Kentucky is expanding a program that pays for Medicaid enrollees to get on their employer insurance. As of Monday, family members of people in the program can also apply for coverage. It’s a move aimed at saving the state money, but also one that critics worry could put enrollees in financial jeopardy.
Under the Kentucky Integrated Health Insurance Premium Payment program — or KI-HIPP — the state will pay an employer-sponsored health insurance premium for some Medicaid enrollees or their family members, if it’s cheaper than keeping them on Medicaid.
As of October 30, the state program was paying the health insurance premiums of 220 Medicaid members who were enrolled in employer-sponsored coverage. These are people that qualified for Medicaid because they have a lower income, but also had access to an employer health plan. State officials say the program saves about $800,000 annually for those 220 people.
Under the expansion announced this week, the program will now cover family members who live with a Medicaid enrollee. That might include parents who don’t have Medicaid coverage, even though their children are enrolled in the program.
“For instance, the parents don’t meet eligibility guidelines but because of income, a child does because of what their needs may be, like an acquired brain injury, something of that sort,” parents can now apply to have employer coverage paid for, said Teresa Shields, KI-HIPP program manager.
Anyone using KI-HIPP will have to pay any premiums up front. Then, they’ll have to submit paperwork to get reimbursed. They also have to submit income information every pay period.
Shields says the program opens up expanded options for an enrollee or family member, because it increases their potential network of doctors to both Medicaid and their employer’s network. But it also requires enrollees to be much more vigilant, because if they visit a doctor that doesn’t take Medicaid, they’re on the hook for any costs associated with the visit that the employer plan doesn’t cover.
Dustin Pugel, a policy analyst with the Kentucky Center for Economic Policy, said this is a serious risk for an enrollee.
“There are some circumstances in which it could be beneficial for families, especially, but that comes with a huge asterisk,” Pugel said.
There’s another risk to enrolling in the program: if an enrollee’s income raises and they lose Medicaid eligibility, that person is still on the hook for potentially-unaffordable premiums and other costs associated with their employer plan. This has happened to a handful of people since the state announced the KI-HIPP program in August.
As of Nov. 4, there were 195 KI-HIPP members, 25 fewer than the previous week. Shields said that was mostly because those enrollees had an increase in income and no longer qualified for Medicaid, so the program stopped paying for employer coverage.
Jason Dunn, a policy analyst at Kentucky Voices for Health, said he’s not sure how employers will treat people previously covered by KI-HIPP if they can’t afford the payments. He said that Medicaid Commissioner Carol Stecke said the state will follow up with those previous enrollees during a meeting in Frankfort on Monday.
“Commissioner Steckel committed to following up with those discontinued to see what has happened with them,” Dunn said. “It’s our hope that they were allowed a chance to access more affordable coverage through a marketplace plan, but we just don’t know yet.”
Pugel said this is exactly what he and other critics were skeptical about when the program launched.
“On paper, it’s a good opportunity, but in reality the members face a lot of financial risk, and it’s not clear to me that the cabinet is sufficiently warning folks about that risk before they sign up,” Pugel said.