HealthCare.gov consumers begin previewing 2017 coverage options as HHS projects a 9% enrollment increase over last year and an average 22% benchmark premium increase; Oregon study finds increased primary care spending in patient-centered program associated with lower overall healthcare expenditures; and New York requests a waiver amendment to support transitional care for incarcerated individuals.

FEDERAL AND STATE MARKETPLACE NEWS:

ASPE Details 2017 Marketplace Plan Premiums and Availability

Benchmark premiums in 2017 will increase on average 22% for all states with available data and 25% for HealthCare.gov states, according to HHS’s Assistant Secretary for Planning and Evaluation (ASPE). The report’s authors note that 77% of current Marketplace enrollees will be able to purchase a plan with monthly premiums of $100 or less after tax credits and that just over one-fifth of HealthCare.gov consumers that did not receive tax credits in 2016 may be eligible for tax credits in 2017. ASPE notes that several of the states experiencing large rate increases in 2017 had 2016 premiums “well below” the national average and “especially far below” premiums for comparable employer plans (this includes Arizona, Hawaii, Illinois, Kansas, and Pennsylvania). Additionally, the report highlights that Marketplace consumers will have on average 30 plans from which to choose, and that 79% of returning Marketplace enrollees will have at least two issuers from which to choose.

HHS Projects 13.8 Million Plan Selections During 2017 Open Enrollment

An estimated 13.8 million individuals are expected to select a Marketplace plan during 2017 open enrollment, a 9% increase over 2016, according to HHS’s Assistant Secretary for Planning and Evaluation (ASPE). Two-thirds of those making 2017 plan selections are expected to be re-enrollees from 2016 Marketplace coverage (9.2 million individuals), a quarter are currently uninsured (3.5 million individuals), and the remaining 1.1 million are currently enrolled in off-Marketplace individual coverage. The ASPE report also reviews demographic characteristics of what it calls the “addressable market,” nonelderly individuals who are uninsured or have off-Marketplace individual coverage and have household incomes that qualify them for Marketplace coverage. Of the uninsured “addressable market,” 84% have family incomes that would qualify them for Marketplace subsidies. The 2017 open enrollment period runs from November 1, 2016 to January 31, 2017.

HealthCare.gov Consumers Can Access Detailed 2017 Plan Data and Preview Options

CMS has published detailed information on all 2017 plans that will be offered in the 39 states that will use the HealthCare.gov platform, including premiums for various ages and household compositions, medical and drug deductibles and out-of-pocket maximums, and various co-payment or co-insurance levels for different provider types. Consumers can now also log on to HealthCare.gov to preview qualified health plans and obtain “personalized price estimates” based on household income and geographic data. The 2017 open enrollment period runs from November 1, 2016 to January 31, 2017.

Illinois: 2017 Marketplace Premium Rate Increases Finalized

Premium rates for Get Covered Illinois (the State-based Marketplace) will increase on average by 45% for the lowest cost silver plans and by 44% for the lowest cost bronze plans in 2017, according to an analysis published by the Department of Insurance. The number of carriers per county will range from one to three for individual plans, and the number of plans will range from 10 to 39, with the exception of Cook County, which will offer more than 40 plans. Five carriers will offer individual coverage for 2017, down from nine in 2016, and two carriers will offer SHOP plans. More than 300,000 residents purchased Marketplace coverage in 2016.

Michigan: 2017 Premium Rates Will Increase 17% on Average

The Department of Insurance and Financial Services approved 2017 premium rate increases for the individual market, averaging 16.7% and ranging from 3.2% to 39.2%. Fourteen insurance carriers will offer insurance on the individual market with 10 of those carriers offering coverage on the Marketplace. Four carriers that offered plans on the individual Marketplace in 2016 withdrew for 2017. The Department also announced premium rate changes in the small group market, averaging a 2.5% increase and ranging from a 5.6% decrease to a 15% increase. Nineteen insurance carriers will offer insurance for the small group market with only three of those carriers offering coverage on the Marketplace.

Pennsylvania: 2017 Premium Rates Will Increase 33% on Average

The Insurance Department announced premium rate increases for the individual market, averaging 32.5% and ranging from 9.3% to 55%. Eighteen insurance carriers will offer insurance on the individual market with 10 of those carriers offering coverage on the Marketplace. The Department also announced premium rate changes in the small group market, averaging a 7.1% increase and ranging from a 6% decrease to a 14% increase. Twenty insurance carriers will offer insurance on the small group market with six of those carriers offering coverage on the Marketplace.

