Medicaid and the new health insurance exchanges: Do you know how they interact?
By Legal & Regulatory Affairs staff
The Affordable Care Act (ACA) requires that almost all individuals have health insurance by 2014. Implementation of the ACA may lead to the enrollment of an estimated 30 million 1 uninsured individuals who will be newly eligible for health insurance through Medicaid and the health insurance exchanges (HIEs). This article explains how Medicaid programs and HIEs interact.
The ACA allows for the expansion of Medicaid eligibility to cover everyone under the age of 65 who is not already eligible for Medicaid, with income up to 133 percent of the federal poverty level (approximately $14,800 for a single individual or $29,700 for a family of four). As of July 2013, 24 states are moving forward with the expansion, 21 states are not planning to expand their programs, and six states have ongoing debates on the issue. 2
Medicaid is the single biggest payer for mental health services in the United States. The expansion of Medicaid services will create increased demand for mental health professionals and psychologists. However, there are barriers to psychologists’ ability to serve Medicaid patients. These barriers, which vary from state to state, include:
- A complete bar on psychologist Medicaid participation in 17 states
- Restrictions on to whom, how often, and where psychological services can be provided
- Low reimbursement rates
- Many states' reluctance/refusal to cover health and behavior (H&B) codes
- Prohibitions on reimbursing students/interns
Health Insurance Exchanges
Under the ACA, each state must establish and implement a “health insurance exchange” (HIE). If a state chooses not to design its own, the federal government will step in and run the HIE in the state. Beginning in 2014, all state-level exchanges must be operational.
Individuals who are not eligible for Medicaid with incomes up to 400 percent of the federal poverty level (approximately $88,000 for a family of four) can receive subsidies through tax credits to enroll in coverage through the health insurance exchanges. This insurance market reform is intended to improve access to health insurance for millions of health care consumers.
Interaction of Medicaid programs and Health Insurance Exchanges
The expansion of Medicaid and the development of HIEs are meant to work together to improve access to health care coverage. The ACA calls for health insurance exchanges to have a single, streamlined application for consumers, thereby allowing consumers to receive eligibility determinations for multiple programs no matter where the application is submitted.
The application process is meant to allow each exchange to determine an individual’s eligibility for enrollment in a Qualified Health Plan (QHP, certified as such by federally recognized accreditors) or to assess/determine eligibility for Medicaid and the Children’s Health Insurance Program (CHIP).
It is important that public and private sector health systems work well together since many individuals might move between Medicaid coverage and HIE (private sector) coverage due to fluctuations in income and changes in family composition. This movement between systems could cause both financial consequences and disruptions in health and mental health care delivery for the individuals involved.
Research that looked at income data levels from 2004-2011 estimates that approximately 35 percent of adults would have experienced a shift in eligibility from Medicaid to the exchange within six months and 50 percent would have experienced a change within one year. 3 On occasion, psychologists may encounter certain patients whose coverage may shift between Medicaid and QHP coverage through the exchanges during a plan year; therefore, it is important for psychologists to routinely confirm health care coverage status and details with patients.
What can psychologists do?
The large influx of newly-ensured people into the health care system will call for larger numbers of providers, including psychologists. It is important that psychologists adapt to these changes in order to successfully engage with consumers, Medicaid and the health insurance exchanges. Consider taking the following steps:
- Communicate with your state psychological association to determine what the organization is doing to position psychologists to better serve consumers in Medicaid and the health insurance exchanges in your state.
- Check your state’s HIE website to determine which insurance plans are being considered for inclusion in the exchanges and to determine if you are on those panels. A master list of state websites is available on the CMS website.
- Participate in plans in both Medicaid (where applicable in your state) and the exchanges in order to ensure continuous care for your patients who may fluctuate between the systems.
- If your state does not allow for the provision of psychological services within Medicaid, communicate with your state psychological association about advocating for your state Medicaid office to open up those services to consumers and for psychologists to become eligible providers of psychological services for Medicaid beneficiaries.
1 Congressional Budget Office, Estimates for the Insurance Coverage Provisions of the Affordable Care Act. Updated for the Recent Supreme Court Decision (Washington, D.C.: Congressional Budget Office, July 2012)
2 Status of State Action on the Medicaid Expansion Decision, as of July 1, 2013. Kaiser Family Foundation. Accessed on July 31, 2013
3 Benjamin D. Sommers & Sara Rosenbaum. Issues in Health Reform: How changes in eligibility may move millions back and forth between Medicaid and insurance exchanges. Health Affairs, 30, no.2 (2011): 228-236.