Effective Date: August 1, 2014

Previous Policy

A. What is the Buyout?

The Buyout is a federal law that allows the State to purchase group health insurance for an individual who is eligible for Medicaid when it is cost effective for the State. The cost effectiveness is based on whether the individual has major medical expenses, such as a pregnancy or a long term illness. The Buyout will be done in cooperation with Medicaid eligibility workers. The Division of Integrated Healthcare, Buyout Unit processes the Buyout.

Currently employed applicants or recipients who are not participating in their employer-sponsored group health insurance may be required to enroll, with Medicaid paying the premium for this insurance, as one of the Medicaid covered benefits. Children (up to age 26) may be eligible for Buyout on their parent's insurance.

In some instances, an individual may purchase a group health insurance through an employer within the first 60 days after termination of employment. This is referred to as COBRA coverage. It will frequently be in the State's best interest to purchase COBRA insurance coverage if an individual has a major medical problem and has just terminated employment.

B. Responsibilities of the Eligibility Worker

Complete the TPL questions on the application or Form 19 with the applicant. Go over the specific questions which relate to a potential Buyout option with each applicant and recipient. If the member expects any major medical expenses, there is a potential Buyout opportunity when the member:

is currently enrolled in health insurance, OR

has had health insurance coverage in the past sixty days, OR

is employed and the employer has insurance for employees but the member has not enrolled.

Refer the information about a potential Buyout by sending a FAX of the Form 19 and a copy of both sides of the member's health insurance card (if applicable) to the Buyout unit at the Division of Integrated Healthcare (DIH). If you have questions, or are concerned about a short COBRA deadline, you may call the Buyout staff. See Table IX for phone numbers.

Do not refer the following for Buyout, as they are not cost effective for DIH to purchase:

A "Medigap" insurance policy for any Medicare recipient.

Nursing home residents with health insurance.

Eligibility workers must allow a deduction from income on spenddown cases for the amount of the health insurance payment if the coverage is purchased. The fact that the State makes the payment has no bearing on whether the deduction can be allowed as a health insurance expense.

Eligibility workers will initiate any sanctions for non-cooperation as informed to do so by ORS. See Section 225-5 .

If there is a potential Buyout opportunity, eligibility workers should explain to members that the state will contact them ONLY IF the state decides to pay the health insurance premium. If a member wants to assure coverage under an employer's health plan or a COBRA option, the member should take the necessary steps to enroll in the insurance including paying any premiums that are due. The member should not wait to see if the state will pay the premium.

C. Responsibilities of the Division of Integrated Healthcare Buyout Unit

The DIH Buyout unit will research the possibility of doing a Buyout, and determine if it is cost effective. If DIH buys the insurance, they will send a letter to the member and a copy to the eligibility worker informing them of this action. No notice will be sent unless the DIH decides to buy the insurance.

DIH will process the premium payments. DIH will process the referrals for Buyout and make the decision on cost effectiveness. DIH will notify members and workers of participation in Buyout. DIH will process the payments to employers or other group health insurance companies for members when it was determined cost effective.

D. Responsibilities of the Office of Recovery Services

ORS will coordinate sanctions for individuals who refuse to enroll in the group health insurance when it was determined cost effective for the State. If a sanction is to be imposed, ORS will notify the eligibility worker to apply the sanction.