On December 30, 2013, the Centers for Medicare and Medicaid Services (CMS) approved Michigan’s request to amend an existing waiver to implement the Affordable Care Act (ACA) Medicaid expansion effective April 1, 2014 through the “Healthy Michigan” program.1 Under Healthy Michigan, coverage for the expansion adults will be provided through Medicaid managed care plans already under contract with the state. Michigan will provide the full range of services required for expansion adults, unlike Iowa where the recently approved waiver authorized a one-year waiver of non-emergency medical transportation.
Adults in Michigan with incomes between 100% and 133% of the federal poverty level (FPL) will have a premium obligation equal to 2% of income. All expansion adults will have-cost sharing obligations and be eligible for healthy behavior incentives. The key features of the Healthy Michigan program include:
Eligibility. All individuals in the new adult group are eligible for Healthy Michigan.
Plans. Healthy Michigan provides coverage through the state’s existing network of Medicaid managed care plans. Michigan did not seek to use premium assistance to purchase qualified health plan coverage through the Marketplace.
Benefits. Under the ACA, covered benefits for newly-eligible adults in Medicaid (the Alternative Benefit Plan), are based on ACA-defined Essential Health Benefits with certain additional requirements, including early periodic screening, diagnosis and treatment (EPSDT) for 19- and 20-year-olds and non-emergency transportation. Healthy Michigan will provide the full scope of benefits covered under the Alternative Benefit Plan.
Premiums. Healthy Michigan enrollees with incomes from 100% to 133% of the FPL will be required to pay a monthly premium of 2% of income—the same amount they would have been required to pay had they purchased coverage through the Marketplace with premium tax credits. However, Medicaid coverage cannot be denied if an enrollee fails to pay premiums.
Cost Sharing. All Healthy Michigan enrollees will be required to make cost-sharing payments in amounts consistent with federal Medicaid law. Healthy Michigan enrollees will make contributions to an account maintained by their health plans based on their prior six months of utilization. Providers will notify enrollees of copayment amounts when delivering the service, but enrollees will be billed for such copayments on a quarterly basis, rather than at the point of service. Enrollees cannot be denied coverage or services if they fail to make cost-sharing contributions.
Healthy Behavior Incentives. Healthy Michigan enrollees may have their cost-sharing and premium obligations reduced if they adopt specified healthy behaviors. Michigan must submit for CMS approval a draft protocol outlining the healthy behavior incentives. The state must demonstrate that the healthy behaviors are data driven and that it engaged stakeholders when developing the healthy behaviors.
Commonalities and Differences between the Michigan and Iowa Programs
The Healthy Michigan program shares several common features with Iowa’s expansion waiver, approved by CMS on December 10, 2013. Under both states’ waivers, enrollees with incomes from 100% to 133% of the FPL are required to make premium contributions of up to 2% of income, but coverage may not be denied based on failure to pay. Additionally, both waivers use financial rewards to encourage enrollees to engage in healthy behaviors. In Michigan, individuals engaging in healthy behaviors can have their premium and cost-sharing reduced, while in Iowa, healthy behaviors can reduce premium requirements.
There are, however, some important differences between the two programs. Iowa uses premium assistance to purchase qualified health plans for Medicaid enrollees, while Michigan provides coverage through its traditional network of Medicaid managed care plans. Also, Iowa uses premiums but no significant cost-sharing, while Michigan uses both premiums and cost-sharing.
Notably, because the Michigan expansion will not go into effect before April 2014, Michigan must establish protocols to transition to Medicaid individuals with incomes between 100% and 133% of the FPL who enroll in QHPs during Marketplace open enrollment. Michigan also must submit for approval protocols detailing the operations of the cost-sharing accounts and healthy behavior incentives, including: (i) standards and evidence-based rules to ensure that accounts are debited and credited accurately and (ii) a strategy for noticing and educating providers and enrollees on program rules. Michigan must submit these protocols at least 90 days prior to implementation of the cost-sharing accounts or healthy behavior incentives. In addition, the implementation plan must include a phased approach, beginning with beneficiaries with incomes above 100% of the FPL.
To view a chart comparing key features of current state waivers applicable to expansion adults, click here. Manatt will continue to monitor developments in Medicaid expansion and keep you informed.
1 Michigan amended the waiver known as the “Medicaid Nonpregnant Childless Adults Waiver [Adult Benefits Waiver]”, which provided coverage for nonpregnant, childless adults aged 19-64 with incomes below 35% of the federal poverty level. The Adult Benefits Waiver will remain in effect through March 31, 2014.