STATE MEDICAID REFORM ACTIVITY:

Illinois: Behavioral Health-Focused Waiver Filed With CMS

The Department of Healthcare Family Services (DHFS) submitted an 1115 waiver proposal to CMS, requesting $2.7 billion over five years to address several behavioral health-related goals, including integrating behavioral and physical health, reducing overreliance on institutional care by shifting to community-based care, and moving behavioral health providers towards outcomes- and value-based payments. Initiatives in the proposal include infant and early childhood mental health interventions and efforts to strengthen the workforce. New proposed benefits include housing and employment services and transition services for recently incarcerated individuals. Changes could be implemented as early as July 2017, according to DHFS Director Felicia Norwood.

New York: State Requests Medicaid Waiver Amendment to Support Transitional Care for Incarcerated Individuals

The Department of Health has requested an amendment to New York's “Partnership Plan” 1115 waiver seeking federal Medicaid matching funds to provide care management and other supportive services to Health Home-eligible incarcerated individuals in the 30 days prior to their release. Under the amendment, eligible individuals would receive care management, clinical consultation services, and coverage of certain medications, including those treating behavioral health and substance use disorders. These changes aim to enable continuity of care and an easier transition to community-based services and Health Home enrollment upon release. New York estimates that more than half of all individuals discharged from prison or jail annually are Health Home-eligible, and expects the expanded coverage to reduce recidivism and lower healthcare costs. The State's request, which will be open for federal public comment from October 21 through November 20, complements a number of other recent State initiatives supporting re-entry, including the suspension of Medicaid benefits upon incarceration, instead of termination.

Oklahoma: State Requests Two Year Extension of SoonerCare Waiver With Minimal Changes

The Oklahoma Health Care Authority requested a two-year extension of its SoonerCare 1115 waiver, which authorizes an employer-sponsored insurance premium assistance program as well as a separate State-sponsored individual plan for limited categories of individuals who would not otherwise be eligible for Medicaid coverage (for example, full-time college students ages 19-22 and working disabled adults with incomes up to 100% of FPL). The application requests continuation of the programs in their present form. The federal comment period is open through November 12, 2016.

Oregon: Increased Primary Care Spending Associated With Lower Overall Expenditures, Report Finds

A new study from Portland State University on behalf of the Oregon Health Authority found that individuals who sought care at clinics designated as Patient-Centered Primary Care Homes (PCPCHs) incurred significantly lower overall healthcare expenditures than individuals who sought care elsewhere. The study found that the PCPCH program reduced total service expenditures per person by 4.2%, or $41 per person per quarter, despite an overall 1% increase in service use. These results indicate that every $1 increase in primary care expenditures under the PCPCH program saved an average of $13 in other services, such as specialty care, emergency department and inpatient care, and that the PCPCH program has saved approximately $240 million over its first three years. The authors’ sample included approximately 1.1 million individuals in Oregon that had at least one primary care visit and consistent, full-year insurance coverage (all payers were included).

Oregon: Coverage Expansion Led to Increased ED Utilization Two Years Later, Study Finds

A new study from the New England Journal of Medicine found that emergency department (ED) use remained high two years after individuals gained coverage as part of Oregon's 2008 Medicaid lottery. The study found that ED utilization by those that gained coverage through the lottery increased by as much as 65% and remained consistently elevated relative to the control group over a period of 24 months following enrollment. A previous examination of the Oregon Medicaid lottery by the authors, which looked at only the first 15 months following enrollment, found that ED visits increased by 40% for lottery winners; however, this was met with speculation that utilization would decrease over time as pent-up demand dissipated. The Oregon Health Authority responded to the new study by noting that avoidable ED usage has decreased by 4% over the past two years and that policies designed to better coordinate care and increase use of preventive services will take time to show measurable impacts.

Oregon: State Increases Aggregate Medicaid Capitation Rates, Remains Within Cost Growth Limit

The Oregon Health Authority has increased aggregate 2017 coordinated care organization (CCO) Medicaid capitation rates by 3.2%, which falls within the State's agreed upon 3.4% cost growth limit under its current 1115 waiver. Rate changes for individual CCOs ranged from a decrease of 6.5% to an increase of 11.6%. The State's 16 CCOs are each provided a monthly global capitation amount to manage the physical, behavioral and oral health needs of the Medicaid population.

