IM-83      08/02/05

SUBJECT:

CHANGES TO MC+ CHILDREN'S HEALTH INSURANCE PROGRAM (CHIP)
FAMILY HEALTHCARE MANUAL REVISION #22: SECTIONS 0920.005.00, 0920.020.00, 0920.020.10, 0920.020.10.15, 0920.020.15, 0920.020.20, 0920.020.30, 0920.020.30.05, 0920.030.05, 0920.040.00, 0920.045.00, & Appendix E (Section 0900.000.00)

DISCUSSION:

Missouri Senate Bill 539 (2005) lowered the income limit for children to receive MC+ for Kids healthcare coverage without paying a premium. Effective September 1, 2005, all families with gross income above 150% of the federal poverty level (FPL) must pay a monthly premium to receive MC+ for Kids healthcare coverage (CHIP). Families will no longer be responsible for prescription and office visit co-payments.

All families with income above 150% of the FPL are subject to the same MC+ CHIP eligibility requirements. These include:

• no access to affordable health insurance (employer and private);
• payment of premium before coverage begins;
• a 30-day waiting period from the date of application before coverage may begin; and
• a six-month penalty for non-payment of an on-going premium.

Senate Bill 539 retained the maximum premium level at not more than 5% of the family's income. House Bill 11 (2005) limited premiums for families with income not exceeding 185% of the FPL to 1% of the family's income and 3% of the family's income for families above 185% of the FPL up to and including 225% of the FPL. The Division of Medical Services (DMS) set one premium for each size family in each income range. (See attached MC+ Premium Chart - IM-4PRM )

Families with income that does not exceed 225% of the FPL who applied prior to September 1, 2005 will receive a 30-day transitional period before the premium begins. For MC+ for Kids cases active August 31, 2005, the transitional period is through September 30, 2005. For pending applications, the transition period begins with the date of approval and continues for 30 days.

LEVELS OF CARE:

CHIP children will continue to be divided into three levels of care (LOC) with the following income levels:

• LOC 1 (No Cost): Net income above the non-CHIP maximum and gross income up to and including 150% of the FPL.

• LOC 2 (Reduced Premium Group): Gross income above 150% through 225% of the FPL. DMS will determine if the child is subject to the 1% or 3% premium based on the gross income and the family size in IMU5.

• LOC 3 (Full Premium Group): Gross income between 226% and 300% of the FPL.

LOC 2 children will not have coverage after August 31, 2005 unless there is a lock-in on the MCII screen.

CHANGE IN PREMIUMS FOR LOC 3 CHILDREN:

Families with gross income between 226% and 300% of the FPL will continue to pay premiums not exceeding 5% of their income, up to the maximum of $257 per month. Prior to September 1, 2005, premium payments were reduced by $25.00 to prevent co-payments from causing total cost-sharing to exceed the 5% of income limit. Beginning September 1, 2005, the $25.00 reduction is eliminated as families are no longer responsible for prescription and office visit co-payments.

DMS has restructured the premium schedule for LOC 3 (see attached MC+ Premium Chart - IM-4PRM). This adjustment will result in the premium amount for some families to decrease and others to increase. DMS is notifying families of children active on LOC 3 of the change in premiums.

ACTIONS TO BE TAKEN ON ACTIVE CASES:

On August 5, 2005, advance notices of the change (copy attached below) are being mailed to all MC+ for Kids CHIP cases with gross income from 151% through 225% of the FPL that were active July 29, 2005. The notice informs the families of the change in the income limit for non-premium CHIP coverage and that their income is above the new limit. Families will be informed of the premium amount, the billing and procedure (invoice system), and the date the first premium payment must be received in order to have MC+ for Kids healthcare coverage for their child(ren) on October 1, 2005.

County offices will receive a report of all cases notified of the change.

