Judge Dismisses Medicaid Expansion Challenge

A Superior Court judge dismissed the Legislature's lawsuit against Governor Bill Walker's (I) Medicaid expansion, which was implemented via executive order last summer. The court found that the Governor was within his rights to expand Medicaid without the Legislature's support, citing the Governor's authority to accept federal funds unilaterally for mandatory Medicaid enrollment categories. Governor Walker praised the decision while State Representative John Coghill (R), who has played a leadership role in the lawsuit, said the Legislature would appeal the decision to Alaska's Supreme Court.


Report Estimates Medicaid Expansion Worth Up to $757 Million as Governor Introduces New Expansion Bill

Up to $757 million over the next five years hangs in the balance if Arkansas opts not to renew its Medicaid expansion, according to an updated estimate prepared by The Stephens Group for Arkansas's Health Reform Legislative Task Force. This estimate, an increase over projections released in August 2015, is said to be a result of lower-than-expected program costs and a greater number of traditional Medicaid beneficiaries transferring to the expansion group (which has a higher federal matching rate). Shortly after the report's release, Governor Asa Hutchinson (R) introduced draft legislation to renew the State's Medicaid expansion beyond its December 2016 expiration date. The Governor's plan, called "Arkansas Works," proposes mandatory premium assistance for beneficiaries with access to cost-effective employer-sponsored insurance, a work referral program, and premiums for beneficiaries with incomes above 100% of FPL. Governor Hutchinson said failure to approve Arkansas Works would lead to additional cuts to the State budget. Lawmakers will consider the Governor's plan, as well as a plan from the Governor to transition certain high-risk populations and services from the State's traditional Medicaid program to full-risk managed care, at a special legislative session set to begin April 6. A competing managed fee-for-service bill introduced by legislators will not be considered.


Medicaid Expansion Positively Impacted Economy, Trend Expected to Continue

Since Medicaid expansion was implemented, Colorado has added 31,000 jobs, raised annual household earnings by nearly $650, and added $3.8 billion to the State economy, according to a new report commissioned by the Colorado Health Foundation and prepared by the Futures Center at Colorado State University. The report projects that by fiscal year 2034-2035, Medicaid expansion will have added approximately 43,000 new jobs to the State, raised average annual household earnings by $1,033, and added $8.5 billion to the State economy, which will increase General Fund revenue from $102.4 million to $248.3 million. The General Fund is not expected to incur any additional expenses due to expansion.


Legislature Votes Down Proposal to Extend Medicaid to "Gap" Population

The House voted on the last day of the legislative session to reject the Senate's proposal to extend Medicaid coverage to the estimated 78,000 uninsured Idahoans in the coverage gap, those who earn too much to qualify for Medicaid but too little to qualify for federal tax subsidies on the Marketplace. The proposal would have required the Department of Health and Welfare to seek a federal waiver to implement a managed care program for the "gap" population. As a partial expansion, the proposal would not have been eligible for the enhanced federal funding. Despite Democratic pleas, Governor C.L. "Butch" Otter (R) said he will not hold a special session to address the issue, nor will he use executive authority to intervene. He will, however, support the bipartisan legislative committee that is slated to study the issue over the summer. The Republican House Speaker says the goal is to develop a proposal to provide health insurance to individuals in the coverage gap prior to the 2017 legislative session.


Governor Signs Bill Giving Legislature Authority Over Medicaid Expansion

Governor Mike Pence (R) signed a bill requiring legislative approval to make modifications to the State's Medicaid expansion program, Healthy Indiana Plan 2.0, which is authorized through a demonstration that will require renegotiation prior to its expiration in 2018. According to supporters, the bill was designed to strengthen the State's position for renegotiating the terms of the waiver with the federal government. Governor Pence, who is up for re-election this year, said he wanted to ensure the State "has a solid legal framework" for the program before entering into those negotiations, especially considering uncertainty regarding the federal administration after the election.


State Estimates Over $100 Million in Net Savings in First Year of Medicaid Expansion

Governor John Bel Edwards' (D) administration estimates $155.3 million in State savings from Medicaid expansion in the first year of implementation, more than offsetting the estimated $51 million in costs, according to details released to media. The estimated savings would accrue from reduced uncompensated care payments, enhanced federal match for supplemental payments to safety net hospitals, shifting current Medicaid beneficiaries to the expansion group (which has a higher federal matching rate) and replacing general funds with Medicaid funds (for example, hospital costs for incarcerated individuals). These factors were excluded from former Governor Bobby Jindal's (R) administration's estimates of Medicaid expansion savings and costs. Governor Edwards announced the estimate in his "State of the State" address, at which time he also indicated a willingness to consider "personal responsibility" measures, such as co-payments, work referrals and healthy behavior incentives.


Medicaid Expansion Enrollment Surpasses Expectations

Over 36,300 individuals have enrolled in Montana's newly expanded Medicaid program since the program launched on the first of the year, according to a report prepared for the Legislative Finance Committee. Enrollment has surpassed Governor Steve Bullock's (D) estimated enrollment of up to 26,000 by June 2016. Approximately one-third of enrollees are enrolled through Blue Cross Blue Shield of Montana, which, as the program's Third Party Administrator, is responsible for establishing networks of healthcare providers, facilitating provider reimbursement on behalf of the State, collecting enrollee premiums and tracking cost-sharing. The remaining enrollees are covered by State-administered Medicaid, which covers individuals with incomes under 50% of FPL and those who are Native American or considered "medically frail."