Washington: Governor Mandates Plan to Combat Opiate Crisis

Governor Jay Inslee (D) has issued an executive order to implement a statewide opioid “response plan” due to the State’s opiate addiction and overdose crisis. The response plan directs thirteen state agencies, including the Washington Health Care Authority (HCA) (the Medicaid agency), to work with local health departments, tribal authorities, law enforcement, and other stakeholders to address four overarching goals: 1) prevent opioid misuse and abuse; 2) treat opioid dependence; 3) prevent deaths from overdose; and 4) use data to monitor morbidity and mortality and evaluate interventions. The HCA will support several of the activities in the response plan, such as: training providers on opioid prescribing and pain management; requiring Medicaid managed care plans to follow opioid prescribing best practices; and working with jails and prisons to ensure incarcerated persons are initiated or maintained on medications for opioid use disorder. Government agencies participating in the response plan are required to submit a progress report on their activities by December 31, 2016.

FEDERAL MEDICAID REFORM AND EXPANSION UPDATES:

Kaiser’s Annual 50-State Medicaid Survey Finds Widespread Reform Efforts

The Kaiser Family Foundation released the results of its 16th annual 50-state (plus the District of Columbia) survey of Medicaid directors, highlighting policy changes implemented in state Medicaid programs in FY 2016 and those planned for FY 2017. The extensive report reviews each state’s policies and initiatives in managed care; eligibility and enrollment; premium rates and cost-sharing; delivery system and payment reforms; long-term services and supports reforms; benefit design; and general administrative challenges. The survey found that states are increasingly using managed care organizations to promote “value-based payment” and address the social determinants of health, and 29 states are adopting or expanding other delivery system reforms to better manage care such as patient-centered medical homes, health homes, accountable care organizations, and Delivery System Reform Incentive Payment (DSRIP) programs. Nearly every state is working to expand the number of persons served in community settings in FY 2016 and FY 2017, primarily through increased enrollment in home and community-based services waivers and State Plan Amendments.

HHS OIG Advises Continuation of Express Lane Eligibility Option

HHS’s Office of Inspector General released two audits and a companion report on states’ compliance with federal regulations when making Medicaid and CHIP eligibility determinations under the express lane eligibility (ELE) option, in which a state Medicaid/CHIP agency uses findings from a different state agency’s eligibility determination to facilitate enrollment. The report found that ELE appears to meet the intended objective of easing eligibility and enrollment, with the 14 states that adopted ELE experiencing reduced administrative burden and cost savings. OIG concluded that “reauthorization of the ELE option would allow States that rely on ELE to continue its use and give other States the opportunity to adopt ELE and likely experience similar benefits.” It did not identify any reasons to discontinue voluntary use of ELE and noted that states generally made ELE determinations in accordance with federal requirements. Overall, an estimated 818,000 Medicaid beneficiaries were enrolled in coverage via ELE; however, the report notes that approximately 11% of these beneficiaries may be “potentially ineligible” because applications were not always complete and that states did not develop eligibility error rates in accordance with federal requirements. OIG’s recommendations include issuing CMS guidance to states on calculating statutorily required eligibility error rates, and continued CMS monitoring for compliance. CMS concurred with OIG’s recommendations and described steps it was taking to address the report's’ findings. The ELE audits are required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

Medicaid Enrollment and Spending Growth Slowed in 2016

Total Medicaid spending growth slowed from 10.5% in FY 2015 to 5.9% in FY 2016 and enrollment growth slowed from 13.2% to 3.9%, according to the Kaiser Family Foundation’s 16th annual survey of Medicaid directors in all 50 states and the District of Columbia. (Kaiser published a separate report using the same survey data titled “Implementing Coverage and Payment Initiatives.”) Enrollment and total Medicaid spending growth is expected to slow further in 2017 though state spending is expected to increase slightly—from 2.9% to 4.4%—as the federal government’s share of spending for the expansion population reduces from 100% to 95%. While enrollment growth between 2015 and 2016 slowed for both expansion states (19.3% down to 4.8%) and non-expansion states (3.9% to 1.1%), spending growth differed between expansion and non-expansion states. Expansion states saw spending growth slow (from 10.3% to 7.1%) while non-expansion states saw spending growth increase (from 2.2% to 3.8%). Medicaid officials also identified the high costs of specialty drugs and payment increases for specific provider groups as putting upward pressures on spending.

