By: Darin Gordon
Editor’s Note: Darin Gordon, director of TennCare, was the featured speaker at a Leadership Health Care Executive Roundtable on May 19, 2011. In his role, he oversees the administration of the state’s Medicaid program that provides coverage for 1.2 million Tennesseans, The program is widely recognized as one of the mo
st innovative and respected Medicaid programs in the U.S. View the full presentation.
The new health care reform law, called the Patient Protection and Affordable Care Actor PPACA, is a significant topic warranting the attention of every governor, state insurance commissioner, and Medicaid director in the country. The new law is broad, touching many areas of the health care system and encompassing a wide variety of changes.
The changes include a series of mandates for states and insurance companies, interspersed with optional grants and demonstration projects in which states may choose to participate as appropriate.
The biggest change for Medicaid is the massive increase in enrollment that is expected in just over 30 months. Effective January 1, 2014, Medicaid will be expanded to include virtually every person in the country who is under 65 and not on Medicare and whose income does not exceed 138% of poverty (a little over $25,000 per year for a family of three). Many of the old categorical distinctions that have been so much a part of Medicaid will be gone.
Based on TennCare estimates calculated this past year, we expect an increase of approximately a quarter of a million new enrollees in 2014 as a result of PPACA. While much of the funding for the new eligibles will come from the federal government for the first few years, state financial obligations for this expansion will grow. In preparing for this new population, the state must do several things. For example, the state must research and evaluate the anticipated demographic and clinical make-up of this new population; it must analyze and model various benefit design options; and it must run scenarios to determine the sufficiency of provider network capacity to accommodate the influx of new people.
Another big change required by PPACA is the implementation of state-based Health Insurance Exchanges by January 1, 2014. Every state must decide whether to run its own Exchange or allow the federal government to do it. The Exchange, as envisioned in PPACA, is something no one has seen before. While Massachusetts and Utah both currently operate an exchange, neither of them is believed to meet the requirements under PPACA.
The PPACA Exchange must be able to perform rapid eligibility determinations, sorting out who is eligible for which public program and providing those wishing to purchase insurance with the tools they need to make informed choices about which plans are most appropriate for their needs. The Exchange must administer the subsidies that will be available to persons with incomes less than 400% of poverty for use in purchasing insurance products. The Exchange must also conduct outreach to help people become aware of what it has to offer.
And even though the Exchanges are not required to begin operating until 2014, if they are state-based, operational readiness must be demonstrable by January 1, 2013, so that the secretary of the Department of Health and Human Services can certify them as being ready to open on time. If they are not ready, the federal government will take over.
The challenges associated with health care reform are enormous. There is much to be done to meet the requirements set forth in the law and very little time to achieve compliance. While this is going on, states must be cognizant of the various Congressional and legal activities that are taking place on the national level to make sure Medicaid administrators are able to quickly adapt to whatever changes may occur. A confounding factor is that states are having to adapt to the significant loss in state revenues generated by the Great Recession, some of which are forcing changes to the very programs PPACA seeks to expand. It is within these competing and ever shifting realities that state administrators must lead.
Darin Gordon directs the TennCare program in Tennessee, as well as the Cover Tennessee products, the Office of eHealth Initiatives and the Division of State Health Planning. He has overall responsibility for planning for the Health Insurance Exchange for Tennessee. A 15-year veteran of state government, Gordon also serves in several national roles. He is vice president of the National Association of Medicaid Directors (NAMD) and national chair for the Quality Technical Advisory Group for Medicaid. He has previously served as a senior advisor to the co-chair for the National Governors Association Health Reform Task Force.