New Hampshire

Legislature Approves Medicaid Expansion Renewal With Modifications

The New Hampshire Legislature voted to renew the State's Medicaid expansion program through 2018, with several new requirements, including that enrollees be employed or in pursuit of work and pay co-pays for non-emergency visits to the emergency room. The bill, however, includes a severability provision that would permit renewal of the program even if CMS does not approve some of the new requirements, including work status. The bill funds the expansion through three sources of funding: the insurance premium tax on health plans that serve expansion enrollees, voluntary donations from acute care hospitals and transfers from the State's high risk pool. The program would be repealed in the event that these funding sources were not sufficient to cover the State's share of the costs. The bill now goes to Governor Maggie Hassan (D), who is expected to sign it.

South Dakota

Governor Pauses on Medicaid Expansion

Governor Dennis Daugaard (R) decided not to pursue Medicaid expansion during the final weeks of this year's legislative session, despite a sought-after CMS policy change that broadens the scope of services for which the federal government will fully cover the cost of care for Medicaid-eligible American Indians and Alaska Natives. State legislators expressed mixed reactions to these developments, with Republicans welcoming the Governor's delay and Democrats expressing disappointment, according to media reports. State health officials will now present Governor Daugaard with a Medicaid expansion plan that includes financial estimates by "early summer," according to comments made to the media by the State's health secretary to Rachana Pradhan of POLITICO Pro. The Governor will then determine whether to move forward with expansion and whether to do so during a special session in 2016 or during the regular 2017 legislative session.


Governor Signs Limited Medicaid Coverage Bill

After years of legislative battle, Governor Gary Herbert (R) signed a limited extension of Medicaid coverage to approximately 16,000 Utahns, which is significantly less than the 125,000 that would have been covered under several failed Medicaid expansion plans. The plan targets very low-income, chronically homeless Utahns, and guarantees coverage for at least 12 months. The State will spend $30 million on the program, 45% of which will be provided by hospitals, and will draw down $70 million in federal funds, with a significantly lower federal matching rate than would have been provided through full expansion. Democratic lawmakers who had supported the ACA's Medicaid expansion expressed frustration with the plan, saying that it is fiscally unwise and leaves thousands of low-income Utahns without coverage. The State will now begin the process of seeking a federal waiver.

National News

Medicaid Expansion Improves Access to Behavioral Healthcare

Medicaid expansion is associated with a reduction in unmet behavioral health needs among low-income adults, according to a new report from HHS's Office of the Assistant Secretary for Planning and Evaluation. One study cited in the report found that low-income individuals with a serious mental illness were 30% more likely to access mental health treatment if they were enrolled in Medicaid. As of 2014, 28% of low-income uninsured individuals living in non-expansion states had either a mental illness or a substance use disorder and "many" of those individuals would gain more affordable coverage if their state opted to expand Medicaid. The report also found that states that expand Medicaid may significantly improve their behavioral health programs—including increased availability of services—without incurring new costs, and that treating behavioral health conditions can reduce statewide disability rates, increase employment productivity, and decrease criminal justice costs.

Medicaid Expansion Increases State Savings and Revenue, Report Finds

Data from 11 Medicaid expansion states and D.C. confirm that states continue to realize savings and revenue gains as a result of expanding Medicaid, according to an updated report from the Robert Wood Johnson Foundation State Network and Manatt Health. Findings indicate any state that expands Medicaid should expect to: achieve savings related to previously eligible Medicaid beneficiaries becoming newly eligible for the adult group under expansion; reduce state spending on programs for the uninsured; and bring in additional revenue from existing insurer or provider taxes. Key examples of new state data include:

  • Pennsylvania estimated savings of $108 million in state fiscal year (SFY) 2015, as beneficiaries of a state-funded medical assistance program transitioned to the expansion group.
  • In SFY 2015, Arkansas decreased their spending on pregnant women by 50% (saving $15.2 million), and projects $24.4 million in savings for SFY 2016.

Federal and State Evaluations of Medicaid Expansion Waivers May Provide Guidance for Future

A Kaiser Family Foundation analysis of the 1115 waivers being used by six Medicaid expansion states found that each state's federally-required waiver evaluation will assess its program across five common areas: coverage, access to care and utilization, premiums, "healthy behavior incentives," and program costs. The authors also reviewed the waivers' features, finding certain common elements: a premium assistance model, in which states use federal Medicaid funds to purchase Marketplace or other private coverage for enrollees; enrollee premiums; elimination of the non-emergency medical transportation benefit; and healthy behavior incentives. HHS is also evaluating a larger subset of 1115 waivers—including those related to Medicaid expansion—which will focus specifically on Marketplace premium assistance, healthy behavior incentives, and premiums.

Providers for the Homeless See Revenue Gains Under Medicaid Expansion While Insurance Rates Increase Among the Homeless

The insurance rate for individuals who receive healthcare through programs that serve the homeless increased by 22 percentage points between 2012 and 2014 in expansion states, compared to four percentage points in non-expansion states, according to a Kaiser Family Foundation report. The report also notes that healthcare providers serving the homeless in expansion states saw smaller cost increases and greater revenue gains compared to those in non-expansion states.

Medicaid Expansion Helps to Alleviate Financial Pressures for Rural Hospitals

Failure to expand Medicaid, the federal budget sequestration, and cuts to uncompensated care and disproportionate share payments have created "significant downward pressure" on rural hospital margins, according to a report from iVantage Health Analytics. The report's authors note that Medicaid expansion helps to insulate hospitals from the impact of payment reductions.