The ACA reduced uninsurance among veterans by 40%; Marketplaces showed signs of stabilizing in 2016; and some states are giving insurers more time to make decisions about offering coverage on the Marketplace next year in light of the uncertain future of cost-sharing reduction payments.
FEDERAL REPEAL AND REPLACE NEWS AND ANALYSES:
New Analyses Show Spending Implications of Repeal and Replace Debate
Two new analyses from Covered California, the State-based Marketplace, find that federal spending on reinsurance and cost-sharing reduction payments would reduce the amount of money needed for premium tax credits, offsetting some of the cost of these payments.
- Reinsurance Funding. Covered California found that creating a $15 billion per year federal reinsurance program, instead of using those funds for a "Stability Fund" as the AHCA proposes, would result in a $3.75-$5 billion annual net cost to the federal government because the program would reduce premiums and, as a result, the amount of premium tax credits paid by the federal government. According to the analysis, a reinsurance program is a more cost-effective way to spend the $15 billion a year allocated to the AHCA Stability Fund for 2018 and 2019.
- Cost-Sharing Reduction Payments. A separate analysis found that eliminating federal cost-sharing reduction (CSR) payments would cost the federal government at least $47 billion more over the next ten years. Ending CSR payments would lead to increased premiums which would in turn increase federal spending on premium tax credits. While the government would save $135 billion by eliminating CSR funding, spending on premium tax credits would increase by $182 billion, a net increase of $47 billion.
Heritage Foundation Suggests Modifications to AHCA Tax and Coverage Provisions
The Heritage Foundation argues in two new briefs that Congress should amend the AHCA to: (1) repeal the ACA's "Cadillac tax" effective in 2020 (when the tax is currently slated to be implemented) and establish a cap, indexed to inflation, on the amount of employer-sponsored benefits that count toward pre-tax compensation; and (2) extend pre-existing condition protections only to those people who maintain continuous coverage for 12 months without a gap longer than 63 days. The policy, modeled on pre-ACA HIPAA rules, is a variation on the AHCA provision that would impose a 30% premium on enrollees who have gaps in coverage in the prior 12 months.
Uninsurance Rate Among Veterans Dropped 40% Following ACA Implementation
The uninsurance rate among veterans decreased by nearly 40% between 2013 and 2015, from 9.6% to 5.9%, following implementation of the ACA's coverage provisions, according to the Urban Institute. Coverage gains were largest among veterans with incomes below 138% of FPL in Medicaid expansion states. While the Department for Veterans Affairs provides health insurance to veterans who meet minimum duty requirements or other qualifying conditions, nearly 552,000 veterans were uninsured in 2015.
FEDERAL AND STATE MARKETPLACE ACTIVITY:
Shorter Open Enrollment Periods May Decrease Enrollment by Healthier Individuals, Reduce Plan Shopping
The shorter open enrollment period implemented by CMS's recent market stabilization rule may decrease enrollment by younger, healthier individuals who help stabilize risk pools and premiums, according to a Health Affairs blog post. The authors also found that shorter open enrollment periods could decrease plan switching among re-enrollees, which often leads to enrollees selecting plans with lower premiums. The analyses are largely based on Kentucky's 2015 Marketplace enrollment data, which showed that nearly 60% of new enrollments and more than one-third of those switching to a lower metal level plan occurred during the second half of the three-month open enrollment period.
Individual Market Showed Signs of Stabilization in 2016
A Kaiser Family Foundation analysis found that the average medical loss ratio (MLR) for individual Marketplace plans improved from 103% in 2015 (meaning claims costs outpaced premiums collected) to 96% in 2016. However, additional stabilization measures, such as continuing cost-sharing reduction payments, are needed if the individual market is to remain profitable in future years. The findings are consistent with a Standard and Poor's analysis that found 2016 Blue Cross Blue Shield Marketplace plans experienced improving financial performance in 2016.
States Extend Marketplace Rate Filing Deadlines Amid Uncertainty Over Federal Cost-Sharing Subsidies
Five states, each with a State-based or State-Partnership Marketplace, have extended their rate filing deadlines for 2018 Marketplace plans: Colorado, Kentucky, New Hampshire, Oregon and Washington. Both Colorado and Oregon extended their deadlines by one month to mid-June; New Hampshire pushed its deadline from April 24 to June 2; Kentucky from May 17 to June 7; and Washington from May 5 to June 7. Several states, including Virginia, Maryland, California and Connecticut, currently have rate filing deadlines in the first week of May. In February, the federal government delayed the filing deadline for issuers in States using HealthCare.gov from May 3 to June 21. President Trump recently threatened to withhold cost-sharing reduction payments to insurers and it remains unclear whether HHS will continue to make the payments.
