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Issues in Medical Support - 2011

Jeff BallProject Manager, El Paso Co. CO CSS

Medical Support Background• 2000 – Report to Congress issued – 21 Million Children’s Health: Our Shared

Responsibility – The Medical Child Support Working Group’s Report (includes Recommendation 9 – no more than 5% of gross income of NCP should go for health insurance premiums) http://www.acf.hhs.gov/programs/cse/pubs/2000/reports/medrpt/

• 2008 – OCSE AT 08-08 (7/21/08) (final rule at 73 FR 42416) Amending 45 CFR Parts 302, 303, 304, 305, and 308

• (OCSE issues a final rule regarding medical support (includes 5% default for reasonably available, accessibility requirement, health insurance quantitatively addressed in guidelines, cash medical support, etc.)

• Past several years – states pass legislation to address medical support issues and the new regulation

• 2009 - Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) (P.L. 111-3)

• 2010 – Patient Protection and Affordable Care Act, (P.L. 111-148 and P.L. 111–152) (expands Medicaid in 2014, establishes state exchanges, etc.)

• 2010 – OCSE AT 10-02 (6/7/10) “Holding States Harmless from Penalties for Failure to Comply with Medical Support Final Rule State Plan Requirements” (relieves state from penalties associated with noncompliance with the 2008 medical support regulation)

• 2010 – OCSE AT 10-10 (11/4/10) “State Child Support Enforcement Program Flexibility to Improve Interoperability with Medicaid and CHIP” (states that a 2011 NPRM will be issued that will address how Medicaid and CHIP can be better integrated into our medical support mix)

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The Interlude

• 2010 - Healthcare reform seeks near-universal health insurance coverage for Americans

• Universal coverage mandate would be enforced by the IRS, limiting IV-D’s role in enforcing HI orders

• 2010 election gave Republicans control of the U.S. House of Representatives; Congressional Republicans almost unanimously want to defund healthcare reform

• With certain parts of reform not slated for implementation until 2014 or later, the future roll-out for the remainder of the 2010 bill is unknown

• What should IV-D staff do in the interim?

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What are some keys to the 2008 Rule?

• 45 CFR 303.31(a)(3) - 5% is the default “reasonably available” definition for states to use to determine if private health insurance (HI) should be provided in an order; the 5% translates to the amount of the cost of adding children to a plan or the difference between family and single coverage.

• 45 CFR 303.31(a)(1) - Cash medical is the cost of the health insurance premium, or the cost of health care expenses not covered by the insurance plan (out-of-pocket, deductibles, co-pay, etc.)

• 45 CFR 303.31(b)(1) – HI must be accessible

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Two Directions• One view is to recognize that IV-D will have a smaller role in

HI enforcement because:– of the 2010 bill’s universal mandate and enforcement by the IRS– Medicaid and CHIP will become more intertwined with private

insurance, creating a blend that attempts to cover as many people as possible under coverage that is most appropriate for the children

• The other view is that the future is so uncertain that we must proceed as if the 2008 final rule is (sort of) enforceable– implement at state level rules to completely address medical

support, including cash medical, reasonable availability and accessibility, and a policy that is either neutral toward Medicaid/CHIP enrollment or which encourages Medicaid/CHIP enrollment either in general or if private insurance is not available

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Issues in Medical Support - 2011• Looking at the issues facing IV-D and parents

under the 2008 final medical support rule:– Impact of 5% default standard for reasonable cost– Escalating premium costs for insurer/insured– Guidelines and modification requests– Cash medical assistance– CP or step-parent coverage– Out-of-pocket expenses - judgments– Accessibility– Medicaid/CHIP and private insurance– Dependent-only coverage availability

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Impact of 5% reasonable cost – Health Insurance costs

• 69% of employers offered employer-sponsored health insurance coverage– 59% of ERs with 3-9 EEs offered insurance; – 76% 10-24 EEs– 92% 25-49 EEs– 95% 50-199 EEs and– 99% 200 EEs or more

• Average 2010 monthly employer-sponsored health insurance single coverage premium - $421; for family coverage -$1,147

