National Activity

House Passes AHCA, Senate Begins Drafting New ACA Replacement Legislation

The House passed the AHCA after a last-minute amendment providing $8 billion intended to reduce out-of-pocket costs for patients with pre-existing conditions generated sufficient support from Republican moderates. The AHCA would phase out enhanced funding for Medicaid expansion and establish a per capita cap on Medicaid with a state option for a block grant. The Senate, however, has indicated it will craft its own bill. The CBO score of the AHCA, as passed by the House, estimates that federal Medicaid spending would be cut by $834 billion by 2026 and there would be 14 million fewer Medicaid enrollees by 2026, a 17% reduction compared to current law.

Bipartisan Group of Governors Will Lobby Congress on ACA Replacement

A bipartisan group of governors led by John Kasich (R-OH) and John Hickenlooper (D-CO) are working to develop a consensus ACA replacement proposal to present to Congress that would give states the option of maintaining enhanced federal funding for the Medicaid expansion population. The group reportedly includes governors from Arizona, Michigan, Nevada, Utah, and Tennessee.

State News

Arkansas: Governor and Legislature Approve Plans to Amend Medicaid Expansion Waiver

Governor Asa Hutchinson (R) signed a bill authorizing proposed changes to the State's Medicaid expansion waiver, including lowering eligibility for expansion adults from 138% of FPL to 100% of FPL, and instituting work requirements. The Arkansas Department of Human Services (DHS) estimates that 60,000 of the 320,000 adults enrolled in the State's expansion waiver would lose Medicaid eligibility due to the income eligibility reduction, saving the State between $66 million and $93 million from FY 2018 to FY 2026. The Governor said DHS would work with insurers to facilitate a "smooth transition" for these enrollees from Medicaid to Marketplace coverage or employer-sponsored insurance. The State plans to submit the waiver amendment for CMS review in June with the new requirements going into effect as early as January 1, 2018.

Indiana: Work Requirements Added to Medicaid Expansion Waiver Application

The State released for public comment an amendment to its Medicaid expansion waiver extension application that would require all able-bodied beneficiaries to work at least 20 hours per week, be enrolled in full- or part-time education, or participate in a job search and training program. Pregnant women, medically frail individuals, primary caregivers of a dependent, enrollees being treated for a substance use disorder, and enrollees over age 60 would be exempt from the work requirement. The original waiver extension application was submitted to CMS in February and is pending approval; the amendment is open for public comment until June 23. Indiana's Medicaid expansion was developed by current CMS Administrator Seema Verma and Center for Medicaid and CHIP Services director Brian Neale.

Indiana: Expansion Evaluation Finds Many Lost Coverage Due to HSA Requirements

An independent evaluation conducted by the Lewin Group found that nearly 55% of individuals eligible for the State's Medicaid expansion did not make required contributions to their POWER account, a health savings-like account; as a result, 286,914 people earning below 100% of FPL were enrolled in a more limited benefit plan, and 59,696 people earning above 100% of FPL were either disenrolled or not enrolled at all. As of November 2016, 11% of those that were disenrolled and 53% of those that were never enrolled had either reenrolled in expansion (after a mandatory 6-month disenrollment period) or in another Medicaid category. The study also looked at access to care for those who fail to make POWER account contributions and reasons for nonpayment, which include not knowing a payment was required or confusion about the payment process. The evaluation, which is required by the waiver, reviews data from the February 2015 program launch to December 2016; a final evaluation will be submitted to CMS in 2018. Supporters of the waiver, which was designed by now CMS Administrator Seema Verma, cite it as a model for other states, though other analyses have challenged the model's successes.

Iowa: Few Medicaid Expansion Enrollees Completed Wellness Exam and Health Risk Assessment

Less than 20% of Medicaid expansion enrollees completed the wellness exam and health risk assessment required under the State's Medicaid expansion waiver to avoid premium penalties of $5 and $10, according to a study published in Health Affairs. Non-white, younger enrollees residing in rural areas completed these "healthy behavior" activities at lower rates than other enrollees. Researchers also found that despite State outreach and education efforts, most providers were unaware of the program and, as a result, failed to educate and encourage members to complete the wellness exam and health risk assessment.

Ohio: Proposed House Budget Would Impose Work Requirements

The House passed a preliminary budget today requiring the Department of Medicaid to seek semi-annual approval from a legislative oversight board to spend State Medicaid expansion dollars, and to submit a federal waiver requesting approval to mandate work requirements for Medicaid expansion recipients, excepting those over 55, in school or a job training program, in a substance abuse treatment program, or considered medically fragile. The bill will now move to the Senate for consideration; per State law, the budget must be returned to Governor Kasich (R) by June 30.

National Reports and Analysis

New Health Affairs Issue Reviews Impact of Medicaid Expansion

The May 2017 issue of Health Affairs features several studies on how Medicaid expansion improved access to care for the uninsured, while preserving access to services for individuals who maintained pre-ACA insurance. Among other findings, the studies report that Medicaid expansion reduced uninsurance rates without crowding out private insurance, though wait times for healthcare appointments remained slightly higher for Medicaid patients than privately insured individuals.

Hospitals Experienced Greater Decreases in Uncompensated Care in Expansion States

Uncompensated care costs as a percentage of hospital operating budgets decreased 1.6 percentage points in expansion states between 2013 and 2015 (from 3.9% to 2.3%) but decreased only 0.3 to 0.4 percentage points in non-expansion states over the same period, according to a new brief published by The Commonwealth Fund. The authors estimate that uncompensated care savings across all hospitals in the 31 expansion states and the District of Columbia totaled $6.2 billion, noting that the AHCA's proposal to phase out Medicaid expansion funding would likely result in large cost increases to safety-net hospitals.

Expanding Medicaid in 19 Additional States Would Improve Coverage and Reduce Uncompensated Care

Expanding Medicaid in the 19 remaining non-expansion states would reduce the number of uninsured by between 4.3 million and 5.2 million adults, decrease consumer out-of-pocket spending by between $84.1 billion and $90.7 billion, reduce uncompensated care costs by between $22.5 billion to $27.9 billion, and draw down between $7.14 and $7.15 in net federal spending for each state dollar spent on expansion between 2018 and 2027, according to an Urban Institute report. The report, which analyzes the potential impact of expansion on a state-by-state basis, finds that Mississippi and Tennessee would draw down the largest amount of net federal spending for each state dollar spent on expansion ($12.09 and $9.43 respectively). The current version of the AHCA would phase out enhanced federal funding in states with existing expansions and preclude the remaining 19 states from adopting expansion in the future.