SUBJECT:
AFFORDABLE INSURANCE STANDARDS CHANGE
DISCUSSION:
Effective July 1, 2006, the affordable insurance standard will change per state regulation 13 CSR 70-4.080. An amendment to the regulation filed June 15, 2006, establishes three affordability standards for families with income above 150% and below 300% of the FPL. Previously, there was one affordability standard for all CHIP families subject to the affordability test. This amount is based on 133% of the average premium required for the Missouri Consolidated health care plan, which is set by RsMO 208.640; it is changing July 1, 2006, from $342 to $375.
Families with income between 150% and 300% of the FPL with access to insurance must meet the following affordability guidelines:
- 151%-185% of the FPL = $209/month
- 186%-225% of the FPL = $255/month
- 226%-300% of the FPL = $375/month
If insurance available for the children is below these levels, the child(ren) would not be eligible for the MC+ program due to access to affordable health insurance.
For pending applications/case actions, utilize the new affordability standards to determine July 2006 eligibility. If a family is eligible based on the new guidelines, void any outstanding adverse actions and notify the family of continued eligibility.
Notification
A notice 
is being sent to applicants/recipients who were rejected or closed, based on access to affordable insurance under the old affordability standard, from September 1, 2005 through the present. The notice advises these families of the change in the affordability standards, provides an income and affordability standards chart, and instructs them to contact the local Family Support Division office if they would like to reapply for MC+ under the new affordability standards.
Legal Basis
Prior to Senate Bill 539, the affordability test only applied to families with income above 225% of the FPL. Senate Bill 539 changed the rule to apply the affordability test to families with income above 150% of the FPL. The $375 standard equals 9% of income for a family of 3 at 300% of the FPL, but represents from 12% to 18% of the income of a family of 3 with income from 151% to 225% FPL. The state regulation applies the 9% of income factor to the median income level for a family of 3 with income from 151%-185% of the FPL and 186%-225% of the FPL to establish the affordability standard for families in those income ranges. Application of the 9% factor to the median income level establishes a proportional and more equitable affordability test for families with income between 150%-225% of the FPL.
NECESSARY ACTION:
- Review this memorandum with appropriate staff.
- Apply the new affordability standards effective July 1, 2006
- Take and process applications/reapplications as requested based on new affordability standards.