Proposed Iowa Medicaid change would eliminate months of retroactive benefits

By Clark Kauffman
The Des Moines Register, August 30, 2017

Currently, Medicaid has a retroactive-eligibility provision that provides payment for health care services that were delivered in the three months leading up to a person being formally declared eligible for Medicaid.

It’s intended to ensure that health care providers accept patients even when those individuals have yet to apply for Medicaid. It often comes into play when people are hit with an unexpected health crisis and need immediate admission to a care facility. With retroactive payment, the facilities have some assurance that Medicaid will eventually pay for the care that pre-dates the decision on eligibility.

The Iowa Department of Human Services has asked the federal Centers for Medicare and Medicaid Services for permission to eliminate the three-month time-frame and have Medicaid pay only for the care that’s delivered from the first day of the month in which the patient applies for eligibility. The state says the move would save Iowa Medicaid, which serves more than 600,000 people and is funded by both the state and federal government, $36.7 million. The state’s share of the savings would be $9.7 million.

If approved, Iowa would become one of the first states in the nation to deny Medicaid beneficiaries three months of retroactive coverage. With more than 3,300 individuals enrolling in Iowa Medicaid each month, 40,000 Iowans would be affected by the change, which DHS hopes to implement in just four weeks, on Oct. 1.

The proposal is the result of actions taken by the Iowa Legislature during the 2017 session. Lawmakers approved a Human Services appropriations bill that specified several mandated cost-containment measures, one of which directed DHS to eliminate retroactive benefits for all Iowa Medicaid applicants. To do that, Iowa first needs the approval of CMS.

In its formal request to the federal agency, DHS says the change would “encourage individuals to obtain and maintain health insurance coverage, even when healthy.” It also says the change would make Medicaid more “closely aligned with the commercial market,” which doesn’t provide retroactive coverage to its customers.…

The need for retroactive qualification for Medicaid is obvious. Healthy individuals who otherwise would qualify for Medicaid on an income basis frequently do not want to bother signing up when they think they would have little use for the program. But unexpected, serious medical problems do occur, and retroactive qualification would cover care provided before enrollment could be completed.

It is not clear why the Iowa state government would want to deny that coverage when, in fact, it does fulfill the intent of the Medicaid program to cover health care for those individuals who otherwise cannot afford it. It seems to represent just plain meanness on the part of the legislators and state administrators who are pushing for denial of this important coverage. The savings to the Iowa government would be less than $10 million – a pittance relative to the importance of this program.

This perverse behavior on the part of Iowa’s stewards reinforces some important principles:

* Above all, lifelong coverage for everyone should be automatic. Coverage should not be dependent on ever-changing personal circumstances.

* Coverage should not be based on ability to pay, but rather should always be automatic. Each individual’s contribution to the national health program should be based on ability to pay, but that is entirely separate from the principle that each person receives health care based on need for that care, regardless of what has been paid.

* Payment to the providers of health care should not depend on whether or not the patient has the resources or coverage to pay for that care, but rather it should be made automatic through public administration of the funds in a universal risk pool.

* The Iowa state administrators say that slashing retroactive coverage would align the state more closely with the commercial insurance market. Our outrageous costs in an underperforming system are due in a large part to reliance on the commercial market. Using the private insurers as a model is the opposite of what we should be doing.

* Perhaps the most important lesson is that we should reject the calls to turn over the health care financing of federal health programs to the states since too many of them are proving to us that their preferred policies are heartless. The federal government has a duty to ensure that every individual receives the health care that he or she needs. We cannot turn that responsibility over to state bureaucrats who have already proven to us that they do not care about the health and welfare of their people.

We all should care, and an improved Medicare for all would make it automatic so that we do not have to give another thought about administrative excesses designed to interfere with care, like the denial of retroactive authorization – a concept totally foreign to a financing system specifically designed to advance health care justice.

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