On August 27, 2005, all active LOC 1 children on MC+ for Kids cases with gross income above 150% of the FPL will be changed to LOC 2 (Reduced Premium group). Final Notice of Case Action letters are being mailed on August 31, 2005 to all families with gross income from 151% through 225% of the FPL (LOC 2), informing them of the premium payment requirements. DMS will place all LOC 2 children active on August 31, 2005 in a transition lock-in period of September 1 through September 30, 2005.

Active cases converted to the premium groups should have access to affordable health insurance explored at the next reinvestigation or other contact with the family.

HEARING PROCEDURES:

Families have a right to appeal the child(ren)'s change in eligibility. The advance notice gives them until August 15, 2005 to request a hearing. The caseworker must screen hearing requests to determine if the change in state law is the sole reason for the request. However, the Hearing Unit will make the final decision on this issue. The Advance Notice informs the recipient of the date and time a hearing will be held, if requested. The hearings are scheduled for August 16 through August 30, 2005. This allows the Hearing Unit to render a decision prior to September 1, 2005.

If a hearing is requested by August 15, 2005, staff must determine if the request is due to the change in state law or for another reason. For example, if the recipient agrees with the income and household composition used to determine their eligibility; this indicates they are only in disagreement with the change in state law. If the recipient disagrees with how gross income was calculated, the reason for the hearing is for something other than the change in state law. Staff must clearly indicate on the Application for State Hearing (IM-87) form whether the reason for the hearing is the change in state law or something else. The IM-87 must be faxed and the original mailed to the Hearing Unit on the date the request is made to ensure that hearings on these cases are held as soon as possible.

If the reason for the hearing request is for a reason other than the change in state law, benefits must continue as non-premium (LOC 1) pending the outcome of the hearing. Follow normal hearing procedures for these requests. Advise the claimant to disregard the hearing date shown on the advance notice because they will be notified by the Hearing Unit of a new hearing date. To prevent the system from adjusting the case from a non-premium group to a premium group, update the IMU5 to show gross income that does not exceed 150% of the FPL.

If the reason for the hearing request is solely due to the change in state law, no action is required in IMU5.

ACTION ON MC+ KIDS (CHIP) CASES AFTER AUGUST 1, 2005 BUT PRIOR TO AUGUST 27, 2005:

Until the conversion takes place, staff should continue to process MC+ for Kids cases based on April 1, 2005 gross income limits for each level of care. However, for new approvals and budget adjustments completed from August 1 to August 26, 2005, staff must determine if the family's gross income exceeds 150% of the FPL. If it does, the worker must notify the families of LOC 1 and 2 children that they are required to pay a premium to continue to receive MC+ for Kids after September 30, 2005. The worker must mail the family the attached Notification of Change and the MC+ for Kids Premiums table (IM-4PRM ). DMS will send an invoice to those families on September 2, 2005.

Note: Enter the LOC used prior to the Premium Group income level changes when entering the Level of Care (LOC) in field 13G on IMU5 for case approvals and budget adjustments prior to August 28, 2005.

Example:

• Mr. Smith applies for MC+ for his 2 children on July 29, 2005. His gross income is $2,300.00. Mr. Smith is approved for MC+ for Kids, CHIP 1 on August 15, 2005. His gross income is over 150% of the FPL. Enter LOC 1 in Field 13G of IMU5 for each child.
  
  Send Mr. Smith the IM-32MC, the IM-4(PRM) and the Notification of Change, writing in his gross income of $2,300.00, his family size of 3, and his Premium amount of $20.00. Mr. Smith does not owe a premium for coverage for the months of August and September, 2005. On August 28, 2005, conversion takes place. IMU5 Field 13 G LOC 1 will change to LOC 2 in the mass adjustment. DMS will send an invoice to Mr. Smith on September 2, 2005.
  
  Mr. Smith's premium payment is received October 3, 2005. Mr. Smith's children will not have MC+ for Kids healthcare coverage from October 1 through October 2, 2005 as the Premium Payment was not received until October 3.

