Iowa: Bill introduced to create a CHIP buy-in program...on the ACA exchange??
The Children’s Health Insurance Program (CHIP) is offered through the Healthy and Well Kids in Iowa program, also known as Hawki. Iowa offers Hawki health coverage for uninsured children of working families.
No family pays more than $40 a month. Some families pay nothing at all. A child who qualifies for Hawki health insurance will get their health coverage through a Managed Care Organization (MCO).
Currently, only children up to 19 years old in families earning up to 302% of the Federal Poverty Level (FPL) are eligible for Iowa's CHIP program (Hawk-I). That's roughly $60K/year for a single parent with one child, or around $91K/yr for a family of four. Again, only the children are eligible, not the parents or guardians.
16 Iowa state legislators--all Democrats--introduced SF63 in January. Here's the relevant text of the bill:
HAWK-I PROGRAM PURCHASE OPTION.
1. The director of the department of health and human services shall seek necessary federal waiver authority to do all of the following:
a. To establish a program that allows individuals who meet either of the following conditions the option of purchasing coverage through the hawk-i program rather than purchasing a qualified health plan through the health insurance marketplace established pursuant to the federal Patient Protection and Affordable Care Act, or an individual health plan offered outside of the health insurance marketplace:
(1) Individuals with incomes above the maximum income eligibility limit pursuant to section 514I.8, who otherwise meet the hawk-i program eligibility requirements pursuant to section 514I.8 with the exception of age.
(2) Pregnant individuals who meet the age requirements for the hawk-i program pursuant to section 514I.8, regardless of whether the individual’s family income meets the maximum income eligibility limit pursuant to section 514I.8.
b. To allow individuals who qualify under paragraph “a” who choose to purchase coverage through the hawk-i program to use advanced tax credits and cost-sharing credits, if eligible, to purchase this option.
c. To permit the hawk-i program purchase option to be offered through the health insurance marketplace as a coverage option and to be compared with qualified health plans offered through the health insurance marketplace.
d. Notwithstanding the eligibility criterion that a child must be less than nineteen years of age pursuant to paragraph “a”, subparagraph (1), allow the hawk-i purchase option to be offered to a child up to twenty-six years of age.
2. The director of health and human services shall coordinate the administration of the hawk-i program with the hawk-i program purchase option to maximize efficiencies and improve the continuity of care for eligible children consistent with chapter 514I.
The director shall implement mechanisms to ensure the long-term financial sustainability of the hawk-i program and mitigate any adverse financial impacts to the health insurance marketplace. These mechanisms shall address issues related to minimizing adverse selection, the state financial risk and contribution, and negative impacts to premiums in the individual and group insurance market both inside and outside of the health insurance marketplace. At a minimum, the hawk-i purchase option shall include all of the following:
a. Establishment of an annual per enrollee premium rate similar to the average rate paid by the state to managed care plan contractors under the hawk-i program.
b. Establishment of a benefit set equal to the benefits covered under the hawk-i program.
c. Establishment of annual open enrollment periods consistent with those for the hawk-i program.
d. The ability of the director to adjust the purchase option’s actuarial value to a value no lower than eighty-seven percent.
e. Reimbursement mechanisms to address potential reductions in funding for health insurance marketplace operations.
f. Reimbursement mechanisms to address potential increased costs to the hawk-i program.
3. The director of the department of health and human services in collaboration with the commissioner of insurance shall report to the chairpersons and ranking members of the health and human services committees and the joint appropriations subcommittee on health and human services by September 1, 2023, on the progress of the federal waivers and the results from actuarial and economic analyses that are necessary for a waiver proposal. The report shall also include recommendations regarding any statutory or administrative rule changes necessary to implement the program.
On the surface, this seems to be similar to the Medicaid buy-in program on the verge of passing in New Mexico and the Basic Health Plan buy-in program being proposed in Minnesota. However, the proposed Iowa program would have several important differences:
- First, it would be tied to the state's Children's Health Insurance Program (CHIP) instead of Medicaid or BHP...although Iowa's CHIP program operates via MCO's just like Medicaid does, and I'm guessing the coverage and reimbursement rates are similar to Medicaid.
- Second, unlike either NM or MN's proposals (which would be open to residents of any age) I think this would be limited to children up to 26 years old (as well as pregnant women). I'm a little confused, however, because at one point it says it's open to those who "are otherwise eligible...with the exception of age..." but later on it clarifies that it would be open to "a child up to 26 years of age."
- Third, while the newly-eligible Hawk-i enrollees would have to pay premiums on a sliding income scale (just as they would in the MN & NM proposals), that sliding scale would actually be based on them becoming eligible for ACA Advance Premium Tax Credits...by treating the Hawk-i program as though it was equivalent to the ACA's official Qualified Health Plans (QHPs).
In other words, it doesn't sound like they're proposing to have the state of Iowa cover the cost of subsidizing the additional enrollees--they'd want the federal government to pick up the cost.
On the one hand, this kind of makes sense given that Iowa has become a pretty solidly red state in recent years, with a completely Republican-controlled state government; there's basically zero chance of them agreeing to provide their own supplemental financial subsidies for a program like this.
On the other hand, I find it extremely difficult to believe that the HHS Dept. would agree to pretend that CHIP program coverage "counts" as a Qualified Health Plan policy to the point of treating it as one on the ACA exchange...especially since Iowa operates on the federal ACA exchange, not their own.
After all, I've been griping for years that CMS refuses to give BHP enrollment in Minnesota & New York more than a footnote reference in their ACA exchange enrollment reports even though they comprise ~7% of total exchange enrollment...and that's just for reporting/press release purposes. I have no idea what legalities would be involved in trying to ret-con the legal definition of QHPs to include CHIP coverage, especially given the risk pool implications. I also can't imagine that the insurance carriers offering individual market coverage would be too happy, since 19 - 26 yr olds are considered among the lowest-risk enrollees they can have.
HOWEVER...maybe it's feasible? I don't really know. It's an interesting idea, anyway. It probably won't go anywhere, but it's something to keep an eye on...