|
Effective: December 1, 2006 |
|
|
15.10.05.10ar1 - Always Cost Effective (Archive) |
Archived: November 1, 2009 |
The following policies are considered cost effective by the Benefit Recovery Section (BRS) of DHS and do not require further review:
l Policies where annual covered medical expenses exceed annual premium costs by a 2:1 ratio if the client's medical condition remains the same as in the period reviewed.
Follow these steps to determine if a 2:1 ratio is met:
1. Review insurance payment reports or the Explanation of Medical Benefits (EOMB) to determine the amount of medical expenses covered by the insurance in the last 12 months.
2. Calculate the cost of health insurance premiums for the last 12 months. This is the annual premium amount.
3. Multiply the annual premium payments from Step 2 by two.
If this amount is:
n Less than the annual benefits calculated in Step 1, the policy meets the 2:1 ratio and the policy is cost effective.
Note: The household must also anticipate that the client's medical condition will stay the same.
n More than the annual benefits calculated in Step 1, the policy is not cost effective with a 2:1 ratio.
Example:
Galinda has health insurance coverage through her employer. She pays a premium of $75 a month. Galinda provided EOMBs received from her provider. The EOMBs indicate she has a monthly cost for testing of $100 and a monthly prescription cost of $75. She continues to need the same testing and prescriptions.
Action:
Galinda’s health insurance is cost effective because her annual covered medical expenses are greater than two times the cost of her annual premium.
1. Galinda’s annual covered medical expenses total $2100 {($75 + $100) X 12}.
2. Galinda pays an annual premium total of $900 ($75 X 12).
3. Galinda’s annual covered medical expenses are at least twice that of her annual premium. Her annual covered medical expenses must be at least $1800.
l Policies covering people who have AIDS or who are HIV positive when the premiums are not substantially increased due to the person's condition or policy conversion.
l Family coverage when the applicant's or enrollee's out-of-pocket premiums are $100 or less per month, if all family members are on MA or GAMC.
Example:
Paul applies for MA for himself, his wife, and their two children. He has group health coverage through his employer. The employer pays $200 per month. Paul pays $95.
Action:
The coverage for Paul and his family is cost effective because the premium he pays for family coverage is less than $100.
Paul is laid off while receiving MA and has the option of continuing coverage through COBRA. He must pay the full $295 premium.
Action:
A cost effective review must be completed. Determine if the policy meets any of the other criteria for always cost effective. If the policy cannot be determined always cost effective, make a cost effective referral.
l Policies covering a pregnant woman's maternity care are cost effective for the pregnant woman and any other MA-eligible household members covered by the same premium amount.
n A separate cost effective review is not required for other MA eligible household members if there is not an additional premium for other household members.
n Request a BRS review:
m If maternity coverage is unclear.
m At end of 60-day postpartum period.
n If there are other family members covered by the policy who are eligible for MA or GAMC determine whether their portion of the premium is cost effective under any of the other provisions in this section.
Make a cost effective referral to BRS if you cannot approve the other family members’ portion as cost effective.
Example:
Paula is pregnant and applies for MA. She has health insurance for herself, her husband and her daughter. The health insurance covers maternity care. Paula is the only family member who is eligible for MA.
Action:
Refer the case to BRS to determine whether the insurance is cost effective and the premium for the entire family can be paid.
Example:
Maia is pregnant and applies for MA for herself and her two children. She has health insurance that covers herself, including maternity care, and the children. Maia’s cost for family coverage is $98 per month.
Action:
The entire premium is cost effective:
m Maia’s portion is cost effective because it covers maternity care.
m The children’s portion meets two always cost effective reasons:
q The family premium cost is less than $100 per month.
q Maia is pregnant on MA with a health insurance policy covering maternity care and both children receive MA.
Note: If the children’s portion did not meet any of the cost effective provisions in this section, a cost effective referral must be completed.
l Children covered by policies when the child is receiving MA and:
n Is approved for TEFRA and the child's portion of the premium is $50 or less per month.
n Receiving IV-E or state adoption assistance, and the child's portion of the premium is $50 or less per month.
n Is living in an ICF/MR or nursing facility, and medical coverage through the policy is accessible to the child.
Note: Consider coverage to be accessible if providers covered by the policy are available within 30 minutes or 30 miles of the facility where the child resides.
n Is hospitalized.
Note: Request BRS to review the policy six months after discharge.
l Medicare Part A premiums when the client is eligible for either:
n Qualified Medicare Beneficiary (QMB).
n Qualified Working Disabled (QWD).
l Medicare Part B when the client meets both of the following:
n Enrolls timely (paying the base rate for coverage).
n Is not enrolled in a group policy which terminates with enrollment in Medicare.
l Policies covering long-term care facility (LTCF) residents when, at a minimum, coverage includes the Medicare co-insurance for the current nursing facility stay.
Note: Request BRS to review the policy at the end of three months.
For additional cost effective coverage information see the following sections:
l Cost Effective Health Care Coverage - MA and GAMC.