Premium Assistance Demonstrations: The Challenges of Interagency and Public/Private Coordination

Premium Assistance Demonstrations: The Challenges of Interagency and Public/Private Coordination

Medicaid 1115 Demonstrations Brief
Published: Jun 01, 2017
Publisher: Baltimore, MD: Centers for Medicare & Medicaid Services
Associated Project

New Approaches for Medicaid: The 1115 Demonstration Evaluation

Time frame: 2014-2020

Prepared for:

U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services, Center for Medicaid and CHIP Services


Karina Wagnerman

Three states—Arkansas, Iowa, and New Hampshire—expanded their Medicaid programs using section 1115 demonstration authority to test a new approach to providing premium assistance to people with low incomes. These states designed and implemented demonstrations that support Medicaid beneficiaries’ purchase of coverage from qualified health plans (QHPs) based on those available in the Federally Facilitated Marketplace. Effective design and implementation of Marketplace premium assistance programs requires a high degree of interagency and public/private coordination. During the planning and implementation phases, state Medicaid agencies, insurance departments, and insurance carriers held frequent discussions to understand differences in the regulatory environments of Medicaid and commercial health plans and to create operating agreements that specify their respective responsibilities. Implementation issues arose in the areas of rate-setting, benefits and benefit coordination, cost-sharing, benefit appeals, datasharing, and guaranteed issue regulations. States formalized many of the agreements that resolved these issues in memoranda of understanding between Medicaid agencies and insurance carriers.

Understanding the implementation process and the challenges that arise is important not only for states that are interested in this type of premium assistance but also for evaluators, who should account for key program features when designing comparison groups and interpreting results. For example, any examination of beneficiaries’ access to care and health outcomes in these premium assistance programs should account for the specific enrollment processes for medically frail individuals and pregnant women, which differ from those for other Medicaid-eligible adults in QHPs. In addition, the implementation process also illuminates data issues that may constrain evaluators’ ability to assess these programs. Enhanced data-sharing systems and more comprehensive data agreements may make it easier for Medicaid agencies and carriers to work together and would facilitate accurate assessments of demonstration performance.

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