CBO Reduces Marketplace and Medicaid Enrollment Projections

The Congressional Budget Office's (CBO) budget and economic forecast for 2016 to 2026 estimates that Marketplace enrollment will increase to 13 million in 2016, far less than CBO's previous 21 million projection. The number of individuals receiving premium subsidies will also be lower than expected: 11 million people per month versus the previously projected 15 million. Despite the reduced projections, CBO forecasts Marketplace and Medicaid enrollment growth continuing. According to the report, monthly Medicaid enrollment will be 77 million individuals in 2016, an additional one million people compared to 2015, which will increase Medicaid expenditures by 8.8% to $31 billion. Marketplace subsidy expenditures will increase by 47% to $56 billion in 2016. Outlays for the ACA's risk adjustment and reinsurance programs are expected to rise nearly 78% from $9 billion in 2015 to $16 billion in 2016, though payments will be offset by associated revenues. The CBO also estimates that a repeal of the Cadillac and medical device taxes would add $256 billion to the deficit over the 10-year-period.

Massachusetts: Marketplace Plans 1332 Waiver to Preserve Merger of Individual and Small Group Markets; Additional Waivers Contemplated

Representatives from the State-based Marketplace, the Massachusetts Health Connector, recommended seeking a 1332 waiver to permit small group insurance to be sold with quarterly premium rate setting and non-calendar-year plan years while preserving the State's merged individual and small group market risk pools. The draft waiver application is expected at the end of January, with submission to CMS in early March and implementation as early as January 2017. Policy issues, such as eligibility gaps that prevent some lower-income residents from accessing subsidies (the so-called "family glitch"), are also under consideration for additional 1332 waivers during a second phase of work. The two-phase approach was recommended partly in response to recent federal guidance indicating a high bar for federal review of waiver applications.

Vermont: Administration Releases Proposed All-Payer Healthcare System Details

Governor Peter Shumlin (D) and the head of the Green Mountain Care Board unveiled details of its all-payer system proposal, which would give the State control of rates paid under Medicare, Medicaid, self-insured health plans and commercial insurance, and would create a statewide capitation payment model. The federal government would allow Medicare to participate in Vermont's proposed system in exchange for the State coordinating Medicaid and commercial insurer participation, and committing to financial targets and quality goals. The plan also proposes to hold annual per capita increases in healthcare spending to 3.5% over five years, with a maximum growth rate of 4.3%. Accompanying these spending targets are quality measures that ensure residents see better health outcomes, including: increasing access to primary care, reducing the prevalence and improving the management of chronic diseases, and addressing the substance abuse epidemic. Under the proposed model, residents would be able to see their provider of choice and Medicare and Medicaid recipients would see no reduction in benefits. The State is negotiating terms of the all-payer Medicare waiver with CMS in anticipation of implementing the model in January 2017.