`Kinder, Gentler' HIAA Plan Expands Medicaid Eligibility
WASHINGTON - Carl J. Schramm proposed to Congress a 'kinder, gentler' Health Insurance Association of America plan that expands Medicaid, increases 'spend down' protection and allows states to 'buy out' the newly employed poor from Medicaid.
Under the new HIAA proposal, Americans with incomes below the poverty level, and with limited assets, would be eligible for Medicaid, regardless of family structure, age or disability status, said Mr. Schramm, HIAA's president, in testimony at the first hearing of the 101st Congress on health insurance coverage and reform.
'We recognize that funds may not be available initially to allow full coverage up to the poverty level,' he said. 'Therefore, HIAA believes priority should be given first to younger children and pregnant women, next to older children and finally to other populations.'
HIAA also proposed that persons with incomes above the federal poverty line, but below 150 percent of the federal poverty level be allowed to buy 'first-dollar' coverage of a limited package of primary, preventive and related ambulatory care through state Medicaid programs.
In addition, he said those not otherwise eligible for Medicaid because of higher incomes should become eligible, once out-of-pocket medical expenses reduce their remaining income to the federal poverty level. This would provide some 'coverage of last resort,' he noted.
The current Medicaid asset test should be 'liberalized,' according to Mr. Schramm, to make sure working families do not have to impoverish themselves to obtain basic primary care. Homes and cars of normal value should be protected, he said.
HIAA's president suggested the limit on liquid assets be liberalized somewhat, perhaps to the $12,000 the last Congress found acceptable for spouses of nursing home residents.
Mr. Schramm proposed that persons with too high an income to be eligible for Medicaid should become eligible for full Medicaid coverage once their out-of-pocket medical expenses reduce their remaining income to the federal poverty level. He urged that all states establish 'spend down' coverage at the federal poverty level.
Working Medicaid eligibles should make use of employment-based health insurance where it is available, he said, and to make this possible, state Medicaid programs should be given the option of paying - and receiving federal matching funds for - the employee's share of the private insurance premium.
In addition, to assist low-income persons returning to work, government support should be provided for other necessary services during a transition period, according to Mr. Schramm. He cited the recently enacted Welfare Reform Act, which extends Medicaid eligibility for 12 months after a person returns to work.
Participating employers also should be required to make the same premium contribution for the 'buy out' of Medicaid-eligible employees as they do for other employees, Mr. Schramm said.
Other segments of the HIAA proposal are unchanged and include: insurers offering more affordable coverage, including prototype plans; ERISA preemption of state-mandated benefits for insured employee plans and self-insured plans; coverage of uninsurable individuals and employer groups through qualified state pools and reinsurance vehicles and 100 percent tax deduction for the self-employed who provide health insurance for employees.
