By Lauren Flynn Kelly
With the aim of expanding health care coverage and affordability for residents who would not otherwise qualify for Medicaid or federal subsidies to purchase Affordable Care Act marketplace coverage, several states are exploring the concept of allowing people to buy into their Medicaid programs. New Mexico may be the furthest along in that process, having commissioned a two-part study to seriously consider the financial implications of four different Medicaid buy-in scenarios.
According to the report produced by Manatt Health, “Evaluating Medicaid Buy-In Options for New Mexico,” Medicaid is the largest payer in the state, covering more than 40% of the state population. By contrast, the BeWellNM marketplace covers about 50,000 individuals, or 2% of the population. While marketplace coverage may be affordable for some, there are various reasons why eligible individuals are opting out, such as rising premiums and cost-sharing affordability, especially if they do not qualify for federal subsidies, observed the report.
The report also suggests that individuals would pay premiums and cost-sharing, but by leveraging Medicaid’s purchasing power, provider networks and reimbursement rates, the cost of buy-in coverage would be less than the cost of private coverage. That report made a qualitative assessment of four options:
(1) Targeted Medicaid Buy-In Program, where the state offers Medicaid-like coverage off the BeWellNM marketplace to those not eligible for Medicaid, Medicare or subsidized marketplace coverage.
(2) Qualified Health Plan Public Option, where the state offers a lower cost public option product on the marketplace to individuals and small employers, although it could be expanded outside of BeWellNM for people who are not eligible to purchase individual coverage.
(3) Basic Health Program, a state-offered option for individuals with incomes up to 200% of the FPL who are not Medicaid-eligible and are otherwise eligible to purchase coverage through the marketplace.
(4) Medicaid Buy-In for All, where the state offers Medicaid coverage to everyone (except those covered by Medicare) as a lower-cost option off the marketplace.
According to Patricia Boozang at Manatt, the consulting firm and its actuarial partner Wakely Consulting Group are now in the second phase of the study, working “to develop an actuarial analysis that projects the number of people likely to be covered through one or two variations on the Option 1 Targeted Buy-in model” outlined in the paper.