Lisa Coles fixes Pam Atkinson's necklace. The two work at Goochland Cares' clothes closet and will qualify for Medicaid once Virginia expands its program on Jan. 1. (Katie O'Connor/ Virginia Mercury)

In May, when Virginia’s General Assembly passed a budget that includes expanding the state’s Medicaid program, Lisa Coles’ daughter came running into her bedroom, ecstatic.

“She said, ‘Mom, we’re going to get health insurance! It’s coming through!’” Coles, 49, recalled. “I said, ‘Yeah, girl, Jan. 1, we’re going to get it!’ I was so happy.”

Coles and her husband know what it means to live in the Medicaid gap. Their income of about $1,300 per month is too high to qualify for the program, but too low for subsidies to afford an individual market plan.  

It meant skipping trips to the emergency room when she hurt her ankle earlier this year or when he was having chest pains because they feared the bill.

It also meant leaving the hospital early after she had complications related to a miscarriage when she was in her 20s and needed surgery.

“I had to just get myself together and just get up and go because I couldn’t afford to stay in there,” she said.

Coles had followed the debate around expansion that has been raging in Virginia for years, as Republicans long resisted the efforts of former Democratic Gov. Terry McAuliffe to expand Medicaid. She said she was disappointed when the first General Assembly session ended this year without expansion.

“It’s awful, I’ve been feeling like I was lost,” she said. “You have a choice. If you get this health insurance, that means I won’t be able to work, I have to stay at home, and I wouldn’t be able to pay my electric bills, car insurance, I wouldn’t be able to take care of my kids.”

But now, after Democratic Gov. Ralph Northam, a pediatric neurologist, and Republicans in the General Assembly hammered out a deal, she and her family will gain coverage next year.

“Now we pass it around to everybody: ‘Don’t forget, we have to apply for health insurance,’” Coles said.

SIX MONTHS AND COUNTING

The decision to make Virginia the 33rd expansion state immediately launched the Department of Medical Assistance Services, which manages Medicaid in Virginia, onto a six-month trajectory to add an estimated 400,000 people to its roster by the beginning of 2019.

And as the agency works toward Jan. 1, it must also eye other federal and local forces that could influence how expansion plays out and permanently alter how Medicaid operates in Virginia.

To make expansion palatable to some Republicans, the General Assembly included a work requirement for able-bodied adults, but a similar provision was just knocked down by a judge in Kentucky, a decision that could directly affect Virginia’s program.

And before DMAS, as the state agency is known, lies the monumental task of contacting all 400,000 of those living in the Medicaid gap, some who might have no current connection to a government program and others who may be reluctant to apply again if they were rejected in the past.

“It’s an aggressive timeline for us to be ready to go live with coverage on Jan. 1, 2019, but we are working hard and we’re confident we can make it,” said Dr. Jennifer Lee, DMAS’ director.

The agency is pursuing two simultaneous tracks, she said. The first is the one that expands coverage and changes the eligibility criteria so new, low-income adults can enter the program.

The second is setting up the work requirements and cost-sharing provisions that were outlined in the state budget. Like other states, Virginia must submit a waiver application to the federal Centers for Medicare and Medicaid Services to implement the new requirements, essentially requesting to break federal rules on how Medicaid dollars can be spent.

While coverage will certainly start on Jan. 1, the other elements of expansion, including the work requirement, could take much longer to implement.

During a Board of Medical Assistance Services meeting in late June, DMAS Chief Deputy Karen Kimsey said the agency is working to submit a “concept paper” to the federal government in the late summer.

Actually putting the work requirements into practice, though, could take much longer. Lee called it a complicated process that will require close work with the Centers for Medicare and Medicaid Services, so they might not be implemented until later on in 2019, or even 2020.

Until the federal government approves Virginia’s waiver, many questions will go unanswered, like what happens if a beneficiary does not pay premiums, or how work requirements will be fulfilled if a Medicaid member is in the process of applying for disability benefits, which can sometimes take up to three years.

“Our first goal right now is to just get expansion happening: get 400,000 people enrolled and their health care started,” Kimsey told the board.

Right now, DMAS is telling potential new beneficiaries that changes involving workforce training and education are ahead, without going into specifics until all the uncertainties are finalized.

“It’s a little premature to let people know at this point because some of it may change in negotiations with CMS, and also we’ve been told it might scare people from applying,” Kimsey said. “We really want people to get health coverage first and we’re working on that.”

