National Health Reform and Medicaid
On March 23rd, 2010, the President signed the Affordable Care Act into law. This act will reform national health care and change many aspects of health care including Medicaid programs like TennCare.
In order to be as prepared as possible for the changes ahead, TennCare continues to analyze how reform will affect the program with the details that are currently available and by communicating with federal officials and officials from other states. We will, of course, have to wait on policies and guidelines to be handed down from the federal government before we have a complete picture of how national health care reform will change TennCare. Though there are many aspects of the bill that will start taking effect within the next couple of years, most of the significant changes to Medicaid programs will not begin until 2014. The information below describes how the law will affect TennCare. For information on how the law will affect those without health insurance, those with health insurance, business owners, health care providers and health care insurers please click here.
Eligibility Changes
One major change to TennCare will be the adoption of new eligibility requirements. Starting January 1, 2014, all individuals whose household incomes are below 133 percent of poverty will become eligible under the new guidelines. Today for a household of four, 133 percent of poverty is $29,328 per year.
Federal Match Rate Changes
The Affordable Care Act also changes how health care for people on Medicaid is paid for. Medicaid agencies share the cost of the running the program with the federal government. Traditionally, TennCare has been matched at a 65 percent/35 percent match rate, meaning for every dollar spent the state pays 35 cents and the federal government pays 65 cents. All individuals who come onto the program due to the eligibility changes outlined in the law, will qualify for a 100 percent match rate from the federal government for the first two years and then the next consecutive years at 95 percent, 94 percent, 93 percent, and 90 percent thereafter. It is not known, however, how long the rate will remain at 90 percent. The match rate will remain the same - 65 percent - for people who come onto the program who would have qualified under eligibility standards that were in place before the eligibility changes outlined in the bill took place.
High Risk Pool
The Affordable Care Act creates a new, temporary insurance option for uninsurable Tennesseans, known as the federal high risk pool. Uninsurable individuals typically have pre-existing health conditions that prevent them from obtaining commercial insurance. In Tennessee, the federal high risk pool is managed by the U.S. Department of Health and Human Services and administered by a not-for-profit health insurer. The plan is completely funded by the federal government and is available for qualifying individuals until December 31, 2013. In January 2014, commercial health insurance reforms will be in place that will guarantee access to commercial insurance for individuals regardless of their pre-existing condition. Information about the federal high risk pool, eligibility qualifications and instructions on how to apply can be found at HealthCare.gov.
Other Changes
There are other factors in the law that will affect Medicaid. Medicaid agencies cannot put more restrictive eligibility requirements in place than those that were in place when the bill was signed into law until 2014. In 2011, Medicaid agencies will be required to cover smoking cessation services for pregnant women. Also, the way pharmacy rebates are calculated will change, and rates for primary care services will be set at 100 percent Medicare starting in 2013.
