The Obama administration is late in implementing several provisions of the federal health overhaul intended to improve access to care and lower costs.
The programs, slated to take effect Jan. 1, were supposed to increase fees to primary care doctors who treat Medicaid patients and give states more federal funding if they eliminate Medicaid co-pays for preventive services.
The administration also has delayed giving states guidance on a new coverage option known as the “basic health program,” designed to help low- and moderate-income people who don’t qualify for Medicaid. At least one state - Washington - already has decided to not implement the program in 2014 because it won’t have enough time. The federal inaction keenly affects Washington, Minnesota and New York state because they already have government-subsidized programs to help cover such residents that expire at the end of this year. As a result, tens of thousands of people who have coverage now but won’t qualify for expanded Medicaid might see their coverage become unaffordable next year.
Some of these deadlines appear to have slipped as the administration focuses on carrying out two of the biggest provisions in the law designed to expand health insurance coverage to as many as 30 million people: On Oct. 1, the federal government must have in place new online marketplaces that will offer government-subsidized individual and small-group coverage in every state. Coverage in these marketplaces starts Jan. 1, 2014, when many states also are expected to expand their Medicaid programs for the poor.
Kavita Patel, a former White House health policy aide to President Barack Obama, said some delays were inevitable given staff turnover after the November election and the focus on emergencies such as Hurricane Sandy. “I am still impressed with the rate that they are going, given all that is going on,” said Patel, who’s now a fellow at the center-left Brookings Institution research center in Washington.
But the delays already are affecting some of the programs that states and their neediest residents had banked on.
Most states, including Texas, Florida and California, haven’t started offering the higher pay rates to primary care doctors who see Medicaid patients because the administration didn’t issue the rules until November and state officials said they didn’t have time to carry out the change. While Medicaid fees vary by state, they are generally far below those paid by Medicare and private plans. The change means an average 73 percent pay increase, according to a 2012 study by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)
The two-year pay hike is intended to entice more doctors to treat the millions of residents who are expected to enroll in Medicaid in 2014. “The delay doesn’t help” states’ efforts to recruit new doctors, said Anthony Wright, the executive director of Health Access, a California patient-advocacy group.
The Centers for Medicare and Medicaid Services said doctors would be able to get the higher fees retroactively to Jan. 1 when states did implement the provision.
The administration also has lagged on paying states a 1 percentage-point higher Medicaid matching rate if they eliminate requirements for co-pays for immunizations and other preventive services. About half the states charge people on Medicaid nominal co-payments for such services, which might be a barrier to care.
The federal government splits the cost of Medicaid with states, with the percent of funding varying by the wealth of each state. Every state receives at least a 50 percent match. The 1 percentage-point increase would mean an extra $74 million in federal funding in Washington, said MaryAnne Lindeblad, the director of the Washington State Health Care Authority, which runs the Medicaid program.
“In the great scheme of things, every little bit helps,” she said.
It’s unclear when the payments will begin to states that qualify, because the administration hasn’t issued the regulations.
The health law also was supposed to give states the option to set up basic health programs that would offer lower cost-sharing for people who make too much to qualify for Medicaid but who’d be hard pressed - even with new federal subsidies - to afford the premiums and cost-sharing of plans offered in the new markets. The law allows states to use federal dollars that would have gone to subsidies to pay instead for coverage for residents who earn up to twice the federal poverty level, or about $47,000 for a family of four.
Washington, Minnesota and New York are scheduled to end their programs later this year, because it was assumed that beneficiaries would get coverage through the health law. Massachusetts’ program will expire in June.
Another advantage of the basic health program is that people won’t have to worry about paying the government back if their incomes increase during the year in which they’re enrolled, while people getting subsidies could face that prospect, Lindeblad said.
Washington hopes to offer the program in 2015, she said.
A spokesman for the Department of Health and Human Services said rules for the basic health program should be coming soon, and offered no reason for the delay.
Lucinda Jesson, the commissioner of the Minnesota Department of Human Services, said the basic health program was vital for states such as Minnesota that were ahead of the federal government in expanding coverage. More than 90,000 people might have to go from MinnesotaCare into the more high-cost coverage of the insurance exchanges if the state can’t establish a basic health program in time for 2014, Jesson said.
“We don’t want to have people worse off because of the Affordable Care Act. That is not what Congress intended,” she said.