• [In 2000 they were $206 and $536.50 respectively – 114% increase in family coverage cost in 10 years]

• Average monthly worker contribution in 2010 to the insurance premium was $135 (32% of total) and $333 (29%) respectively

• 77% of PPO-coverage and 66% of POS coverage had deductibles, which averaged $675 and $1,048 respectively

• Average co-pay for a doctor’s visit was $22 for an in-network primary physician and was $31 for a specialist

• Average prescription co-pay was $11 for generic up to $89 for “Tier Four” drugs • Source: Employer Benefits 2010 Annual Survey, Kaiser Family Foundation, Sept. 2010 - http://ehbs.kff.org/?page=charts&id=1&sn=6&p=1

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Impact of 5% reasonable cost – What do IV-D Parents Earn?

• In a 2007 seven-state survey, 57% of IV-D CPs and 64% of NCPs were employed. In three states (FL, IL, PA) that supplied data, the average monthly earnings were $1,811 for employed IV-D CPs and $1,834 for employed NCPs

• If the average single coverage premium is $135 and family coverage is $333, the average health insurance premium costs 7.5% for individual coverage and 18.4% for family coverage of a IV-D earner’s monthly income; the difference is $198 or about 11% of monthly income

• The 5% reasonable cost standard would be about $90-91 per month in premium costs for CPs and NCPs

• The $198 difference in premium costs as 5% of gross monthly income equals $3,960 per month or $47,520 per year

Source: E. Sorenson and T. Tennehil, Demographic Results from Nine-state IV-D Programs, Abstract, Urban Institute, Dec. 2007, http://www.urban.org/publications/1001243.html

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Colorado’s 20% Healthcare Insurance Solution

• CRS 14-10-115(10)(g) - Where the application of the premium payment on the guidelines and schedule of basic child support obligations results in a child support order of fifty dollars or less or the premium payment is twenty percent or more of the parent's gross income, the court or delegate child support enforcement unit may elect not to require the parent to include the child or children on an existing policy or to purchase insurance. The parent shall, however, be required to provide insurance when it does become available at a reasonable cost. Source: Colorado Revised Statutes 14-10-115((10)g)

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Colorado’s Reasonable Cost

• The 20% of gross income applies only to the child(ren)’s portion of the insurance, meaning the difference between single coverage and single plus dependent coverage or the cost of a stand-alone dependent coverage policy

• To add a dependent to a single coverage policy may cost around $100-150/month, making it “reasonable” for those ordered to cover who make $500-$750/month

• CO is investigating insurance policies for dependents only to offer when ER does not have insurance coverage that is reasonably available or accessible to the EE

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Lack of Health Insurance CoverageCustodial Parents

HI in CSE Order

HI in CSE Order & Provided

HI not in CSE Order

HI not in Order but Provided

No CSE Order

No CSE Order but Provided

Number 13,743,000 4,205,000 1,873,000 2,615,000 352,000 6,315,000 1,078,000

Overall 100% 30.6% 13.6% 19.0% 2.6% 46.0% 7.8%

Subgroup 100%100% 100%100% 44.5%44.5% 100%100% 13.5%13.5% 100%100% 17.1%17.1%

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• If health insurance is in the CSE order, it is provided 44.5% of the time• If health insurance is not in the CSE order, it is provided 13.5% of the time• If there is no CSE order, health insurance is provided 17.1% of the time• Many reasons why HI not ordered – one is the definition of reasonably available• HI not ordered in the CSE due to not being reasonably available due to low

threshold such as 5% means much lower likelihood of private HI• No guarantee that those who qualify for Medicaid or SCHIP apply• Source: U.S. Census Bureau, 2007 Current Population Survey, Table 8 - http://www.census.gov/hhes/www/childsupport/chldsu07.pdf

Income Distribution

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Underuse of Medicaid• Why is Medicaid enrollment not universal?

– “[P]articipation rates are far from ideal, with a national average of 61.7% of eligible individuals. [Authors estimate 80% nationally as a realistic goal.]

– Medicaid participation is highly variable, with rates ranging from just under 44% in Oklahoma, Oregon, and Florida to 80% in Massachusetts and 88% in the District of Columbia.

