Casting Call: Medicaid’s Role in the Exchange

Will Medicaid play a starring role in the state health insurance Exchanges? Or will it be a supporting actor or even an “extra”? These questions seem to be coming up a lot lately.
Andy Allison, executive director of the Kansas Health Policy Authority and president of the National Association of Medicaid Directors, recently spoke at the National Association of Insurance Commissioners (NAIC) hearing on Exchanges. He gave the regulators some practical advice about partnering with Medicaid in implementing the Exchange. He suggested that regulators:

1. Bring Medicaid into the conversation when negotiating with health plans. He noted Medicaid’s expertise in plan contracting, standardization, and other plan requirements. A large majority of Medicaid enrollees are in managed care plans and Medicaid programs have great experience in these matters.
2. Lean on Medicaid to set up the enrollment program for health Exchanges. While eligibility and enrollment is an ongoing challenge for the Medicaid program, it is more manageable for Medicaid than it would be for insurance departments that are new to these tasks. Also, given the expense of setting up these systems, he noted that Exchanges simply cannot afford to do this on their own.

I also gave a presentation at the NAIC Exchange hearing on the findings from a new Maximizing Enrollment paper that reminds states that Medicaid will soon be the second largest source of coverage for Americans. The paper, “Medicaid’s Role in the Exchange: A Roadmap for States,” is authored by Deborah Bachrach, New York’s former Medicaid Director, and her colleagues at Manatt, Phelps & Phillips. The authors point out that Medicaid is one of four “state health subsidy programs” described in the ACA. Given Medicaid’s prominent role in the health insurance market, the authors urge states to consider how best to integrate Medicaid into the coverage options and infrastructure of the Exchange. The paper describes four areas where a state can build on Medicaid’s structure, experience, and systems in creating their Exchanges: eligibility and enrollment; health plan contracting; benefit design; and infrastructure.
States that are farther along in Exchange planning provide different approaches:

• In the Massachusetts Connector, Medicaid takes center stage in the Exchange’s infrastructure. The Exchange relies on Medicaid to perform eligibility and enrollment functions for the subsidized insurance options. The Medicaid Director, along with other agency heads, also sits as an ex officio member of the Exchange Board. This is described in more detail in a recentpaper by the Georgetown University Health Policy Institute. Massachusetts is currently considering how Medicaid can be better integrated into the existing coverage options.
• In Virginia, Medicaid is likely to be a key partner. Gregg Pane, Director, Virginia Department of Medical Assistance Services, spoke about Medicaid’s role in their Exchange on a recent Maximizing Enrollment webinar . He said that the Virginia Health Reform Initiative Advisory Council has included Medicaid as a partner in planning the Exchange and is working closely with Medicaid in developing an eligibility portal and establishing electronic health records.
• Utah, however, treats Medicaid more as an “extra.” Norman Thurston, Health Reform Implementation Coordinator for the State of Utah, also spoke at the NAIC Exchange hearing and remarked that the Utah Exchange had a different vision for Medicaid than what Andy Allison presented. He said that government programs like Medicaid currently have and will continue to have a much more limited role in their state’s Exchange. The Exchange website currently hosts a “health services” page that provides links to Medicaid, CHIP, and Utah’s Premium Partnership program.

Does your state have a vision for Medicaid’s role in the Exchange? Please share it with us and other states by posting your comments on your state page at State Refor(u)m. To engage in a cross-state discussion about this milestone, visit State Refor(u)m’s national discussion page.