Maryland's One-of-a-Kind Plan to Simplify Switching Health Insurance

The bill would allow residents to go ahead with approved procedures and keeping seeing the same doctors, even after changing insurance.
March 13, 2013

Here’s a problem looming in 2014 -- when the Affordable Care Act’s Medicaid expansion takes effect and health insurance marketplaces begin operating -- that has kept Maryland health officials up at night. Let’s say you’re a woman who purchased private health coverage through the marketplace. Later, you become pregnant, take leave from work and your income goes down so you qualify for Medicaid. What happens to your prenatal care? Do you have to go to a new gynecologist approved by Medicaid and essentially start from scratch?

Or let’s say you’re enrolled in Medicaid and you fall, break your back and end up in the hospital. But your spouse gets a new job at the same time and suddenly your household makes too much money to qualify for Medicaid. So you buy private coverage on the marketplace. What if the hospital doesn’t contract with your new insurance carrier? Are they going to lug you out of the emergency room and move you over to the nearest hospital that does take your new insurance?

These are called "continuity of care" issues, and they’re going to be a very real problem next year when the ACA’s coverage expansion takes full effect. The law opens two avenues for coverage: people below 138 percent of the poverty level (about $15,200 for an individual) qualify for Medicaid. People above that threshold qualify for federal tax subsidies to purchase private insurance on the marketplaces.

But income, particularly for low-income Americans, is always fluctuating. A 2011 Health Affairs study estimated that as many as 28 million people could switch at least once between Medicaid and private insurance in 2014.

Maryland officials wanted to make that transition as smooth as possible. After looking at their options, they’ve crafted a one-of-a-kind plan to do it.

“Because there's always been churn, there was an awareness that these kinds of problems would arise,” says Chuck Milligan, Maryland’s Medicaid director. He recalled that when Medicare Part D prescription drug coverage commenced in 2006, many seniors had trouble getting their new Medicare plans to cover their old medications, which had been approved by Medicaid.

“We wanted to make sure we didn't have a gap in care,” Milligan says, as more people get covered under the ACA. “Now that we've resolved the seamlessness of coverage, we wanted to be sure we tackled continuity of care.”

There are two key provisions in the proposal:

  • If a person changes insurers, her new plan must recognize any procedures, treatments, prescriptions or services that had already been authorized by her old insurer, for a period of 90 days or the full course of treatment, whichever is less. After that period, the new insurer can reassess the situation;
  • If a person changes insurers while already receiving care for specified ailments (such as a serious acute event, chronic conditions, bone fractures, joint replacements, a new cancer diagnosis, etc.) from a health-care provider that is outside her new insurer’s network, the new insurer is required to allow the person to continue receiving care from that out-of-network provider. Again, there is a 90-day limit.

Say, for example, you’ve been approved for bypass surgery by your old insurer. Your new insurer would be required to allow the procedure to go forward without forcing you to go see a new cardiologist and have the surgery reapproved. Or say you’re in the middle of a physical therapy program provided by a therapist outside your new insurer’s network. You wouldn't have to find a new therapist simply because you change insurers. You can keep seeing the one that you already have.

According to a legislative analysis conducted before the bill was introduced in January, the provisions should have significant advantages for low-income Marylanders without putting a big financial burden on insurers who will be paying out-of-network providers and covering treatment that they didn’t authorize.

As many as 290,000 residents are expected to switch between Medicaid and the insurance marketplace, according to the analysis. Many should have a smoother transition thanks to the bill’s provisions. Of those gaining and then losing Medicaid eligibility, for example, 26 percent are estimated to be taking prescription medications; 12 percent are estimated to be hospitalized at the time and 7 percent are estimated to be receiving mental health treatment. So as they move between private insurance and Medicaid, those people will be able to see the same doctors and take the same medications.

At the same time, the bill is expected to have a minimal fiscal impact on insurers. According to the analysis, the collective difference in per-member, per-month costs for those moving from Medicaid to private coverage is projected to be $0.07 (out of a $300 baseline) under the bill. For those moving from private coverage to Medicaid, the difference is projected to be $0.05 per member, per month. In other words, the financial consequences are next to nothing.

“That’s because this does not create any new benefits. It doesn't expand the scope of somebody's benefit package,” Milligan says. “It's simply providing protections about how the covered benefits themselves are delivered.”

The bill has so far moved swiftly through the Maryland legislature. It was introduced in January and has since gone through a series of public hearings for various stakeholders to offer their input and amendments. House and Senate staff will be briefed this week, Milligan said, and then the push through the legislature will begin in earnest. The O’Malley administration expects the bill to pass by April 8, the end of the legislative session.

Other states have addressed churning and continuity of care from the insurance coverage side, as Governing has previously reported, but Maryland is among the first to focus specifically on care delivery. Numerous states have asked for copies of the legislative analysis, Milligan said, suggesting similar proposals might start popping up elsewhere.

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