Colorado: House Passes State-Funded Marketplace Premium Assistance Bill and Governor Signs Additional Health Bills
The House passed a bill that would provide State-funded premium subsidies to Marketplace enrollees that earn between 400% and 500% of FPL, have premium costs greater than 15% of their annual income, and live in the State's rural communities that have premium rates as much as twice that of the State's urban areas. The program would run from July 1, 2017 through December 2018 or until the $5.7 million appropriated to the program runs out, or if the ACA is repealed or replaced. The bill also creates a 60-day special enrollment period beginning June 1, 2017 for plans effective through the end of 2017. The bill now goes to the Senate where it has bipartisan support and sponsorship, though passage remains uncertain. Also this week, Governor John Hickenlooper (D) signed three other healthcare bills, including one that requires greater transparency on how insurers develop provider networks and a direct primary care bill.
Montana: House, Senate Advance Bill to Establish Reinsurance Program
A bill authorizing the State to establish a reinsurance program or high-risk pool, as well as to seek federal funding for the initiative through a section 1332 waiver, passed the Senate and House and is now awaiting Governor Steve Bullock's (D) signature.
North Carolina: Blue Cross Blue Shield's $130 Million Risk Corridor Lawsuit Dismissed
A federal judge dismissed a $130 million lawsuit brought against the federal government by Blue Cross Blue Shield of North Carolina for outstanding risk corridor payments. The court agreed with HHS that both the ACA and its implementing regulations do not require HHS to make risk corridor payments on an annual basis. Judges have split in similar lawsuits brought by other health insurers.
South Carolina: CO-OP Files Lawsuit in Federal Court Over Reinsurance Payments
Consumers' Choice Health Plan, the State's CO-OP, filed a lawsuit in federal court claiming that CMS's decision to not make $36.9 million in reinsurance payments to the CO-OP precipitated its shutdown in 2015. Consumers' Choice was one of 18 CO-OPs that exited the Marketplaces in 2015 and 2016.
Washington: Marketplace Enrollment Up 23%
Enrollment in the Washington Health Benefit Exchange increased 23% during 2017 open enrollment, according to a report issued by the State-based Exchange. The increase is 14 percentage points more than the increase between the 2015 and 2016 open enrollment periods.
FEDERAL AND STATE MEDICAID REFORM NEWS:
Trump Signs Legislation Allowing States to Restrict Grant Funding to Abortion Services Providers
President Trump signed a bill that nullified an Obama Administration regulation prohibiting state and local governments from withholding federal Title X family planning grants for abortion services providers, like Planned Parenthood. The measure cleared Congress last month with Vice President Mike Pence breaking the 50-50 tie in the Senate.
Michigan: House and Senate Appropriations Panels Approve New Models to Integrate Physical and Behavioral Health Services
House and Senate budget subcommittees separately approved language that tasks the State with developing a plan to integrate Medicaid behavioral and physical health services. The Senate panel's plan instructs the Department of Health and Human Services (DHHS) to pilot projects to allow Medicaid managed care plans to manage physical and behavioral healthcare. The House language asks DHHS to develop a plan to replace the 10 existing regional mental health organizations with a statewide behavioral health managed care organization, and to pilot an integration model in Kent County that would bring together community mental health services programs and providers to coordinate behavioral and physical health care.
Pennsylvania: Governor's Minimum Wage Proposal Would Raise Income Levels, Reduce Medicaid Enrollment
Governor Tom Wolf's (D) proposed budget provision to raise the State's minimum wage from $7.25 to $12.00 an hour is expected to reduce Medicaid enrollment by 100,000, as increased wages make fewer people eligible for Medicaid. Administration officials estimate this would reduce "public benefit" spending by $50 million, primarily due to reductions in Medicaid spending. The House recently passed a budget that is being considered by the Senate Appropriations Committee; the budget does not include the Governor's proposal to raise the minimum wage but Democratic House leadership noted the proposal had "large majority support."
STATE STAFFING UPDATES:
Louisiana: Recently Retired Former Medicaid Director Lauded for Her Work
Recently retired former Medicaid director Ruth Kennedy has been praised by colleagues as a "pioneer, fearless and resourceful" with "deep and abiding compassion and respect for the families and individuals who, without her efforts, would have remained uninsured, sick and struggling." During her tenure, Kennedy implemented Louisiana's Medicaid expansion and was a national leader on implementing consumer-friendly Medicaid enrollment policies.
Ohio: Department of Insurance Names Deputy Director
Carrie Haughawout has been named deputy director of the Department of Insurance, replacing Jillian Froment, who was promoted to director earlier this month. Haughawout previously served as the director of the healthcare and small business council at the Ohio Chamber of Commerce.