All Medicaid Programs |
Obsolete Policy |
End Date: July 31, 2014
No Previous Policy
What is the Buy-Out?
The Buy-Out is a Federal law which allows the State to purchase group health insurance for an individual who is eligible for Medicaid when it is cost effective for the State. This process will be done in cooperation with Medicaid eligibility workers and the Division of Health Care Financing.
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.
In some instances, group health insurance through an employer may be purchased by an individual 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.
Coverage for children (up to age 26) who have recently been removed from their parent's insurance may be able to continue under the COBRA coverage. If major medical expenses are expected (for instance, pregnancy expenses), it may be cost effective for the State to pay the premiums to cover the child.
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 client expects any major medical expenses, there is a potential BUYOUT opportunity when the client:
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 client has not enrolled.
Refer the information about a potential BUY-OUT by sending a FAX of the Form 19 and a copy of both sides of the client's health insurance card (if applicable) to the BUY OUT unit at the Division of Health Care Financing (HCF). If you have questions, or are concerned about a short COBRA deadline, you may call the BUYOUT staff. See Table IX for phone numbers.
The HCF BUY-OUT unit will research the possibility of doing a BUYOUT, and determine if it is cost effective. If HCF buys the insurance, they will send a letter to the client and a copy to the eligibility worker informing them of this action. No notice will be sent unless the Health Dept. decides to buy the insurance. HCF will process the premium payments.
Eligibility workers must allow a deduction 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 BUY-OUT opportunity, eligibility workers should explain to clients that the state will contact them ONLY IF the state decides to pay the health insurance premium. If a client wants to assure coverage under an employer's health plan or a COBRA option, the client should take the necessary steps to enroll in the insurance including paying any premiums that are due. The client should not wait to see if the state will pay the premium.
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.
Responsibilities of the Division of Health Care Financing
DHCF will process the referrals for BUYOUT and make the decision on cost effectiveness. DHCF will notify clients and workers of participation in BUYOUT. DHCF will process the payments to employers or other group health insurance companies for clients when it was determined cost effective.