question remains about the administrative complexity of coming up with all of these pieces and moving parts and whether they achieve their objectives,” said Joan Alker, executive director of Georgetown University’s Center for Children and Families and an expert on Medicaid waiver.
Keep in mind that the state is already struggling to administer the required features of the existing program — the eligibility and enrollment system was more than a year late for some beneficiaries and its implementation has been an ongoing disaster. The recommendations from TSG imagine adding systems to track wellness practices in beneficiaries, place and track beneficiaries in work programs, and impose premiums and cost-sharing on beneficiaries who fail to participate in those programs. All of this will add administrative costs and bureaucratic complexity. And all of this will have to be administered by state agencies whose attempts to communicate with beneficiaries this year have been shockingly inadequate.
Based on the experience of other states that have gotten permission to impose small premiums, Arkansas will likely have to establish procedures to deal with hardship exemptions, and Medicaid law mandates certain practices regarding notice before people lose coverage, an appeals process, etc. Republicans are seeking to drape the program in red tape in order to eke out a few bucks from the poor. It’s worth keeping in mind what the objective of the Medicaid program is in the first place: ensuring that our poorest citizens have health coverage and access to care. Trying to impose nominal premiums on poor beneficiaries is a money-loser and an administrative nightmare, and it’s counterproductive to the goals of the program. Arkansas GOPs may be hoping that this process might operate more smoothly given the state’s privatized system, but keep in mind that the insurance companies themselves won’t be motivated to enforce and collect these premiums. They’d rather keep their customers.
Other recommendations also add administrative burden: TSG suggests creating a more intensive system for determining whether beneficiaries are medically frail and a new program to cover certain Medicaid-eligible employees under employer-sponsored insurance.
The biggest red-tape headache of all? TSG suggests an asset test. Under Obamacare, the Medicaid program determines eligibility only via family income. Previously, states used to also impose asset tests (property, etc.) on beneficiaries that slowed down enrollment and created headaches for state agencies, a massively inefficient and costly system in place to identify a scattering of beneficiaries with substantial assets. Obamacare stopped the asset tests for Medicaid because they were bad policy; TSG is offering up some red meat to GOP lawmakers in suggesting their return.
“Asset tests are not allowed and it’s just really an administrative disaster,” Alker said. “It can affect so few people and it’s so much red tape to check on that, it creates barriers to enrollment. That’s very terrible policy. It’s a solution in search of a problem that will create more administrative barriers.”
More red tape means barriers to access to care
All of the challenges described above create administrative difficulties for state agencies, but they also create hurdles and hassles for beneficiaries. Making poor Arkansans jump through additional hoops isn’t just unnecessarily burdensome, it can also slow down enrollment or stop people from signing up in the first place. Gaps in coverage — which seem almost inevitable given the complicated processes that TSG suggests putting in place — can impede access to care for the state’s neediest citizens. Meanwhile, studies have found that charging premiums to poor people deters enrollment and charging co-payments deters them from getting needed care. Even small, waivable premiums can make eligible beneficiaries reluctant to sign up (Indiana, in certain ways a model for TSG’s recommendations, still faces questions about the impact of its premiums on enrollment).
Arkansas, by the way, has some experience in the way that administrative burden can impact access to care: the fiasco with the state’s eligibility and enrollment system, which kicked tens of thousands of eligible beneficiaries off of coverage because of poor outreach and overwhelmed state agencies, led to nightmare scenarios in which poor beneficiaries were unable to get medication they needed.
Allergic to outreach
The gist of TSG’s idea is to create an elaborate carrot-and-stick system pushing beneficiaries toward healthier practices and toward full-time jobs. But beneficiaries will only be incentivized if they have a clear sense of how the program works. Throwing all of the moving parts suggested by TSG together will lead to a three-tiered coverage system: traditional Medicaid for the medically frail (with a more complicated system for assessing who qualified); private coverage; and private coverage with additional benefits for beneficiaries following the wellness and job training programs. And that’s not even getting in to the premium assistance for Medicaid-eligible employees with work-based coverage. There will be requirements for setting up prompt appointments with a primary care physician, as well as other preventive care practices, for beneficiaries who may have health insurance for the first time in their adults lives. DHS will have to track all of this, and beneficiaries will need somewhere they can turn if they are confused about exactly what is required, when the deadlines are, etc. There will be wellness “report cards” and there will be a variety of job training or placement programs (presumably enough to meet the demand!). Beneficiaries will need to know when and where these programs are available and what the requirements are (and these programs will need to be available immediately for beneficiaries seeking to meet the requirements). There will be a system in place for beneficiaries to prove participation in those programs, and there will be ongoing means testing to determine whether beneficiaries have a job, got a new job, are still in their job, etc. There will be paperwork requirements to prove employment. DHS will need a mechanism to check on beneficiaries’ employment status, but also an easy mechanism for beneficiaries to report changes in status. Meanwhile, if beneficiaries make a mistake in navigating all of this, they will need to deal with paying premiums. That means systems in place for appeal, for late payments, etc. They will need information about how to get back on the program after premiums are imposed so that the premiums stop (which will surely require more paperwork to prove they have gone back and fulfilled their wellness or job program requirements).