‘OUTREACH IS REALLY CRITICAL’

About 1.2 million adults in Virginia are currently covered under Medicaid, so adding the 400,000 in the expansion population will represent about a 33 percent increase for the state.

Virginia has historically had one of the least generous Medicaid programs in the country. Under the state’s old rules, no childless adults are eligible at all, and a disabled adult cannot make more than $9,700 a year, or 80 percent of the federal poverty level. A family of three could not make more than $6,900 a year, about 33 percent of the federal poverty level.

Expansion represents a massive change in those eligibility rules, as those populations — people with disabilities, families and childless adults — will be able to make up to 138 percent of the federal poverty level after Jan. 1. The new thresholds are $16,754 for an individual and $28,677 for a family of three.

For some, enrolling will be simple. There are roughly 120,000 people already enrolled in some government programs, such as the Governor’s Access Plan, or GAP, for those with serious mental illness, and those who have a partial benefit through the state’s family planning waiver. The state should be able to simply shift them into full Medicaid coverage.

And DMAS can fairly easily contact those enrolled in the Supplemental Nutrition Assistance Program, or SNAP, said Jill Hanken, health care attorney with the Virginia Poverty Law Center. SNAP helps families to afford food, and was formerly called food stamps.

“Identifying those populations and figuring out administratively how they can be most easily transferred to new eligibility makes sense for the individual because they will get more comprehensive and affordable health insurance, or health insurance for the first time, and it also makes sense for Virginia because the enhanced federal funding only starts to flow once people are enrolled in the program,” Hanken said.

“Good messaging and advertising and outreach is really critical to this.”

Kimsey, the agency’s chief deputy, said DMAS has convened focus groups on the newly eligible population and found that, while most express a desire to enroll in Medicaid, many are unaware that Virginia is due to expand the program. And fear of getting rejected a second time might keep some from applying at all.

“So it’s going to be really important how we reach out to them, and how we message them,” she said.

Some examples, she added, include bus signage or advertising in stores like Walmart. The coverva.org website will allow people to sign up for regular updates on when they can apply.

About 100,000 people enrolled in individual health insurance marketplace plans who will now be eligible for Medicaid will also require outreach.

“Nov. 1 to Dec. 15 is marketplace enrollment, and the marketplace will know that Virginia now has different Medicaid eligibility rules and will decline folks who reapply,” Hanken said. “But there are lots of intricacies about people who are already in a marketplace plan who will just renew, and we don’t want people to get multiple letters from multiple sources and get confused.”

WHAT ABOUT THAT WORK REQUIREMENT?

In the state budget, the work requirement is called the “Training, Education, Employment and Opportunity Program,” meant “for every able-bodied, working-age adult enrolled in the Medicaid program to enable enrollees to increase their health and well-being through community engagement leading to self-sufficiency.”

Medicaid beneficiaries can satisfy the requirement in multiple ways other than working, such as through job-skills training or enrolling in an education program.

Most current Medicaid recipients will likely be exempt from the requirements because they are children, pregnant women, elderly or disabled, according to a February Joint Legislative Audit and Review Commission report.

“JLARC estimates that approximately 32 percent of the Medicaid expansion population would be subject to the requirements and 7 percent would be deterred from enrolling or leaving the Medicaid program due to the requirements,” the report states.

The budget language also includes new premiums and cost-sharing provisions for people between 100 and 138 percent of the federal poverty level. According to the budget, the monthly premium will be set per enrollee on a sliding scale, not to exceed 2 percent of monthly income.

“We have had concerns all along about any of these provisions that are a condition of eligibility, meaning that people have to comply or they can lose their health coverage,” said Hanken, the health care attorney with the Virginia Poverty Law Center. “Most Medicaid enrollees who can work are already working, so the state’s going to stand up a brand new program for a small slice of the population and we are concerned about new red tape and bureaucracy that may interfere with people’s access to the health care that they need.”

According to the Kaiser Family Foundation, 60 percent of non-disabled adults enrolled in Medicaid are working, and 80 percent are in families with at least one worker, suggesting some may not work due to full-time caregiving responsibilities.

Under the expansion language, enrollees will be ineligible for Medicaid benefits if they fail to meet the requirements for any three months of the year after their enrollment and won’t be permitted to re-enroll until the end of that year.