ACTION ON MC+ KIDS (CHIP) CASES PROCESSED AFTER AUGUST 28, 2005:

ACTIVE CASES

For budget adjustments on active MC+ for Kids cases from August 29, 2005 on, where the new income exceeds 150% of the FPL, follow current policy in the Family Healthcare Manual Section 0920.040.00 Interim Changes, from Non-Premium to Premium.

APPROVALS OF APPLICATIONS TAKEN PRIOR TO SEPTEMBER 1, 2005

New approvals on MC+ for Kids applications made prior to September 1, 2005 where the income exceeds 150% but not 225% of the FPL (the new LOC 2), are entitled to a 30-day transitional period before being subject to a premium. For new approvals for LOC 2 where the application date is prior to September 1, 2005, DMS will create a transitional lock-in period starting September 1, 2005 to continue through the thirtieth day after the date of approval.

Send these new approvals the attached MC+ for Kids Transition Approval Notice . Enter the date of application, the family size of the assistance group, and the gross income amount in the appropriate fields on the notice. In the following paragraph, note the start date of the eligibility period and the end date of non-premium coverage. The end date of non-premium coverage is 30 days from the date the case is approved (date of approval plus 30 days). The coverage date in the next paragraph will be the end date plus one.

Example:

• Mrs. Jones applies for MC+ for Kids for her 3 children on August 15, 2005. Her gross income is $3,000.00. Mrs. Jones is approved for MC+ for Kids, CHIP 2 on September 14, 2005. As Mrs. Jones applied prior to the date of effective change (September 1, 2005) of the premium requirements, send her the MC+ for Kids Transition Approval Notice and the IM-4(PRM). Fill in the Approval Notice as noted below:
  
  Based on your family size of 04 and monthly income of $3,000.00:
  
  
  • The child(ren) listed below are approved for MC+ healthcare coverage from August 15, 2005 through October 14, 2005. No premium payment is required for this period.
  
  
  • You must pay a premium for the child(ren) listed below to have coverage after October 14, 2005.
  
  Mrs. Jones does not owe a premium for August 15, 2005 through October 14, 2005 (date of approval + 30 days) for LOC 2. DMS mails an invoice to Mrs. Jones on the day after the approval is entered in IMU5. Access the MPNI screen to view the invoice and premium information.
  
  Mrs. Jones must send her payment to the Premium Collections Unit to have coverage for her children after October 14, 2005. If the payment is received prior to October 13, 2005, Mrs. Jones' children will have continuous MC+ for Kids healthcare coverage. If the premium is not received until after October 15, 2005, the children will not be covered from October 15 through the date the premium is received.

APPLICATIONS TAKEN AFTER SEPTEMBER 1, 2005

MC+ for Kids applications taken after September 1, 2005 are subject to the new CHIP requirements immediately. Assign each child the appropriate level of care based on the family's gross income. TXIX start dates are based on the new policy for No-Cost and Premium groups, as follows:

• LOC 1 - Start date in IMU5 for eligibility is date of application or date first eligible, whichever is the later. Coverage begins this date.

• LOC 2 and LOC 3 (Reduced and Full Premium Groups) - Start date for eligibility is 30 days from date of application or date first eligible, whichever is later. Coverage begins when premium payment is received or eligibility begins, whichever is later.

IBCA will be updated soon to reflect the new MC+ for Kids CHIP groups, effective with September 2005 budgets.

NECESSARY ACTION:

• Review this memorandum with appropriate staff.

• Send the Notification of Change to all families of children approved or adjusted to level of care 1 or 2 with income above 150% of the FPL from August 1 through August 26, 2005.

• Beginning August 29, 2005, use the MC+ for Kids Transition Approval Notice as the approval letter for any MC+ for Kids case with income above 150% through 225% of the FPL (new LOC 2) eligible for coverage prior to September 1, 2005.

LH

ATTACHMENTS:

Advance Notice of Case Action - No Cost to Premium MC+ for Kids
Notice of Case Action - No Cost to Premium MC+ for Kids
Notification of Change - No Cost to Premium MC+ for Kids
IM-4(PRM) - Effective September 1, 2005
MC+ for Kids Transition Approval Notice