That sounds confusing to me! And none of it means anything unless beneficiaries have a clear understanding of how the incentives are supposed to line up (and that programs work smoothly enough that the incentives really are clear and prompt). All of this may prove challenging to navigate, particularly for resource-strapped, low-income citizens, many of them with little or no experience having health insurance.
Here’s where a robust outreach program could help, educating beneficiaries on their options, offering guidance along the way, developing consistent mechanisms for ongoing communication, establishing a smooth response system for questions, using community outreach workers to speak with people directly on the ground — in community centers, in churches, in clinics, in their homes…well, I’ll stop here. Because the Arkansas legislature is so allergic to outreach for Obamacare beneficiaries that they banned all state-appropriated funds for outreach work related to the Affordable Care Act, even if it was entirely paid for by federal grants. There is zero evidence that the legislature has any interest in providing the resources for outreach and education necessary to actually implement a significantly more complicated program.
This sets up a trainwreck: a confusing system and no resources in place to help people navigate it.
Punishing the poor
If beneficiaries don’t participate in the required programs, TSG suggests imposing premiums on them, and if they fail to pay their premiums, they’ll be kicked off of coverage. These premiums would be small — likely somewhere in the $5 to $20 per month range. But those small premiums can be a big problem for very poor beneficiaries — and TSG seems to imply that the premiums could be applied even to beneficiaries without income who fail to participate in the work programs.
Let’s say that a beneficiary is a full-time caretaker for a family member and isn’t able to participate in a job training program. Or let’s say that a beneficiary gets confused about the wellness requirements and misses a deadline. These beneficiaries might then face premiums that they struggled to pay. If they lost coverage, they might stop getting needed care that they couldn’t afford — or face medical bills they couldn’t pay if they did seek care. Again, this is counterproductive to the actual goals of the Medicaid program: providing a safety net of health coverage for the poor. It’s also worth noting that there is no evidence that wellness programs or work programs in Medicaid save money, substantially improve wellness, or increase employment.
There’s more. On top of losing coverage if beneficiaries fail to pay their premiums, TSG suggests a six-month lockout if beneficiaries fail to pay their premiums — in other words, they would be disallowed from signing back up for coverage, even if they were able to pay the premiums or participate in the required programs. It’s hard to see the policy objective here — it’s purely punitive (it’s highly unlikely that the lockout itself would shift the needle on incentives in terms of whether beneficiaries participated in the programs or paid premiums on time). There is a kind of moral argument here: if beneficiaries fail to pay, they deserve to be punished. But what happens when people are locked out? They fail to get care they need, or they seek care and don’t have the ability to pay. Which brings us to…
Who picks up the tab?
It’s worth remembering what the actual end game is for the “stick” provisions of TSG’s suggestions. The end result of kicking people off of coverage, or locking them out of coverage for six months, is to increase the number of Arkansans without insurance. That means substantial increases in uncompensated care bills for hospitals and for state government, not to mention the potential health consequences for the uninsured. You’re back to square one.
The irony of these proposed reforms is that in order to give the Medicaid program a more conservative imprimatur, Republicans may end up making it more bureaucratic, more intrusive, and potentially more expensive. Many of the ideas put forward by TSG serve GOP talking points, but face major questions about cost effectiveness and about whether they are compatible with the goals of the Medicaid program.
“We see here a kind of grab bag of all of those kinds of ideas that are being tossed around in the handful of states that are doing expansion by waiver,” Alker said. “I think the main risk is creating barriers [for beneficiaries] and creating additional bureaucracy. At the end of the day, [these proposals] involve the government making certain assumptions about you and your choices. That’s something a lot of the proponents need to think about.”
They also might undermine goals that policymakers on both sides want, she said. “Yes, it’s better if people work,” she said. “We can all agree on that. But I would argue that having continuous health coverage makes you more likely to be able to work, not less.”