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Monday, May 13, 2019

Maryland’s Easy Enrollment Health Insurance Program: An Innovative Approach to Covering the Eligible Uninsured

Stan Dorn

Director of the National Center for Coverage Innovation and Senior Fellow, Families USA

Stan Dorn, Maryland’s Easy Enrollment Health Insurance Program: An Innovative Approach to Covering the Eligible Uninsured, Health Affairs Blog, 5/13/2019, https://www.healthaffairs.org/do/10.1377/hblog20190510.993788/full/

Copyright ©2015 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc. 

The threatened repeal of the Affordable Care Act (ACA), major regulatory changes that affect ACA implementation, and a likely 2020 debate over Medicare for all have understandably captured the health policy community’s attention.  As a result, relatively little discussion has recently focused on a basic problem that loomed quite large in the past: enrolling the eligible uninsured into available coverage.  

The problem has not gone away. According to Urban Institute research, nearly three-fourths (74 percent) of the country’s 30 million uninsured under age 65 were eligible for health coverage programs in 2017 but not enrolled:

25.0 percent of the uninsured qualified for Medicaid or the Children’s Health Insurance Program (CHIP);

25.1 percent qualified for premium tax credits (PTCs) that can help buy private coverage in health insurance marketplaces; and

24.4 percent could have purchased private coverage in their state’s marketplace but were ineligible for PTCs because of income (15.5 percent) or available employer-sponsored insurance (8.9 percent).  

The remainder were either undocumented immigrants (16.2 percent) or people who were ineligible for Medicaid because of their state’s decision not to expand coverage as permitted by the ACA (9.4 percent). 

Based on unpublished results from the Urban Institute study, 18.1 million out of 25.5 million uninsured adults under age 65, or 71 percent, qualified for health coverage programs. Such eligibility was even more widespread for children. Out of 4.6 million uninsured children under age 18, 2.8 million, or 61 percent, qualified for Medicaid or CHIP. Fully 94 percent of uninsured children were eligible for a health coverage program—either Medicaid, CHIP, PTC-funded insurance, or marketplace coverage purchased without federal financial assistance.

It is thus noteworthy that a major innovation to enroll the eligible uninsured is being enacted on a bipartisan basis in Maryland. Today, Governor Larry Hogan (R-MD) is expected to sign into law the Maryland Easy Enrollment Health Insurance Program (MEEHP). Championed by two veteran Democratic legislators (Senator Brian Feldman and Delegate Joseline Peña-Melnyk), the bill passed the State Senate on a unanimous, 46-0 vote and the House of Delegates by a broad bipartisan margin of 123-15. 

What’s in the new Maryland law?

MEEHP represents the country’s first attempt to use income tax filing as an immediate on-ramp to health coverage. By simply checking a box on their state income tax return asking the exchange to determine their eligibility for free or low-cost insurance, an uninsured tax filer can have relevant information from their return sent automatically to Maryland’s health insurance exchange. The exchange then uses that data and other available records to determine the individual’s eligibility for Medicaid, CHIP, and PTCs. If electronically-accessible data sources do not establish eligibility, the exchange reaches out to the household proactively using whatever communications channel the tax filer requested on their return. If no such channel was requested, the exchange uses telephonic or electronic outreach and records the results, whenever possible.

People who qualify for Medicaid or CHIP are invited to choose a managed care organization by a specified date. If they neither choose a plan nor opt out of coverage, they are enrolled in a Medicaid plan by default. Special arrangements ensure that, if the tax filer or a member of their household cannot be confirmed as a U.S. citizen, the exchange obtains an additional layer of affirmative consent prior to moving forward. That way, families with immigrants can assess their own “public charge” risks before an application for benefits is formally submitted on their behalf. 

Uninsured tax filers with incomes too high for Medicaid or CHIP have a brief special enrollment period (SEP) for enrolling into the individual market. The SEP is triggered by the filing of a return with the relevant box checked, so long as the return is filed before a date specified by the exchange (presumably April 15 or earlier). The exchange determines PTC eligibility as quickly as possible, encouraging uninsured consumers to obtain insurance and helping them select an appropriate plan. The exchange is authorized to compensate tax preparers or other entities based on the number of clients who successfully enroll into health coverage. 

In terms of the tax form itself, a separate schedule gathers information about health coverage. A tax filer who identifies uninsured members of their household must indicate whether or not they want the exchange to use information from the return to determine the household members’ eligibility for coverage.  That form also asks for the age of each uninsured individual for whom coverage is requested as well as other details identified by the exchange as essential to determining eligibility, with one important limitation: no questions on the tax return can ask about citizenship or immigration status. 

