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Effective: February 1, 2009 |
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15.10.05ar4 - Cost Effective Health Care Coverage - MA and GAMC (Archive) |
Archived: November 1, 2009 |
Medical Assistance (MA) and General Assistance Medical Care (GAMC) clients are required to maintain or enroll in other health care coverage if it is determined to be cost effective.
More information on cost effective coverage can be found in the following sections:
l Steps in a Cost Effective Determination.
What is Cost Effective Coverage?
Medicare Cost Effective Requirements.
What is Cost Effective Coverage?
Cost effective coverage is other health care coverage for which the amount paid for premiums, coinsurance, deductibles, and other costs is likely to be less than the amount paid by MA or GAMC for an equivalent set of services. Cost effective coverage could include, but is not limited to, coverage through:
l COBRA.
l Individual health care coverage.
l Long-term care insurance.
l Medicare.
Example:
Orelia is covered by an HMO through her employer. She pays a $25 premium each month. Orelia applies for MA and is eligible without a spenddown. She receives $400 of prescriptions each month.
Action:
The HMO coverage Orelia receives through her employer is cost effective because the cost of maintaining her health care coverage is less than the cost DHS would pay to cover her prescriptions. Orelia must continue her HMO coverage in order to maintain MA eligibility.
Clients must cooperate in determining the cost effectiveness of any other individual or group health care coverage they have or any group health care coverage for which they may be eligible.
Clients must provide information about the plan and complete the Referral for Cost Effective Health Insurance Review (DHS-2841).
In general, clients who are enrolled in cost effective individual or group health care coverage must maintain that coverage to be eligible for MA or GAMC if the premiums are paid by the local agency.
l Clients who become eligible for cost effective group health care coverage must enroll in that coverage to be eligible for MA or GAMC. This includes enrolling in group health care coverage during an open enrollment period.
l Adult enrollees who disenroll from cost effective group health care coverage after MA or GAMC enrollment are ineligible for MA or GAMC until the next open enrollment period for that group plan, unless:
n They are allowed to enroll due to a special enrollment period. They must re-enroll to reestablish MA or GAMC eligibility.
n After disenrolling from cost effective coverage, they are not permitted to re-enroll. The person must provide written documentation of inability to re-enroll to be eligible for MA or GAMC.
l Do not deny or close eligibility for people who do not enroll or maintain enrollment in cost effective health plans if they cannot do so on their own behalf.
l Require applicants or enrollees who are eligible to continue group health care coverage through COBRA to cooperate with cost effective insurance requirements.
l Contact the DHS Benefit Recovery Section (BRS) if the client indicates he or she is unable to use the cost effective coverage because there are no providers for that coverage in the area.
Example:
Auggie’s dad provides his insurance. His dad lives in New Mexico and the provider only supplies coverage in that state.
Action:
Contact BRS regarding Auggie’s policy. Continue his eligibility.
Some employers with group health care coverage offer a special enrollment period. During a special enrollment period, an employee has an opportunity to enroll in group health care coverage without having to wait for an open enrollment period. Group health care coverage may provide individuals with an opportunity for special enrollment if they either:
l Initially declined group health care coverage because they had alternative coverage but since have lost that alternative coverage.
l Have new dependents through marriage, birth or adoption.
Note: Other life events such as marriage, divorce or a new job may result in the individual having the opportunity for special enrollment. Opportunity to enroll will depend on the individual’s circumstance and policies that may pertain specifically to the health plan.
Clients with a change in health care coverage or a change in dependents must request a special enrollment period from the employer, if available, following program provisions. An employer may request a Certificate of Creditable Coverage (COCC) to verify eligibility for special enrollment.
l Adult applicants who disenroll from or decline an offer of cost effective group health care coverage prior to their MA or GAMC application may be eligible for MA or GAMC.
n The client must contact the employer to inquire about a special enrollment period.
n Require the client to enroll in the cost effective plan if a special enrollment period is available.
n Continue eligibility and track for the next open enrollment period if a special enrollment period is not available. Require the client to enroll in the cost effective plan at that time.
Medicare Cost Effective Requirements
Evaluate cost effective Medicare for people who qualify for Medicare but do not qualify for the Buy-in or for a Medicare Savings Program. Certain health care programs may pay the cost of premiums for Part A or Part B and other Medicare cost-sharing if it is determined cost effective following a review.
Do not include people entitled to premium-free Medicare Part A, or eligible for QMB or QWD in this review.
Note: Follow the Steps in a Cost Effective Determination for people who must pay a premium for Part A but who are not eligible for the Buy-In or an MSP.
Require applicants or enrollees who qualify for Medicare Part B to enroll or remain enrolled in Medicare Part B. A cost effective review is not necessary.
Exception: Make a cost effective referral if either of the following occur:
n The person has to pay an increased premium for Part B due to late enrollment.
Exception: For MA-EPD clients, do not refer to BRS if an enrollee’s income is greater than 200% FPG. Do not count spousal income in this determination.
n The person has coverage through an employer group health insurance plan that is permitted as a substitute for Part B and would automatically terminate the person enrolled in Medicare Part B.
l Disabled people who are eligible for MA and Medicare Part C (Medicare Advantage) may cancel their Medicare Part C coverage even if it is determined to be cost effective. The person must then enroll in a Medicare Part D plan to have prescription drug coverage.
Note: An MA enrollee who chooses to continue Medicare Part C will not have any cost-sharing expenses required for Medicare Part D covered drugs.
l Medicare beneficiaries eligible for MA, whether disabled or age 65 or over, may cancel non-Medicare group health insurance, with or without prescription drug coverage, regardless of whether that coverage is cost effective, without penalty. A person who cancels group health insurance that includes prescription drug coverage must then enroll in a Medicare Part D plan to get prescription drug coverage.
Note: MA or GAMC will not pay any co-payments or other cost-sharing required by a non-Medicare group health insurance plan for any Medicare Part D covered drug. An enrollee who chooses to continue non-Medicare group health insurance, that is not cost effective may use the premiums and other cost sharing they incur to meet a spenddown.
l Medicare supplement insurance (also known as Medigap policies) are never cost effective.
Refer enrollees to their insurance products’ benefit administrators if they have questions about whether they should keep or drop their current coverage. Enrollees should learn about all the implications before they make this decision.
If MA or GAMC ends, notify the client that MA/GAMC will no longer pay premiums on the cost effective policy. Use the appropriate MAXIS SPEC/LETR.
See TEMP manual TE02.13.48 (Cost Effective SPEC/LETR) for more information on using MAXIS SPEC LETR to notify clients of decisions on cost effective health insurance payments.
People whose MA or GAMC ends will automatically receive a Certificate of Creditable Coverage (COCC) two months after closure. Request the COCC following your agency's procedures if the former enrollee needs it sooner.