The Affordable Care Act: Opening the Door to 21 st -Century Public Benefits? The Coalition to Promote Access & Opportunity November 10, 2010 Webinar Stan.

The Affordable Care Act: Opening the Door to 21st-Century Public

Benefits?

The Coalition to Promote Access & Opportunity

November 10, 2010 Webinar

Stan Dorn, Senior Fellow

The Urban Institute

Washington, DC

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Overview

Basic perspective Affordable Care Act Other public benefits

Part I

Basic perspective

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Key 21st-century advances Computers

Increasingly, the government has data showing who qualifies for benefits

Behavioral economics People are not entirely rational If consumers must do more to apply, fewer will claim benefits

Implication: whenever possible, use data rather than application forms to qualify people for benefits Why deny aid until the consumer tells the government what it

already knows?

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It’s not just low-income people and public benefits

Percentage of eligible workers who participate in tax-advantaged retirement accounts

10%

33%

90%

Independent enrollment inIRA

Firms where new hiresenroll in 401(k) only after

completing a form

Firms where new hires gointo 401(k) UNLESS they

complete an opt-out form

Sources: Etheredge, 2003; EBRI, 2005; Laibson (NBER), 2005.

Trade-offs The traditional trade-off with simplifying

applications— Simplification’s advantages

o Less red tape for consumers, hence more participation o Lower administrative cost for government

Simplification’s disadvantage: greater risk of error

Data-based eligibility ends the trade-off All the advantages of simplification PLUS Greater protection of program integrity

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GAO agrees“Improved information systems, sharing of data between programs, and use of new technologies can help programs to better verify eligibility and make the application process more efficient and less error prone. These strategies can improve integrity not only by preventing outright abuse of programs, but also by reducing chances for client or caseworker error or misunderstanding. They can also help programs reach out to populations who may face barriers. One strategy involves sharing verified eligibility information about applicants across programs. Data sharing prevents applicants from having to submit identical verification to multiple programs for which they may be eligible, and it can also speed up the sometimes-lengthy application process. In addition, data sharing allows programs to check the veracity of information they receive from applicants with other databases.”

Government Accountability Office, “Means-tested Programs: Information on Program Access Can Be an Important Management Tool,” 3/05, GAO-05-221

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Example: Medicare Part D Low-Income Subsidies

1/2006, Part D coverage of prescription drugs began Included low-income subsidies (LIS)

By 6/16/06, 74% of eligible beneficiaries received LIS Most qualified based on data matches with state

Medicaid programs or SSA People who received Medicaid last year automatically

get LIS this year Now, 81% of eligible beneficiaries receive LIS

Part II

The Patient Protection and Affordable Care Act (ACA)

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Health coverage subsidies in 2014 and beyond

Medicaid and CHIP Medicaid up to 138% of the federal poverty level (FPL) for

children and adults CHIP continues at 2009 eligibility levels (for awhile)

Health insurance exchanges in each state—places where individuals and firms can enroll into health plans States run the exchange directly or contract with a non-profit The federal government runs the exchange if the state chooses

not to (or if HHS determines the state can’t do a decent job) Individuals covered in the exchange receive subsidies

up to 400% FPL

Eligibility determination and enrollment

1 application form for Medicaid, CHIP, and subsidies in the exchange Disclosure authorization as an alternative

Can file on-line, by mail, in person, by phone Medicaid, CHIP, exchange work together behind the

scenes to determine eligibility seamlessly “Modified adjusted gross income”

Note: 75% of uninsured < 100% FPL file tax returns Data-matching with numerous sources

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I.T. Infrastructure Federal reference software application model

Consumers’ identifying information is input Software gathers data from multiple federal & state sources,

applies business rules to determine eligibility Common definition of core data elements

Example: is DOB 1 field or 3? State eligibility systems need “translation” routines to and from

this common definition Funding sources for states

90% FMAP for Medicaid Exchange grants

Whither Medicaid?

In exchange, the information superhighway: Eligibility criteria fit data from tax returns Year-end reconciliation addresses changing circumstances

With Medicaid—muddy cow paths? Do eligibility criteria fit available data?

o Ambiguity around “point in time” eligibility: can states deny eligibility until applicants produce pay stubs?

o “Newly eligible adults” – how to show an adult would have been ineligible under 2009 rules? Add back asset tests for all applicants?

At renewal, can states terminate Medicaid for people who fail to return paperwork, even if data show continued eligibility?

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Part III

Other public benefits

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Shorter-term strategies Ensure that Medicaid and the ACA succeed,

providing a model for other benefits Give Medicaid enrollees a chance to obtain

other benefits Connect other programs to the ACA’s IT system

Explicit part of ACA Section 1561 Potentially allow NGOs to gain access Key:

o Consumer authorizationo Data-sharing agreements and procedures to limit use and

protect confidentiality and data security

Excerpts from ACA Sec. 1561 HHS to “develop interoperable and secure standards and protocols that

facilitate enrollment of individuals in Federal and State health and human services programs.”

Such standards and protocols “shall allow for” “Electronic matching against existing Federal and State data, including vital records,

employment history, enrollment systems, tax records, and other data determined appropriate by the Secretary to serve as evidence of eligibility and in lieu of paper-based documentation”

“Simplification and submission of electronic documentation, digitization of documents, and systems verification of eligibility”

“Capability for individuals to apply, recertify and manage their eligibility information online, including … at points of service, and other community-based locations” etc.

HHS “may require, as a condition of receiving Federal funds for the health information technology investments, that States or other entities incorporate such standards and protocols into such investments”

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Longer-term: eligibility criteria that fit available data If another program has already found someone to have

income below a certain level, why force another program to reexamine that same issue? Express Lane Eligibility for child health; Categorical eligibility for SNAP; Direct Certification of eligibility for NSLP; etc.

Base eligibility on prior-year tax data Medicare Part B means-tested premiums; College student aid; etc.

Rosetta Stone income methodology? Trade-off: eligibility rules less targeted to need

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Conclusion

The ACA’s IT infrastructure offers enormous potential to streamline enrollment into multiple public benefits

Directions for action Near-term: helping ACA succeed with Medicaid Near- and medium-term: connecting other benefits to

ACA’s IT infrastructure Longer-term: redefining public benefit eligibility in

terms that fit available data

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