Express Lane Eligibility

1
Express Lane Eligibility

• Prepared for the National Academy for State
  Health Policy
• Stan Dorn
• The Urban Institute
• May 14, 2009

2
Topics to discuss

• Why this matters
• Whats the thinking behind Express Lane
  Eligibility (ELE)?
• Promising opportunities to use ELE

3
1. Why this matters
4
Most uninsured children are eligible for Medicaid
or CHIP
Sources Dorn, et al., Feb. 2009, applying
eligibility simulation model described in Dubay,
et al., 2007.
5
New financial incentives in CHIPRA

• Increased CHIP enrollment can raise future CHIP
  allocations
• And lower enrollment can cut future allocations
• Increased Medicaid enrollment can qualify for
  performance bonuses
• So long as state implements 5 of 8 best
  practices, which include ELE

6
2. Express Lane Eligibility (ELE) one rationale
7
The value added question

• When a family has already shown low income by
  filling out forms for one government agency, what
  is the value of requiring it to complete a
  similar form for a different government agency?
• How does that value compare to the consequences
  for
• Enrollment
• Household convenience and
• Administrative costs?

8
The impact of inertia and procrastination on
human behavior
Sources Sailer and Holden, 2005 Laibson (NBER),
2005.
9
3. Potentially promising applications of Express
Lane Eligibility (ELE)

• State income tax forms
• Food Stamps
• National School Lunch Program

10
State income taxes

• An extraordinary opportunity to locate uninsured
  children

11
Uninsured children who qualify for Medicaid or
CHIP, by legal requirement to file federal income
taxes and eligibility for federal EITC 2004
Source Dorn, et al., Feb. 2009.
12
Among various groups of uninsured children, the
estimated percentage whose families filed federal
income tax returns 2004
Sources Dorn, et al., Feb. 2009.
13
What about state income tax forms?

• Whats your states minimum income threshold for
  required tax filing?
• Does your state provide any refundable credits
  (e.g., an EITC or child care credit that
  supplements the federal credit)?
• Rememberif income is withheld from a paycheck,
  the worker may need to file a state tax return to
  get a refund

14
How it could work

• On tax form
• Require parents to identify their uninsured
  children
• Let parents request disclosure of tax data to the
  states health agency
• Very important step. Without it, parents must
  file 2 forms, an income tax form and a later
  health coverage form.
• In Iowa, the state mailed application forms to
  parents who identified their children as
  uninsured on state income tax returns. Only 10
  applied.
• Grant income-eligibility based on gross income
  (or AGI) and household size on income tax form
• Qualify children as citizens based on SSA data
  match (starting in 2010)
• Determine immigration status
• Intensive application assistance to obtain
  immigration evidence
• Can obtain in the enrollment phase
• In the meantime, can provide presumptive
  eligibility (PE) based on income alone
• Possible ELE based on SSA determination of
  permanent legal residence when issuing SSN

15
How it could work, continued

• If child is not eligible based on ELE, CHIPRA
  requires the family to have a chance to submit a
  standard application
• Collecting any remaining paperwork
• Can direct families to on-line forms
• CHIPRA allows electronic signature
• Can use CBOs, facilitated enrollers
• In a managed care state, can use MCOs
• Let the family pick an MCO
• If the family doesnt act, the state chooses an
  MCO
• Once the MCO has been chosen, the MCO must
  collect the final paperwork before capitated
  payments start
• Key no MCO contact until a plan is chosen

16
Possible concerns

• Parents may mislabel children as uninsured
• Confirm by running data match against
  Medicaid/CHIP files, perhaps Medicaid TPL records
  of private coverage
• Revenue agency may resist changing tax return
• IA, MD, NJ already use return to ask re
  childrens coverage
• MA uses return to request proof of coverage for
  adults
• Revenue agency may be concerned about violating
  the confidentiality of tax data
• Consent to disclosure should address those
  concerns
• Self-employment income
• For tax purposes, can deduct from even gross
  income
• Meals
• Entertainment
• Depreciation etc.
• Could add back these deductions in calculating
  gross income or adjusted gross income, for
  purposes of ELE

17
Final concern tax information is so last year!

• CHIPRA expressly allows using tax returns for ELE
• Can only use within a reasonable period,
  defined by state
• Multiple federal programs already do this
• Prior-year tax returns establish current-year
  eligibility
• What if your situation changed?
• If income rose this year, eligibility not reduced
  until next year
• If income fell this year, can immediately apply
  for extra help
• No application required if you file a tax form
  (although an application process is available as
  a fall-back)
• Once exception applications are needed for
  college student aid. However, President Obama
  proposes to replace them with a check-box on
  the federal income tax return.