The language of the check-box is supposed to be as simple, clear, and easy to understand as possible. To help achieve that goal, the state’s tax agency can provide explanatory details in the instruction booklet for the return, rather than the return itself. The state tax agency must provide draft return language to an advisory committee for review and comment, before the form is finalized. 

When the legislative session began, the bill also imposed an “individual responsibility payment” on consumers who could afford insurance the previous year but had not enrolled. That element of the proposal, known as the “Down Payment Plan,” let an uninsured tax filer avoid penalties by signing up for coverage immediately after filing their tax return—in effect, converting their tax penalty into a down payment on health insurance. Many observers expected this approach to yield significant enrollment gains, since tax filers could avoid a relatively large, near-term cost by committing to make much smaller, monthly payments over time. 

Conversations among stakeholders revealed that information technology issues would prevent the state tax agency from implementing the Down Payment Plan before January 2022. As a result, lawmakers decided, before enacting tax-based enforcement of an individual requirement to obtain coverage, to see how many uninsured could be enrolled, using MEEHP’s purely voluntary, tax-based approach. To lay the groundwork for future consideration of something like the Down Payment Plan, the legislation requires the state tax agency to develop the capacity to collect and track individual-responsibility payments; and it calls for a study of the potential impact of individual-responsibility requirements, implemented through the Down Payment Plan or other enrollment-focused strategies. 

What do we know about MEEHP implementation?

The statute provides that the new, tax-based enrollment system takes effect in January 2020, when returns are filed for taxable year 2019. However, if the state tax agency finds that implementation on that schedule is not feasible, implementation can be delayed by one year, until January 2021. 

Preliminary indications suggest that the tax agency may not request a delay. The likely path forward will involve an Application Programming Interface (API) between the tax agency’s information technology (IT) system and the exchange’s IT system. Serious implementation discussions are expected to begin within weeks of the May 13 bill signing.

What results do proponents anticipate?

Numerous eligible uninsured file tax returns. With MEEHP, Maryland’s uninsured tax filers can learn about available financial assistance for which they qualify and seek health insurance, in many cases by simply checking a box on their state income tax return. 

Before the ACA’s main coverage provisions went into effect, Urban Institute research analyzed the prevalence of federal income tax filing among the uninsured who were slated to receive coverage under the ACA. The estimates for Maryland were typical of other states that had expanded Medicaid eligibility. Federal tax returns were estimated to include:

61 percent of Maryland’s uninsured, Medicaid-eligible adults;

71 percent of the state’s uninsured, Medicaid-eligible children; and

89 percent of uninsured Marylanders slated to qualify for PTCs.

The applicable percentages have surely changed since the period covered by this study, but more recent Urban Institute estimates continue to show a strong nexus between tax filing and eligibility for insurance affordability programs. At the national level, earned income tax credits were claimed in 2017 for 61.8 percent of uninsured children eligible for Medicaid or CHIP; 38.3 percent of uninsured adults who qualified for Medicaid or CHIP; and 43.1 percent of all uninsured who qualified for PTCs with income at or below 200 percent of FPL. Additional uninsured consumers did not claim an EITC but still filed tax returns because of legal filing requirements, other available tax refunds, or other reasons. 

Not only does the tax-filing moment provide a remarkable opportunity to identify the uninsured, MEEHP’s leveraging of tax-filing could overcome one of the most serious obstacles to coverage: namely, a lack of information about available assistance.  In 2017, only 51 percent of the uninsured and 45 percent of the uninsured with incomes below 250 percent of FPL knew that financial assistance to help pay for health insurance was available. Fully 40 percent of the uninsured did not even know that health insurance exchanges existed, including 43 percent of those below 250 percent of FPL. MEEHP lets the uninsured learn about the available assistance for which they qualify by simply checking a box on their tax return.

More than 100,000 uninsured Maryland residents are eligible for premium-free coverage but are not enrolled, including more than 15,000 children who qualify for Medicaid or CHIP and over 36,000 Medicaid-eligible adults. MEEHP presents these families with a simple, streamlined path to coverage. Their enrollment would slow the rise of premiums for the insured, both because of an improved risk-pool in the individual market and because fewer uninsured would generate unpaid bills that pressure hospitals to raise charges on insurers. The Maryland Easy Enrollment Health Insurance Program, enacted with broad, bipartisan support, could prove helpful in many other states and potentially at the national level—wherever policymakers are interested in helping uninsured families obtain coverage for which they qualify.