Transcript Beginning with the end in mind: Towards a high

Express Lane Eligibility
Prepared for the National Academy for State
Health Policy
Stan Dorn
The Urban Institute
May 14, 2009
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Topics to discuss
• Why this matters
• What’s the thinking behind Express Lane
Eligibility (ELE)?
• Promising opportunities to use ELE
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1. Why this matters
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Most uninsured children are eligible for
Medicaid or CHIP
Uninsured children, by eligibility for Medicaid
and CHIP: 2004
Eligible for CHIP
22%
Eligible for
Medicaid
52%
Ineligible for
Both
26%
Sources: Dorn, et al., Feb. 2009, applying eligibility simulation model described in Dubay, et al., 2007.
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New financial incentives in CHIPRA
• Increased CHIP enrollment can
raise future CHIP allocations
And lower enrollment can cut
future allocations
• Increased Medicaid enrollment
can qualify for performance
bonuses
So long as state implements 5 of
8 “best practices,” which include
ELE
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2. Express Lane Eligibility (ELE): one
rationale
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The value added question
• When a family has already shown low income by
filling out forms for one government agency, what
is the value of requiring it to complete a similar
form for a different government agency?
• How does that value compare to the
consequences for:
Enrollment;
Household convenience; and
Administrative costs?
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The impact of inertia and procrastination on
human behavior
Percentage of eligible workers who participate in
tax-advantaged retirement accounts
90%
33%
9%
Independent enrollment in
IRA
Firms where new hires
enroll in 401(k) only after
completing a form
Firms where new hires go
into 401(k) UNLESS they
complete an opt-out form
Sources: Sailer and Holden, 2005; Laibson (NBER), 2005.
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3. Potentially promising applications of
Express Lane Eligibility (ELE)
a) State income tax forms
b) Food Stamps
c) National School Lunch Program
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State income taxes
An extraordinary opportunity to locate
uninsured children
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Uninsured children who qualify for Medicaid or
CHIP, by legal requirement to file federal income
taxes and eligibility for federal EITC: 2004
Neither legally
required to file nor
eligible for EITC
9%
Not legally required
to file, but eligible
for EITC
12%
Source: Dorn, et al., Feb. 2009.
Legally required to
file federal income
tax returns
79%
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Among various groups of uninsured children, the
estimated percentage whose families filed federal
income tax returns: 2004
Families file returns
100%
9.3%
12.8%
90.7%
87.2%
All
Eligible for
Medicaid
Families do not file
5.5%
10.6%
94.5%
89.4%
Eligible for
SCHIP
Eligible for
Either Program
75%
50%
25%
0%
Sources: Dorn, et al., Feb. 2009.
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What about state income tax forms?
• What’s your state’s minimum income threshold
for required tax filing?
• Does your state provide any refundable credits
(e.g., an EITC or child care credit that
supplements the federal credit)?
• Remember—if income is withheld from a
paycheck, the worker may need to file a state tax
return to get a refund
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How it could work
1.
On tax form:


Require parents to identify their uninsured children
Let parents request disclosure of tax data to the state’s health
agency

2.
Very important step. Without it, parents must file 2 forms, an income tax
form and a later health coverage form.
o
In Iowa, the state mailed application forms to parents who identified
their children as uninsured on state income tax returns. Only 10%
applied.
Grant income-eligibility based on gross income (or AGI) and household
size on income tax form
3. Qualify children as citizens based on SSA data match (starting in
4.
2010)
Determine immigration status

Intensive application assistance to obtain immigration evidence



Can obtain in the enrollment phase
In the meantime, can provide presumptive eligibility (PE) based on income
alone
Possible ELE based on SSA determination of permanent legal
residence when issuing SSN
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How it could work, continued
5.
6.
If child is not eligible based on ELE, CHIPRA requires
the family to have a chance to submit a standard
application
Collecting any remaining paperwork
 Can direct families to on-line forms

CHIPRA allows electronic signature
 Can use CBOs, facilitated enrollers
 In a managed care state, can use MCOs



