Case Management

“Painless” Administrative Ways for
States with Budget Shortfalls to
Preserve or Increase Medicaid and
S-CHIP Program Funding

D: Electing the Medicaid Eligibility Option to Offer
COBRA Premium Payments to Newly-Disabled and
Newly-Unemployed Individuals and Families

Thomas P. McCormack
05/07/04

"Painless " TOC Medicaid Main Page

Federal Medicaid law offer states a little-known eligibility option: They can get federal
matching funds to pay COBRA premiums for anyone---even those not in federally-
matchable eligibility categories like the aged, the disabled or families with children---
if such persons have countable income below 100% of poverty.

Many, many potentially costly cases---cases who would surely and eventually wind up
on Medicaid as expensive drains on state funds---are offered the right to continue their
job health insurance, but at their own cost, when they leave employment because of
poor health, the death of a bread-winning employed spouse or parent or layoffs. Such
persons must begin to pay very costly COBRA health insurance premiums within 60
days of being notified in writing of their rights by their former employers.

But almost all those leaving work due to poor health and those being laid off (or losing
a bread-winner spouse or parent) are completely broke when this occurs! Moreover,
those in poor health almost always still face the many-months-long, exhausting
process of being declared “disabled” by the Social Security Administration. (And,
unless they have children under 19, they can’t become eligible for Medicaid until
they are declared disabled!)

What happens in practice is that almost all those leaving work forfeit their rights to
COBRA health insurance continuation because of a immediate lack of funds to pay
the premium .Yet, eventually most or even all of them will find their way onto the
Medicaid rolls as often-quite-costly cases: those laid off who have families, after a
few weeks or months going through their unemployment insurance, savings
and resources; those childless persons in poor health months later, after they’re
found disabled and eligible for SSI or SSDI. But by then COBRA has long-expired,
and their expensive medical care must be paid for by Medicaid alone without any help
from the forfeited employer health insurance!

States can work to keep former employers’ health insurance in force through the
COBRA Continuation Beneficiary eligibility option—and thus save millions in costs that
the Medicaid program would otherwise have to pay alone--- by taking several proactive
steps:

Take the option for your state's Medicaid program---only a few states have so
far taken this option.
Train TANF, General Assistance (Temporary Disability Assistance) and food stamp
intake staff on the availability of the COBRA coverage. These staffs are often the
most likely first stops for newly-disabled or newly-unemployed persons---and thus
most able to timely inform such persons about Medicaid’s COBRA payment
program before COBRA rights lapse 60 days after receiving written notification.
Train Social Security/SSI, unemployment insurance intake staff where there are
such programs, State Disability Insurance intake staff; personnel and union staff
at employers planning layoffs; hospital social workers and indigent patient
financial counselors who work with the seriously ill; funeral home staff, who
|already know much about getting insurance and benefits for funerals and
burials; and attorneys specializing in injuries and Social Security/SSI disability
applications and appeals --supplying them with Medicaid COBRA coverage
application forms

Section E: Proactively Identify those Women Under 65 on Medicaid and Other
Health Programs Receiving Treatment for Breast or Cervical Cancer or Precursor
Conditions to Claim New, 15% Higher Medicaid Matching Rate for their Care

"Painless " TOC Medicaid Main Page

“Painless” Administrative Ways For States With Budget Shortfalls to Preserve or
Increase Medicaid and S-CHIP Program Funding
Section D
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