Draft 1115 Waiver Application Includes Premium and Lockout Requirements for Medicaid Expansion Population

The Department for Medicaid Services released a draft 1115 demonstration application to transform the coverage options available under Medicaid expansion (named "Kentucky HEALTH"), as well as introduce delivery system reforms targeting substance use disorder (SUD), chronic disease management, and managed care. Kentucky HEALTH proposes two coverage options for the expansion population: a premium assistance program for employer-sponsored insurance, and a "consumer driven health plan," a high-deductible plan with managed accounts to fund the deductible and enhanced healthcare benefits, such as vision, dental, over-the-counter medications and gym membership. The proposal would require monthly premiums (from $1 to $15) and impose a six month lockout period for those who fail to pay, which can be obviated by participation in a financial or health literacy course. Enrollees who are disenrolled for failure to comply with redetermination requirements are subject to the same lockout period. Able-bodied adults without dependents would also be required to participate in "community engagement and employment development" programs, a provision that goes beyond what CMS has approved in any state thus far. The waiver also includes delivery system reforms such as: a multi-county pilot program to improve access to mental health and SUD services; the adoption of chronic disease management programs best practices by Medicaid managed care programs; and cost control mechanisms and payment incentives for managed care organization to improve quality. The Kentucky HEALTH proposal, which is modeled after Indiana's Medicaid program, estimates $2.2 billion in savings over five years. The proposal is open to public comment through July 22, after which it will be submitted to CMS for approval. The proposal makes good on Governor Matt Bevin's (R) December announcement that he would overhaul the State's Medicaid expansion program.


Medicaid Expansion Launched Including Through SNAP Fast-Track

Nearly 40% of the 580,000 individuals eligible for Louisiana's Medicaid expansion have enrolled in the program since its June 1 launch. CMS approved Louisiana's use of a fast-track process to enroll SNAP (food stamp) recipients without additional income verification based on Medicaid and SNAP's similar income and verification requirements. The State estimates that over 100,000 SNAP recipients will be enrolled through this streamlined process. Louisiana is the first State approved to use SNAP data for Medicaid enrollment through a Medicaid State Plan Amendment; other states have received approval through time-limited Medicaid waivers. The SNAP income verification option will be available at initial enrollment and at renewal.


Study Finds Correlation between Medicaid Expansion and Drop in Uninsured Hospital Discharges

A new University of Michigan study found a rapid and sustained drop in uninsurance among nonelderly hospital patients in the first eight months of the State's Medicaid expansion program (April through December of 2014), compared with the corresponding months in 2012 and 2013. Uninsured patients accounted for approximately 6% of nonelderly adult discharges in 2012 and 2013 but only 2% in 2014. The study also showed the number of discharges for nonelderly adults with Medicaid increased from 23% in 2012 to 30% in 2014. Hospitals experienced a uniform shift in patient payer mix during that time: 88% had more Medicaid-covered patients in 2014 compared with the same time period in each of the two years preceding expansion. The study's authors analyzed data from 130 hospitals using the Michigan Health and Hospital Association's Michigan Inpatient Database.

North Dakota

Legislators Likely to Review Medicaid Expansion as 2017 Sunset Nears

Representative George Keiser (R), chairman of the Interim Health Care Reform Review Committee, cited budget concerns when he announced that the State will likely re-examine Medicaid expansion in its current form as the 2017 sunset provision nears. The State currently contracts with Sanford Health Insurance to administer the program. Representative Keiser has suggested that modifications to the contract may be required, such as changes to provider reimbursement, or that the State Human Services Department may take over the program. More than 20,000 North Dakotans are enrolled in the Medicaid expansion program.

South Dakota

Governor Will Not Call a Special Session to Consider Medicaid Expansion

Governor Dennis Daugaard (R) announced that he will not call a special legislative session to address Medicaid expansion, despite weeks-long efforts to rally enough support from lawmakers to approve a proposal. Governor Daugaard said he had heard from legislators that they needed more time to evaluate the proposal, though the Governor felt the plan would "increase healthcare access at no additional state cost and guarantee that the federal government won't shift its responsibility to pay for Native American healthcare to the state." The administration suggested the possibility of a special session as recently as last month, after CMS updated its reimbursement policies for care delivered through the Indian Health Service, which increased the State's projected cost savings from expansion by $18 million.

