Say Ahhh!

Doctor Donald M. Berwick, a respected Harvard professor and pediatrician who has built a reputation for improving quality and reducing health care costs, was sworn in this week as administrator of the Centers for Medicare & Medicaid Services.  The agency had been without a permanent administrator since 2006. 

Dr. Berwick was installed in the CMS position through a recess appointment, allowing him to serve without Senate confirmation through the end of 2011.  While he's coming into office under less than ideal circumstances due to the controversy surrounding the recess appointment, a prolonged confirmation process would have delayed filling a crucial job vacancy. CMS has been without a leader for four years and it's important to have someone of his stature at the helm while CMS navigates its way forward toward full implementation of the Affordable Care Act. 

At CCF, we're happy to see the first pediatrician be appointed to head the agency.  With his strong background in children's health care issues, we are hopeful that he'll be influential in recognizing the unique developmental and health needs of children and that his grasp of these issues will be reflected in the policy decisions the agency makes.  

This last weekend, the nation's Governors came together for their annual meeting in Boston where the main topic of conversation was the economic crisis that continues to cripple state budgets.  One of the key policies many of the Governors made a pitch for was an extension of fiscal relief for strapped states through the extension of increased federal support for Medicaid (aka FMAP) .  As my colleague Joe Touschner pointed out in a blog last month: "That extra support has helped states through one of the worst fiscal crises on record and has been vital in stabilizing Medicaid coverage for children and others in families facing job loss."

My colleague Jocelyn Guyer also blogged about this topic earlier this week and I wanted to follow-up her comments with another look at why the Governors (and many others) think it is so critical for Congress to act sooner rather than later on an FMAP extension.  To do that, I pulled out a brief that Jocelyn and I, along with our colleague here at CCF, Martha Heberlein, did back in 2008 when the economic crisis we are currently in, began.

In this brief, we noted the astonishing progress that states had made over the last decade in covering uninsured children and explained that that progress was at risk due to the worsening economic climate facing states and a dramatic increase in the number of uninsured seeking coverage through Medicaid and CHIP.  We cited research from the Urban Institute that found that a one percentage point rise in the national unemployment rate can be expected to cause the number of uninsured people to grow by 1.1 million and to increase Medicaid and CHIP enrollment by one million (including 600,000 children and 400,000 non-elderly adults).

At the time, we considered the implications of this study if the unemployment rate reached 7.5 percent. Today, we face an unemployment rate of around 9.5 percent- and the model employed two years ago would suggest that as a result, the number of people that have lost employer-based coverage is 11.2 million; 4.7 million have likely enrolled in Medicaid or CHIP and about 5.1 million more people have become uninsured.

In the 2008 brief, we outlined key policies that lawmakers were considering to assist families through this crisis- reauthorizing CHIP and temporarily increasing the federal funding for Medicaid through increasing the FMAP.  CHIP has been reauthorized, the FMAP was increased until the end of this fiscal year and health care reform was been signed into law. However, the economic crisis continues and has likely resulted in millions of more people seeking coverage through Medicaid and CHIP just when the federal commitment to help states weather this economic storm appears to be eroding. While help is on the horizon in 2014 when states will receive new federal support through health reform, states need help now to meet the unprecedented demand for publicly-funded health care coverage.  It would be a mistake for the federal government to turn its back on the states before our nation has clearly pulled itself out of the recession. 

Community Catalyst and Georgetown's CCF have just finished up a piece that explores in detail the way that the new individual responsibility requirement will work.  With all of the controversy and rhetoric surrounding the requirement, it seemed a good time to take an objective, detailed look at how it will actually work. 

Plus, even though it doesn't go into effect until 2104, we wanted to write about the individual responsibility requirement because it is the foundation on which much of health reform rests.  It allows the country to move forward with popular insurance reforms, such as the ban on excluding people from coverage if they are sick, and plays a major role in expanding coverage.

