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Feds: Ohio Can't Charge Medicaid Patients Premiums

Federal regulators have smacked down Ohio's proposal to charge new fees to Medicaid beneficiaries and impose penalties on those who miss payments.

By Catherine Candisky

Federal regulators have smacked down Ohio's proposal to charge new fees to Medicaid beneficiaries and impose penalties on those who miss payments.

Gov. John Kasich's administration, which submitted the plan at the direction of the Republican-controlled General Assembly, projected tens of thousands of poor Ohioans would lose tax-funded health coverage while taxpayers saved nearly $1 billion.

Officials with the Centers for Medicare and Medicaid Services said in a letter received today that they denied the proposal because it would strip health coverage from Ohio's neediest residents.

"We are concerned about the state's request to charge premiums, regardless of income, to the 600,000 individuals in Ohio's new adult group, as well as hundreds of thousands of low income parents, foster care youth, and beneficiaries with breast and cervical cancer. CMS is concerned that these premiums would undermine access to coverage and the affordability of care, and do not support the objectives of the Medicaid program," Andrew M. Slavitt, the agency's acting administrator wrote in a letter to Ohio Medicaid Director John McCarthy.

"In addition, Ohio's application would exclude individuals from coverage indefinitely until they pay all arrears, a policy that we have not authorized in any state. We do not believe that this practice would support the objectives of the Medicaid program, because it could lead to a substantial population without access to affordable coverage. Our concerns are corroborated by the data you submitted with your application that estimates that these policies would lead to over 125,000 people losing coverage each year."

The plan, dubbed the Healthy Ohio Program, would have required all non-disabled adults to make monthly payments into a health-savings account to help cover expenses beginning Jan. 1, 2018.

GOP legislative leaders tucked the proposal into last year's state budget despite cautions from administration officials that it contained provisions never before approved by the federal government and pleas from advocates for the poor that thousands would lose coverage. If approved, Ohio would have been the first state to drop people with incomes below 100 percent of poverty, that's $11,770 a year for an individual, from coverage for failing to pay a premium or contribution to a health savings account.

Advocates for the poor and uninsured were pleased with the decision.

"We applaud CMS for rejecting a plan that would be harmful to the health of hundreds of thousands of Ohioans who depend on Medicaid for their source of health coverage," said Steve Wagner, Executive Director of UHCAN Ohio.

"Requiring people with low incomes to pay premiums for health coverage and locking them out from re-enrollment when they can't pay will intrinsically decrease enrollment, which does not further Medicaid's goals of providing a health care safety net to vulnerable people. Furthermore, the waiver would widen the gap in health status between people of color and white people by causing a disproportionate percentage of persons of color to be without coverage."

Wagner said research has shown that requiring even small contributions from people with low incomes causes decreased enrollment, leading to poorer health outcomes.

"Since its inception in Ohio's last budget and throughout the subsequent public comment process, CCS has analyzed Healthy Ohio and believes the legislatively constrictive proposal was overly complex, bureaucratic and would have resulted in tens of thousands of Ohioans losing health care coverage, millions of dollars in increased uncompensated care, and higher insurance premiums for all Ohioans. We were not alone in this opinion, however, with nearly all 956 comments collected from business, health care providers, and consumers speaking out against the application," said John R. Corlett, president and executive director of the Cleveland-based Center for Community Solutions.

"We remain committed to working with state policy makers and others to develop sound, cost-effective Medicaid policies that increase patient engagement, lower costs, and improve health outcomes for Medicaid beneficiaries."

(c)2016 The Columbus Dispatch (Columbus, Ohio)

Caroline Cournoyer is GOVERNING's senior web editor.
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