– The states that will have the greatest number of newly eligible adults under health care reform have been historically worse (but not significantly so) at finding & keeping eligible adults enrolled in Medicaid.”

• What are reasons for not enrolling?– “[Because applicants must] complete the multipage application and

provide documentation of income and residency, eligible individuals simply never get enrolled.

– [F]ederal law requires that states verify an enrollee's eligibility annually, and some states choose to do so more frequently.

– The prevalence and quality of Medicaid managed care, provider reimbursement rates, and outreach efforts may also play a role…”

• Source: B. Sommers and A. Epstein, Medicaid Expansion: The Soft Underbelly of Health Care Reform?, New England Journal of Medicine, Nov. 2010, http://www.nejm.org/doi/full/10.1056/NEJMp1010866

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HI Availability Solution• Raise the reasonably available standard to 10% to

20% from 5% of gross income• Make health insurance premium cost a priority

payment over arrearage payback (was in NPRM)• Look at all insurance available to either parent,

either directly or through new spouse• Ensure that those without HI availability at work

or who have low income to premium cost ratios sign up for Medicaid and CHIP and provide follow-up contact to ensure enrollment

• Pursue child-only health plans where available

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Escalating Premium Costs

• Ensure HI orders are flexible to account for changes in coverage, deductibles, co-pays and premium increases without the necessity of seeking a review and adjustment

• Allow in the order for either parent to insure children, with the NCP responsible to pay a cash medical contribution towards the premium cost or to enroll the children, based on the availability of the health insurance best suited to the needs of the children

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Guidelines and Modification Requests

• How do your guidelines treat HI Premiums? – Dollar-for-dollar trade off between current support

amount and cash medical– A formula that prorates the cost of the HI in the

support calculation between parents– A less than dollar-for-dollar reduction in current

support to pay for premium cost• Who chooses when there are two or more plans?

Does it matter if the CP receives TANF?• Are your orders flexible enough to allow for

plan/insurer changes without a modification?

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Cash Medical Assistance

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HI Accessibility

• Accessibility is a state-by-state and often local decision based on the distance between the children and the health care providers

• Reasonable in a city may be five miles or 20 minutes

• Reasonable in a rural area may be 75 miles or one and a half hours

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More about CHIP• Private insurance in place for a child replaces CHIP; on the other hand, Medicaid complements it and

is used as “wrap-around” coverage• Originally created in 1997, CHIP is Title XXI of the Social Security Act and is a state and federal

partnership that targets uninsured children and pregnant women in families with incomes too high to qualify for most state Medicaid programs, but often too low to afford private coverage. Within Federal guidelines, each State determines the design of its individual CHIP program, including eligibility parameters, benefit packages, payment levels for coverage, and administrative procedures.

• In addition to renewing the CHIP program, the new legislation makes it easier for certain groups to access CHIP health care, including uninsured children from families with higher incomes and uninsured low-income pregnant women.

• Centers for Medicare & Medicaid Services (CMS) enrollment data based on state reports show that 7.4 million children were enrolled in CHIP at some point during Federal fiscal year (FFY) 2008, compared to 7.1 million for fiscal 2007.

Source: Overview of CHIP HHS CMS website: http://www.cms.gov/LowCostHealthInsFamChild/

• Families who earn too much to qualify for Medicaid may be able to qualify for CHIP.• Families that do not currently have health insurance are likely to be eligible, even if you are working.

The states have different eligibility rules, but in most states, uninsured children under the age of 19, whose families earn up to $44,100 a year (for a family of four) are eligible. For little or no cost, this insurance pays for:

• doctor visits• immunizations• hospitalizations• emergency room visits

Source: Insure Kids Now! HHS website: http://www.cms.gov/LowCostHealthInsFamChild/02_InsureKidsNow.asp#TopOfPage

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Thanks

Contact me at:

•Jeff Ball•Project Manager

•El Paso County Child Support Services•30 E. Pikes Peak Ave.

•Colorado Springs, CO 80903•jball@ywcss.com

•719-208-8288

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