In working on this Q & A, a few particularly interesting themes emerged, including:

• Nearly everyone is expected to secure coverage, but they won't necessarily face a penalty if they don't do so.  Very, very few people are exempt from the individual responsibility requirement.  Just people in prison, with strong, documented religious objections, and undocumented immigrants (who are left out because they are denied help in securing coverage through Medicaid, CHIP and the Exchange.)  But, lots more people are exempt from a penalty if they end up not complying with the requirement, including those who can't afford coverage, experience shorts gaps in coverage, fall below the tax filing threshold (which hovers around the poverty line, but can be somewhat below or above based on family size), or are native Americans.
• When it comes to children, IRS rules determine who is responsible for getting them coverage.  Parents (or caretakers) are obligated to secure coverage for their children; if they don't, they may be subject to a financial penalty when they file their taxes.  Interestingly, it is the parent(s) who claims a child as a dependent on the tax form who is responsible for securing her coverage, not necessarily the parent who is living with the child and taking care of her on a daily basis.  While not a big deal for many families, this policy could be a bit complicated in some divorced or never-married families where a non-custodial parent is claiming a child as a dependent for tax reasons.
• The Massachusetts experience with a coverage requirement went surprisingly smoothly. One of the more interesting Q & As in the document is about the Massachusetts experience with a coverage requirement.  Advocates in Massachusetts have dubbed it the "dog that didn't bark," reflecting that it has generated relatively little controversy and 98.6 percent of taxpayers properly reported their insurance status on their tax forms. Not everyone is like the residents of the Bay State, and so it may be a different story when 2014 arrives.  But, a very interesting reminder that a coverage requirement that is implemented well and backed up by strong initiatives to make insurance affordable can go surprisingly smoothly.

Dr. Fairbrother and her colleagues at Cincinnati Children's hospital have just come out with an excellent new study that takes a clear-eyed look at how often children end up losing health coverage after a parent loses a job.  The results are powerful, but not pretty -- between 2000 and 2004, almost one in three kids lost coverage when their parents lost a job (311 out of every 1,000).  And, the rate is much higher for low-income children (456 low-income children out of every 1,000 lost their coverage when a parent lost a job).   With the latest government data indicating that in 2009, there were 9.4 million families with at least one unemployed member, these are alarming findings. 

As bad as this news seems, one bright spot is that this is a problem we can fix by helping these children secure affordable coverage options through Medicaid and CHIP as their parents get back on their feet.  And, I'm willing to bet that we've actually already made some significant progress since 2004, the latest year for which data were available for the new study.  Thanks to the hard work of Governors, state-based advocates, and political leaders in Washington who have made a strong commitment to covering children, many of the children in families losing jobs now are eligible for Medicaid or CHIP and, increasingly, they are facing easier, more family-friendly enrollment procedures.  Especially before their budget situations deteriorated, states across the country were getting rid of red-tape barriers to coverage and extending Medicaid and CHIP eligibility to additional children. 

Since the downturn, states have largely held onto the gains in coverage (although concerns are increasing about cuts to provider reimbursement rates) and some are continuing to push forward.  This ability to "weather the storm" has been due in large part to a short-term, temporary increase in the help that the federal government provides states in financing Medicaid.

Now, however, we are coming up on a critical moment that brings the importance of Dr. Fairbrother's research into sharp focus. At the end of this year, the extra help the federal government has given states is slated to expire even though state budgets continue to be battered by rising demand for services. Without a short-term continuation of the extra help, states will be under enormous pressure to scale back Medicaid and CHIP, including children's coverage.  (They can't do it directly because the new health law requires a maintenance-of-effort when it comes to Medicaid and CHIP eligibility rules and procedures but there are indirect ways to cut back on coverage that states may be forced to consider such as slashing the number of state workers who can process applications or cutting reimbursement rates so deeply that children cannot secure needed care.)  If this happens, the reality documented by Dr. Fairbrother that children often lose their private coverage when their parents lose a job will translate into more and more uninsured children.  We will have a much harder time "catching" them in Medicaid and CHIP, and offering their families the peace of mind that comes with knowing that at least their children can still get health care.  On a more global scale, we could end up with a deeply disturbing result - more children becoming uninsured even as the country moves forward on implementation of broader health reform in 2014.

At Georgetown, we work closely with state officials and advocates who are addressing these issues in the states, and the sense of urgency is palpable.   If leaders in Washington don't come through quickly with an extension of federal fiscal relief, it may threaten a lifeline that can help millions of families stay afloat in the midst of unprecedented job loss.