Though there will be a grace period, if they fail to pay their premiums they will similarly have to wait until the end of the year to re-enroll. The budget does not specify how long such a grace period will last.

“There are questions about the actual exemptions and how we will apply this and when,” said Lee, the DMAS director. “At this point in time we really are focused on getting those people covered who are uninsured and getting people health care, so that’s our priority and our focus.”

Developing the waiver will require close work with the Centers for Medicare and Medicaid Services, Lee said, adding that the agency is talking with officials in Kentucky to learn from their experiences.

The federal agency confirmed last week it would reconsider Kentucky’s waiver application.  Other states, like Indiana and New Hampshire, are still setting up their own work requirements, while Arkansas has already implemented its program.

While Virginia’s work requirement could also be challenged, DMAS will be working closely with the federal government as it designs its waiver, potentially allowing it to adjust its program to withstand similar legal challenges.

The Division of Legislative Services created a report that outlines the Kentucky ruling and notes how it might affect Virginia, concluding that Virginia’s program may still be approved if U.S. Health and Human Services Secretary Alex Azar determines that its main objective is ensuring eligible recipients have access to health care.

‘IF YOU BUILD IT, THEY WILL COME’

During the debate over whether or not Virginia should expand the program, some lawmakers expressed concerns about access to care and whether there are a sufficient number of providers for the expanded Medicaid population.

Staff at DMAS are working with the six managed-care organizations, or MCOs, to ensure there are enough providers. MCOs are health plans like Anthem and Aetna that create the network of doctors and other providers that serve Medicaid patients.

There continues to be a provider shortage across the country, particularly in rural areas. Virginia has 110 “health professional shortage areas,” which are designations that identify areas with a shortage of primary, mental health and dental providers. To have such a designation, an area must have population-to-provider ratio of at least 3,500 to 1.

Kimsey, the DMAS chief deputy, noted that during the most recent General Assembly session, Virginia allowed nurse practitioners to practice independently without a supervising physician, which might help with the shortage.

The state’s six managed care organizations, or MCOs, already have networks up and running across the state, said Doug Gray, executive director of the Virginia Association of Health Plans.

Having paying customers to replace the previously uninsured populations will make the biggest difference in ensuring an adequate provider network, he said.

“There may be a little period of adjustment, which is normal when you’re adding a significant population, particularly in areas where they aren’t used to having that many people who are insured,” he said.

He noted that last year the state started its Addiction and Recovery Treatment Services benefit for those dealing with addiction. Prior to its launch, there was a major shortage of substance-use disorder providers because there weren’t enough funds.

“Now, they have an enhanced benefit that includes more of the services they need, so it can be comprehensive and we’ve seen a big growth in the provider network,” Gray said. “The same applies here. It’s the, ‘If you build it, they will come,’ idea.”

Lee said that in the coming years, the state will also be looking at reimbursement rates for doctors. Most physicians will only accept a certain number of Medicaid patients and won’t depend on it for all of their revenue, Gray said, as private payers usually have higher reimbursement rates.

“I know Gov. Northam supports us looking at reimbursement rates to make sure they are fair and that providers are incentivized to see Medicaid patients,” Lee said. “It’s definitely something we’ll be looking at.”

FINDING INDEPENDENCE

Both Coles and her coworker Pam Atkinson, 61, will qualify for Medicaid next year under the new eligibility rules.

They are both able to get health care now through their jobs at the clothes closet at Goochland Cares, a free clinic and family services organization in Goochland County.

Goochland Cares offers insurance to its employees, but Atkinson is technically an employee for Senior Connections, a nonprofit organization that helps older adults throughout the Richmond region, so she doesn’t qualify.

And Coles said she can’t afford to pay a monthly premium, even one as low as $50 per month.

Atkinson relies on Goochland Cares to get her medications so she can keep her diabetes, anxiety and post-traumatic stress disorder under control. She wouldn’t be able to afford it without the clinic — one diabetes prescription costs around $70, she said.

For Coles, the clinic has helped her get her health on track. She takes medication to keep her blood pressure under control and tries to exercise regularly.

But she’s still eager to get her own insurance and said she can’t wait to sign up. Beyond giving her some choice in what doctor she goes to, it means she won’t have to worry about an emergency medical bill derailing her life.

“I’m not going to have to worry about fighting the hospital bills,” she said. “It just makes you feel like you’re independent.”