This is the first of at least two planned updates on what we’ve learned about the Kentucky Integrated Health Insurance Premium Payment (KI-HIPP) program. Since our initial blog, the Department for Medicaid Services (DMS) held a Q&A session and met with advocates in response to our questions and concerns. In this update, we’ll share what’s changed as a result of those meetings and what hasn’t.
First, it has been made clear that participation in the KI-HIPP program is completely voluntary. DMS has committed to revising the regulation to remove the language that appears to make KI-HIPP participation mandatory. Medicaid recipients are free to explore the possibility of Employer-Sponsored Insurance (ESI) coverage through KI-HIPP without risk of losing Medicaid coverage. Those revised regulations should be filed soon.
However, there are still other provisions which should be considered before beneficiaries decide if KI-HIPP is right for them.
Premium Reimbursement: DMS has confirmed this will be the only available payment mechanism. KVH is seeking clarification from CMS regarding their approval of this reimbursement mechanism, since it puts a large financial burden on households that are living paycheck-to-paycheck. Requiring the employee to submit each paystub for reimbursement is unnecessary as the monthly premium payment is set at the beginning of the plan year. As an alternative, DMS could base payments on the initial paystub or monthly employee contribution amount and deposit the monthly premium amount into a checking account for that household before the premium payment is due.
Out-of-Pocket Expenses: DMS has confirmed that Medicaid recipients who see an ESI-only provider will be subject to paying all deductibles, copays, coinsurance, and any other cost sharing required by their ESI. It is KVH’s understanding that out-of-pocket costs for those covered by Medicaid are limited to 5% of their household income, even if it’s an ESI-only provider (as long as they are receiving a Medicaid-eligible service). KVH is seeking clarification from CMS regarding the application of the 5% out-of-pocket maximum.
Provider Network: DMS has clarified that KI-HIPP participants will have access to the full “fee-for-service” Medicaid provider network, which can differ from a particular Managed Care Organization’s (MCO) network. It’s important to note that providers who participate with MCOs aren’t required to accept fee-for-service patients. The current provider directory search does not allow a search for fee-for-service providers, so KI-HIPP participants will need to call a provider in advance to make sure they accept fee-for-service. DMS expressed interested in our suggestion to create a search option dedicated to KI-HIPP participants, but there is no firm commitment to do so at this time.
Qualifying Event: A “qualifying event” allows someone to start or stop ESI outside of the regular open enrollment period. DMS has confirmed that eligibility for KI-HIPP is a qualifying event that allows a Medicaid recipient to enroll in ESI any time of the year. However, if an individual loses their KI-HIPP eligibility for some reason and the ongoing premium is too expensive for the employee to continue paying on their own, it is up to the employer whether the loss of the KI-HIPP eligibility is a qualifying event to discontinue the ESI. For example: a KI-HIPP participant’s income is at 130% of the FPL. She gets promoted to a new position, and her income is now 140% of FPL, making her ineligible for Medicaid AND the KI-HIPP program. With an unaffordable premium and out of pocket costs, she would be better off to discontinue the ESI and obtain coverage from a plan on the federal marketplace that offers subsidies based on her income. But if her employer doesn’t recognize loss of eligibility as a qualifying event, she may be stuck paying for unaffordable coverage until the next open enrollment period. ESI plans are regulated by the Department of Insurance (DOI) or the US Department of Labor, rather than DMS. KVH is seeking clarification from DOI regarding this rule.
KI-HIPP Member Handbook: DMS has made changes to its KI-HIPP Member Handbook based on the questions and concerns raised by KVH and other organizations. The revised handbook more accurately describes the program, including the limitations of the provider network, potential for out-of-pocket expenses, and other enrollee responsibilities.
At this time, KVH anticipates at least one more update after following up with CMS on reimbursements and out-of-pocket expense protections, and with DOI on the question of qualifying events.
Our KI-HIPP Explainer will continue to be updated to reflect these changes. Please share and stay tuned!