Reimagining Medicaid’s Health Insurance Premium Payment Program

By Health Ideas Staff
Nov. 15, 2019

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Medicaid Health Insurance Premium Payment (HIPP) programs helps maintain Medicaid as payer of last resort by using federal and state funds to purchase employer-sponsored insurance (ESI) for individuals and families otherwise eligible for Medicaid, if the cost of paying the premiums is less expensive than keeping them enrolled in standard Medicaid.

HIPP programs are becoming increasingly popular with state Medicaid programs. A growing cohort of states have revisited HIPP, and are adopting innovative program designs, new approaches and new strategies to engage members and employers.

Some states have focused on growth and expansion of an existing program, while others have moved to establish a new program.  One thing these states all have in common is that they are successfully putting in place or building toward an advanced HIPP model.  One that is streamlined, mandatory, capitalizes on technology and yields a high return on investment.

Let’s take a closer look at how some states are reimagining the HIPP program.

 States Building to an Advanced HIPP Model

Massachusetts Grows HIPP

In 2018, enacted legislation in Massachusetts established a new employer-reporting requirement called the Health Insurance Responsibility Disclose (HIRD) form to collect employer-sponsored insurance (ESI) information directly from employers. The new data began flowing into the mandatory HIPP program in 2019 to assist with the identification of potential HIPP members.

In 2019, the Commonwealth also began engaging members directly by leveraging behavioral science backed content and communication channels to maintain eligibility in HIPP. The HIPP program in Massachusetts has now grown to 24,000+ members.

Rhode Island Expands HIPP

Last year, enacted legislation in Rhode Island required the Executive Office of Health and Human Services (EOHHS) to expand their HIPP program beyond parents, children and pregnant women to include childless adults.  The HIPP expansion is effective 07/17/19 under newly adopted regulations.

Virginia Expands HIPP

The enacted 2018-20 biennium budget for Virginia included language requiring that the Department of Medical Assistance Services (DMAS) apply mandatory HIPP to the Medicaid expansion population.  The current HIPP programs in Virginia are voluntary.  The new law provides DMAS with a high degree of latitude to implement the new requirement.  The Commonwealth also issued proposed regulations to bring the HIPP program under the current Medicaid managed care model.

Utah to Establish a New HIPP

Early this year, Utah issued public notice on its new Section 1115 demonstration waiver spurred by legislation focused on amendments to Medicaid expansion-related policies.  The proposal pending before CMS establishes a mandatory HIPP program for adults with and without dependent children including the Medicaid expansion population.

Kentucky Creates a New HIPP 

In June 2019, the Kentucky Department of Medicaid Services adopted regulations establishing a mandatory HIPP program Kentucky HEALTH for all those Medicaid eligible with at least 12 months of access to cost effective ESI. Prior, the Kentucky HIPP program (KI-HIPP) was voluntary for all Medicaid eligible with access to cost effective ESI.

Nebraska Redesigns HIPP for Medicaid Managed Care

HIPP in Nebraska is currently voluntary with 280 Medicaid enrollees.  HIPP will become mandatory effective Oct. 1, 2020. In preparation, the Nebraska Department of Health and Human Services hired consultants to create a roadmap for improving systems, processes and operational effectiveness of the Nebraska HIPP program.  The State adopted regulations to support the new program, modernize the HIPP program and account for the Medicaid’s transition to managed care.

Indiana Bridges Transition from Medicaid to Commercial Insurance 

In July 2019, Indiana submitted an amendment to their Section 1115 Healthy Indiana Plan Waiver.  The amendment will allow the State to establish “Workforce Bridge Accounts” which will provide qualifying outgoing HIPP participants the ability to continue to use up the $1,000 of public funds for premiums, deductibles copayments and coinsurance for 12 months during their transition to commercial coverage.

Looking Ahead: What’s Next for HIPP

States stand to benefit from understanding the historic HIPP challenges, leveraging lessons learned and adopting best-practices, while taking full advantage of new Federal flexibilities to create advanced HIPP programs that provide the best options for members at greater cost savings to the state. If you’d like to learn more about HIPP policy in 2019, read our information sheet on the topic.

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