Medicaid Expansion is Associated With Improved Hospital Finances, Study Finds

Hospitals in Medicaid expansion states saw “significantly increased” Medicaid revenue, decreased uncompensated care costs, and improved profit margins compared to hospitals in non-expansion states, according to a new study published in JAMA. Medicaid expansion was associated with a $2.8 million decline in mean annual uncompensated care costs per hospital and a $3.2 million increase in mean annual Medicaid revenue per hospital, relative to hospitals in non-expansion states. Medicaid revenue as a percentage of total revenue increased by 1.4 percentage points among states with Medicaid expansion and decreased by 0.1 percentage points among states without Medicaid expansion during this same period. The authors note that further study is needed to assess longer-term implications of Medicaid expansion on hospital finances.

OTHER FEDERAL AND STATE HEALTH REFORM NEWS:

10% of Uninsured Are in the Coverage Gap, 43% Qualify for Medicaid or Subsidized Marketplace Coverage

Nearly one in ten of the 27 million nonelderly uninsured earns too little to qualify for Marketplace subsidies and too much to qualify for Medicaid (the “coverage gap”), according to a Kaiser Family Foundation analysis of 2016 Current Population Survey data. Approximately 11.7 million (43%) of the uninsured are eligible for Medicaid or subsidized Marketplace coverage, and 5.4 million (20%) are ineligible for ACA coverage due to their immigration status. Approximately 4.5 million (16%) of the uninsured has an offer of employer-sponsored insurance (ESI), but data do not indicate if the offer is affordable under the law. If it is not affordable, the individual would be eligible for a Marketplace subsidy. Finally, the remaining 3.0 million (11%) of the uninsured do not qualify for Marketplace subsidies because they earn too much.

HHS Analysis Reviews Rural Hospital Participation in Delivery System Reform Initiatives

A new issue brief from HHS’s Assistant Secretary of Planning and Evaluation examines rural hospitals’ participation and performance in federal delivery system reform programs and presents several strategies for improvement. In FY 2015, 60% of rural hospitals (compared to 35% of urban hospitals) were unable to participate in CMS’s three main hospital-focused delivery system reform programs (the Hospital Readmissions Reduction Program, the Hospital Value-Based Purchasing Program, and the Hospital-Acquired Conditions Reduction Program) because they did not participate in the payment system through which these programs are run (the Medicare Inpatient Prospective Payment System). Low patient volume and limited financial resources further hindered participation in reform programs for which rural hospitals are eligible. Despite this, the report notes that rural hospitals have certain innate characteristics that create potential for effective performance in delivery reform efforts, such as providing the full continuum of care for a broad geographic area, which fosters care coordination. The brief concludes by highlighting several federal reform programs that target rural hospitals and suggesting additional strategies for supporting delivery system reform efforts in rural settings.

Kentucky: Foundation Report Highlights Impact of ACA Implementation

Kentucky's uninsurance rate for non-elderly adults fell to a historic low of 8.9% in 2016, with 56% of the remaining uninsured citing cost as the main reason for remaining uninsured, according to a semi-annual study of the ACA’s impact on health insurance in the State. The report, which was prepared by the State Health Access Data Assistance Center (SHADAC) for the Foundation for a Healthy Kentucky, found a 10% decline in number of Kentuckians who had difficulty paying their medical bills between 2012 and 2014, but no change in the number of people delaying or skipping care due to cost. Between 2012 and 2015, there was a 77% decline in charity care and self-pay charges. The report also found that 71% of consumers who shopped for coverage on kynect, the State-based Marketplace, found it to be “excellent or good.” The State recently received CMS approval to discontinue kynect and use the federally-supported IT platform (HealthCare.gov). The report comes amid the State’s recent submission of an 1115 waiver application that proposes two new coverage options for the Medicaid expansion population: a premium assistance program for individuals with access to ESI; and a high deductible Medicaid managed care plan.

New York: Opioid Addiction Treatment Coverage Requirements for Large Group Policies Released

Large group insurers may no longer require preauthorization for inpatient substance abuse treatment within their networks, according to a recently-released Department of Financial Services guidelines. Large group policies must now also cover detoxification and maintenance medication. These changes follow legislation signed earlier this year that mandated coverage for opioid addiction treatment.

STATE STAFFING UPDATE:

Florida: Interim Medicaid Director Selected

The Agency for Health Care Administration named Beth Kidder, the assistant deputy secretary for Medicaid policy and quality, as the State’s next interim Medicaid director. Kidder replaces Justin Senior, who left the position to become the agency’s interim secretary after former secretary Liz Dudek retired.