States maintained Medicaid and CHIP coverage, invested in IT in 2011

Spurred by federal funding to upgrade enrollment systems and incentive programs to encourage increased coverage, more than half of the states expanded and simplified their Medicaid and Children's Health Insurance Programs' eligibility, enrollment and renewal procedures in 2011, according to a new report from the Kaiser Family Foundation.

The annual 50-state survey of Medicaid and CHIP eligibility rules, enrollment and renewal procedures, and cost sharing practices, conducted by the Kaiser Commission on Medicaid and the Uninsured with the Georgetown University Center for Children and Families, found that, despite continued fiscal pressures on states, eligibility policies remained stable in nearly all state Medicaid and Children's Health Insurance Programs during 2011.

[See also: 23 states split $296 million in CHIP enrollment incentives.]

The report cited the maintenance of eligibility requirements of the Affordable Care Act for helping preserve the benefit for low-income families during the recession and noted that without it, many states would likely have restricted eligibility and tightened enrollment rules. It also noted that many states have made technology investments in their programs aimed at increasing efficiency and lowering administrative costs, investments that should pay off in 2014 when health reform provisions increase the numbers of insured.

"While strained state budgets have taken a toll on administrative resources, states have sharpened their use of technology and streamlined their procedures to create more efficient programs, while also simplifying the steps for families to enroll in and renew coverage," Kaiser's report explained.

The kind of progress chronicled for children's coverage over the years through the Kaiser surveys provide a roadmap for successful implementation of Medicaid expansion in 2014 as part of health reform, said Cindy Mann, deputy administrator and director of Center for Medicaid, CHIP and Survey and Certification at the Centers for Medicare and Medicaid Services.

"But coverage expansion alone is not sufficient. So, we need to simplify the processes, coordinate the systems across programs, focus on technology and modernization, and take advantage of opportunities for outreach," she said at a briefing for reporters.

[See also: Comprehensive primary care lags for kids with public health insurance, study says.]

Most states held steady in their coverage of low-income individuals and children despite an environment of limited budgets and still too few job opportunities. In addition, federal funds from the American Recovery and Reinvestment Act that had buoyed state budgets expired during 2011, according to the report.

States largely maintained their coverage so they could meet requirements of the Patient Protection and Affordable Care Act to do so prior to 2014 when most of the provisions take effect.

However, 11 states increased their coverage to targeted populations last year, eight of them focusing on covering more children. For example, West Virginia enlarged CHIP eligibility to 300 percent from 250 percent of the federal poverty level. And Illinois, Texas and Vermont will remove the five-year wait to cover lawfully-residing immigrant children.

Coverage for low-income parents and adults continues to lag far behind that of children. That's because states cover children at up to 300 percent above the poverty level but cover parents and other adults at the poverty level or many of states at less than half of the poverty level, meaning $9,265 for a family of three in 2011.

"Above that, a parent earns too much for Medicaid," Mann said. That will change in 2014 when states will supply Medicaid coverage to those who earn up to 133 percent above the federal poverty level.

To ready their systems, CMS is footing most of the expense for states to design and implement upgraded or new eligibility and enrollment systems with a 90 percent federal match through 2015, the report said. The 90-percent match is key to state investment in technology. As of Jan. 1, 18 states have received approval for their system upgrades, when 11 others have sent CMS their plans.

States are using more technology to improve efficiency in their Medicaid and CHIP enrollment and renewal practices, most notably data matching with the Social Security Administration to verify citizenship. Others have added easier renewal options, express lane eligibility through other health and human service programs and enhanced online application functions. Nine states use the express-lane eligibility for children.

Massachusetts is the first state to receive approval to use the same process to renew parents in Medicaid.

Oklahoma is the only state that is fully automated, using an online, real-time eligibility determination system that is available 24 hours a day. Individuals can apply online and receive an immediate decision on their application after the system has queried various electronic data sources to verify eligibility. The state processes more than 1,000 applications daily, and 90 percent receive on-the-spot eligibility decisions.

Also, by concentrating on retaining those that are covered, states can reduce the inefficient and expensive administrative costs to close and re-open cases, as well as eliminate gaps in coverage, when eligible individuals churn in and out of Medicaid and CHIP over short periods of time due to changes in their earnings.

States have also established online or telephone renewal options and pre-populated forms with the family's information and requiring just a signature if circumstances are unchanged, according to the report.