Let the family pick an MCO
If the family doesn’t act, the state chooses an MCO
Once the MCO has been chosen, the MCO must collect the
final paperwork before capitated payments start
o Key: no MCO contact until a plan is chosen
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Possible concerns
•
•
•
•
Parents may mislabel children as uninsured
Confirm by running data match against Medicaid/CHIP files,
perhaps Medicaid TPL records of private coverage
Revenue agency may resist changing tax return
IA, MD, NJ already use return to ask re children’s coverage
MA uses return to request proof of coverage for adults
Revenue agency may be concerned about violating the
confidentiality of tax data
Consent to disclosure should address those concerns
Self-employment income
For tax purposes, can deduct from even gross income
 Meals;
 Entertainment;
 Depreciation; etc.
Could add back these deductions in calculating gross income
or adjusted gross income, for purposes of ELE
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Final concern: tax information is so last year!
• CHIPRA expressly allows using tax returns for ELE
Can only use within a “reasonable period,” defined by state
• Multiple federal programs already do this
Prior-year tax returns establish current-year eligibility
What if your situation changed?
If income rose this year, eligibility not reduced until next
year
If income fell this year, can immediately apply for extra help
No application required if you file a tax form (although an
application process is available as a fall-back)
Once exception: applications are needed for college
student aid. However, President Obama proposes to
replace them with a “check-box” on the federal income
tax return.
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Income tax returns and eligibility for various
federally-funded, means-tested benefits
Tax return for
Establishes
eligibility during
Medicare Part B
premium subsidies
2007
Calendar year
2009
Student aid for
college
2007
School year
2008-2009
Rebate checks from
2008 stimulus
legislation
2007
2008
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Food stamps – basic eligibility rules
•
•
Income eligibility
 130 percent of FPL in gross income
 100 percent of FPL in net income
Must be citizen or legal permanent resident (but
no 5-year bar)
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How food stamp ELE could work
1.
Identify uninsured children


2.
Match food stamp eligibility files with Medicaid and CHIP files
to identify food stamp children not receiving health coverage
Permitted by pre-CHIPRA food stamp law
Let parents opt out

Send notice explaining that, unless they object, data from their
children’s food stamp files will be used to determine
potential eligibility for health coverage
3.
Determine eligibility

Automatically find, via ELE, that



4.
All food stamp children are income-eligible for Medicaid;
All immigrant food stamp children are legally residing in the U.S.,
for purposes of Medicaid
o Maybe not in a state with a 5-year bar for newly arrived
immigrants
Establish citizenship via SSA data-match (2010 and later)
Parents must consent before enrollment
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Trade-offs
• Potential advantages
Huge efficiency gains. Almost no value is added by requiring a
separate health application. Among uninsured food-stamp
children, only 1/10th of 1% are ineligible for Medicaid and CHIP.
 Statistic applies to states that use CHIPRA to cover recently arrived
immigrant children
 In other states, almost all uninsured, citizen children receiving food
stamps qualify for Medicaid and CHIP under existing law
Matchable, accessible data
• Potential disadvantages
Not enormous reach: 12.4 percent of eligible, uninsured children
received food stamps in 2004
41% of food stamp children without Medicaid or CHIP are
privately insured
 Need to do data match with information about private coverage
Some questions about categorically eligible Food Stamp
recipients – good argument for applying ELE, but no CMS ruling
 Families with TANF, SSI, GA can automatically get Food Stamps
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National School Lunch Program
(NSLP): eligibility
•
•
Income eligibility based on gross income
 Up to 130 percent of FPL, free school lunch
 130-185 percent of FPL, reduced-price lunch
No immigration status requirements
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How ELE could work with NSLP
1.
On NSLP application form, parents can:


2.
3.
If children receive free lunches, use ELE to automatically
qualify them as income-eligible for Medicaid
If children receive reduced-price lunches, either


4.
5.
Identify any uninsured children; and
Consent to disclose NSLP and other data to determine
children’s eligibility for free or reduced-cost health coverage
Use NSLP income-determination to establish income-eligibility
for Medicaid/CHIP or
Provide PE and target children for intensive assistance to
determine ongoing eligibility
For anything beyond PE, state must establish that NSLP
children are citizens or legal immigrants
Collection of remaining paperwork

Can follow income tax approach
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Trade-offs
• Potential advantages
Broad reach: 59 percent of uninsured, low-income children
live in families who participate in NSLP
• Potential disadvantages
In many states
Limited digitization of matchable enrollment records
“District-by-district” implementation is time consuming
Schools have other priorities
Illinois law bases a district’s receipt of poverty-related school
financing on, among other things, Medicaid and CHIP receipt
Error rates
For free lunches, not a problem. NSLP errors do not extend
health coverage to very many otherwise ineligible children.
That’s because maximum income eligibility for free lunches is
far below CHIP income limits.
For reduced price lunches, NSLP errors are more
consequential.
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Recipients of free and reduced-price school
lunches, by income-eligibility for health
coverage (based on actual income)
Children receiving Children receiving
free school
reduced-price
lunches
school lunches
Income-eligible for 81%
49%
Medicaid
Income-eligible for 14%
38%
CHIP
Income too high
4%
13%
for both programs
Total: 100%
100%
Source: Dorn, April 2009.
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