National News

Medicaid Expansion Positively Impacts Safety Net Providers, Report Finds

States that expanded Medicaid report significant reductions in uncompensated care provided by safety net institutions, and budget savings for hospitals and community health clinics, according to a report by the Georgetown University Center for Children and Families. The report's findings are based on telephone interviews with hospital systems and federally qualified health centers in three non-expansion states (Missouri, Tennessee, and Utah) and four expansion states (Arkansas, Colorado, Kentucky, and Nevada). While leadership in non-expansion states reported continued financial constraints, those in expansion states reported opening new clinics, buying equipment, hiring additional staff, and undertaking efforts to integrate and improve care delivery.

Medicaid Expansion Provides Enrollees With Greater Financial Protection Compared to Marketplace Coverage, According to Report

Marketplace enrollees earning above 100% of FPL in states that have not expanded Medicaid are at risk of facing higher premiums and out-of-pocket costs than they would if they were able to enroll in Medicaid expansion, according to a new report by The Commonwealth Fund. To compare costs, the report's authors use the example of a 40-year-old, non-smoking male earning 110% of FPL enrolled in either Medicaid or the second-lowest-cost silver plan in 18 non-expansion states. The "most important difference" between Medicaid and Marketplace plans, according to the report, is that Medicaid offers greater financial protections: most Medicaid enrollees do not pay premiums and Medicaid caps cost-sharing at 5% of income, while private plans have premiums and do not have income-based out-of-pocket limits. As a result, those who use a higher volume of healthcare services see an even greater cost savings under Medicaid compared to Marketplace coverage. According to the authors' analysis, projected Marketplace out-of-pocket costs, not including premiums, ranged from $500 to $2,250 across states, whereas Medicaid enrollees' cost-sharing ranged from $150 to $650 depending on use of services. Additionally, Marketplace enrollees would have an annual premium obligation of $264, while most Medicaid enrollees would have no premiums. The report further highlights that while Medicaid and Marketplace plans both provide the 10 essential health benefits under the ACA, benefits for expansion enrollees exceed Marketplace qualified health plan requirements.

Care Is More Affordable and Accessible for Medicaid Expansion Enrollees, Report Finds

Medicaid expansion has increased access to primary care and prescription drugs and made care more affordable for enrollees, according to a report from the Assistant Secretary of Planning and Evaluation at HHS. Research cited in the report found that visits to community health centers increased 46% in expansion states compared to 12% in non-expansion states, and that there was a 41% increase specifically in preventive visits in expansion states while non-expansion states saw no change. Expansion states also saw a 50% decrease in uninsured hospital discharges in addition to a 20% increase in Medicaid discharges. In 2014, Medicaid prescription rates increased 25% in expansion states compared to 3% in non-expansion states. On affordability measures, the report cites a survey that found 78% of expansion enrollees would not have been able to afford their care prior to enrolling in Medicaid expansion. The report also reviews expansion's impact on uninsurance rates and found that expansion states cut their uninsured rates in half while non-expansion states cut their rates by one-third.

Medicaid Expansion Positively Impacts State Finances, Analysis Finds

A Kaiser Family Foundation analysis of more than five dozen studies found positive effects of Medicaid expansion on multiple state economic outcomes, and a reduction in income- and race-based coverage disparities. Specifically, the report found that general fund spending on Medicaid grew more slowly in expansion states compared to non-expansion states and that spending per capita is at or below projections in nearly two-thirds of expansion states, despite higher-than-anticipated expansion enrollment in many states. The studies also found reduced uncompensated care costs in expansion states, and most found that expansion had either a positive or a neutral effect on employment and labor markets. The authors note that additional research will be needed to assess expansion's economic impacts once states begin paying a larger share of expansion costs. The analysis also found largely positive impacts of expansion on uninsurance rates, access to care, utilization of services, and health outcomes, though the report concludes that long-term research is needed to better determine expansion's impact on health outcomes.