18
Income tax returns and eligibility for various
federally-funded, means-tested benefits
19
Food stamps basic eligibility rules

• Income eligibility
• 130 percent of FPL in gross income
• 100 percent of FPL in net income
• Must be citizen or legal permanent resident (but
  no 5-year bar)

20
How food stamp ELE could work

• Identify uninsured children
• Match food stamp eligibility files with Medicaid
  and CHIP files to identify food stamp children
  not receiving health coverage
• Permitted by pre-CHIPRA food stamp law
• Let parents opt out
• Send notice explaining that, unless they object,
  data from their childrens food stamp files will
  be used to determine potential eligibility for
  health coverage
• Determine eligibility
• Automatically find, via ELE, that
• All food stamp children are income-eligible for
  Medicaid
• All immigrant food stamp children are legally
  residing in the U.S., for purposes of Medicaid
• Maybe not in a state with a 5-year bar for newly
  arrived immigrants
• Establish citizenship via SSA data-match (2010
  and later)
• Parents must consent before enrollment

21
Trade-offs

• Potential advantages
• Huge efficiency gains. Almost no value is added
  by requiring a separate health application. Among
  uninsured food-stamp children, only 1/10th of 1
  are ineligible for Medicaid and CHIP.
• Statistic applies to states that use CHIPRA to
  cover recently arrived immigrant children
• In other states, almost all uninsured, citizen
  children receiving food stamps qualify for
  Medicaid and CHIP under existing law
• Matchable, accessible data
• Potential disadvantages
• Not enormous reach 12.4 percent of eligible,
  uninsured children received food stamps in 2004
• 41 of food stamp children without Medicaid or
  CHIP are privately insured
• Need to do data match with information about
  private coverage
• Some questions about categorically eligible Food
  Stamp recipients good argument for applying
  ELE, but no CMS ruling
• Families with TANF, SSI, GA can automatically get
  Food Stamps

22
National School Lunch Program (NSLP) eligibility

• Income eligibility based on gross income
• Up to 130 percent of FPL, free school lunch
• 130-185 percent of FPL, reduced-price lunch
• No immigration status requirements

23
How ELE could work with NSLP

• On NSLP application form, parents can
• Identify any uninsured children and
• Consent to disclose NSLP and other data to
  determine childrens eligibility for free or
  reduced-cost health coverage
• If children receive free lunches, use ELE to
  automatically qualify them as income-eligible for
  Medicaid
• If children receive reduced-price lunches, either
  
• Use NSLP income-determination to establish
  income-eligibility for Medicaid/CHIP or
• Provide PE and target children for intensive
  assistance to determine ongoing eligibility
• For anything beyond PE, state must establish that
  NSLP children are citizens or legal immigrants
  
• Collection of remaining paperwork
• Can follow income tax approach

24
Trade-offs

• Potential advantages
• Broad reach 59 percent of uninsured, low-income
  children live in families who participate in NSLP
• Potential disadvantages
• In many states
• Limited digitization of matchable enrollment
  records
• District-by-district implementation is time
  consuming
• Schools have other priorities
• Illinois law bases a districts receipt of
  poverty-related school financing on, among other
  things, Medicaid and CHIP receipt
• Error rates
• For free lunches, not a problem. NSLP errors do
  not extend health coverage to very many otherwise
  ineligible children. Thats because maximum
  income eligibility for free lunches is far below
  CHIP income limits.
• For reduced price lunches, NSLP errors are more
  consequential.

25
Recipients of free and reduced-price school
lunches, by income-eligibility for health
coverage (based on actual income)
Source Dorn, April 2009.