COD E R E D

Medicaid and the State Children’s Health Insurance Program in Texas:Appendix D. Alternative HIFA ProposalsThis proposal for expansion of coverage to parents and childless adults is a three-stepapproach:1) Consider a hypothetical section 1931 expansion to parents. The 1931 expansion wouldrequire a state plan amendment (not a waiver) and would expand Medicaid to all parentsof children under 19 up to a certain agreed-upon income. It is called “hypothetical”because the state would not actually implement the 1931 expansion in this plan unlessthe next two steps were going to be implemented, but by saying that the state isconsidering it, the state can use this expenditure projection as the “without the waiver”projection in a test for budget neutrality for the 1115 HIFA waiver (1115 waivers have tobe budget-neutral but 1931 expansions do not, so 1931 would raise the expenditurelevel that the HIFA waiver would have to keep within).2) Propose a HIFA waiver reducing benefits and applying cost-sharing to this newpopulation. The HIFA waiver could propose to waive the requirement that optionalpopulations must receive the same benefits as mandatory populations. HIFA guidelinesalso say that states can require a higher level of cost-sharing on optional and expansionpopulations.3) Propose that the HIFA waiver expand a reduced benefits package and cost-sharing touninsured childless adults. This would use the savings from the reduced benefitspackage and cost-sharing implemented to extend Medicaid to childless adults under acertain income. These benefits would be the reduced package offered to the 1931expansion population, and enrollment could be capped if needed to control costs.This model does not provide as many benefits as the traditional Medicaid benefits package tothe new enrollees, however, it does not take away any benefits from current Medicaid eligibilitygroups, and it extends coverage to additional adults without health insurance.The cost estimates in the following table were created in 2002 and used the followingassumptions: 1) Texas Medicaid matching rate of $.5999 for 2002, 2) used March CurrentPopulation Survey number of uninsured parents and childless adults averaged over last threeyears, 3) decreasing participation rates as premiums increase as reported in an article inInquiry, 4) a specific phase-in period, 5) specified average costs per participant, and 6) a 6percent inflation factor. (See Kegler pp. 100-112 for more details.) Note that costs, number ofpotentially eligible people, and other factors may have changed in the past three years andthese numbers are for illustration onlyB-58