HHS and Treasury Release Guidance on Evaluating 1332 Waiver Applications

The Department of Health and Human Services (HHS) and the Treasury Department released joint guidance describing standards for reviewing State Innovation Waiver applications. The waivers—also called 1332 waivers—permit states to waive certain ACA requirements related to Marketplaces, federal subsidies, qualified health plans, and the individual and employer mandates, contingent on meeting certain statutory "guardrails." New details about the statutory guardrails appear to limit the types of 1332 waivers that can be approved. Significantly, the guidance requires states to consider the waiver alone when calculating its impact on the federal deficit, limiting states' abilities to incorporate potential Medicaid savings into calculations. Additionally, states are required to consider the impact on the state as a whole and on subgroups (such as the poor and elderly) to ensure each subgroup is not negatively impacted for comprehensiveness, affordability and coverage. Finally, the guidance notes that HHS and the Treasury will not be able to customize Federally-facilitated Marketplace and IRS practices and procedures for specific state waivers.

Focus Increasing on Higher Individual Shared Responsibility Payments in 2016

In an effort to encourage enrollment during the final week to sign up for coverage beginning January 1, attention on the penalty for not having health insurance has increased, first with a blog post from CMS. The post reminds individuals that the 2016 penalty is $695 per person or 2.5% of household income, whichever is higher, an increase from $325 per person or 2% of household income in 2015. It also reiterates that there will be no special enrollment period during tax filing time for individuals subject to the penalty. A Kaiser Family Foundation report released last week estimates that the average household penalty in 2016 will increase 47% to $969. The report's authors also estimate that of the 11 million uninsured eligible for Marketplace coverage, approximately one-third could purchase a bronze plan for less than the cost of paying the penalty.

Idaho: Administration Developing Proposal to Provide Basic Primary Care to Individuals in Coverage Gap

Governor C. L. "Butch" Otter's (R) administration is developing a State-funded proposal that would cover basic primary care for the approximately 78,000 Idaho residents who earn too much to qualify for Medicaid but not enough to qualify for federal tax subsidies to help them purchase health insurance through the State's Marketplace, according to local media. The preliminary plan, which is being fine-tuned for potential consideration during the 2016 legislative session, would not cover emergency room visits, acute care, hospitalizations, or prescription drugs. Given the State's opposition to Medicaid expansion, supporters of the proposal say it is a means of providing timely, cost-effective primary care to the indigent population in order to avoid more costly acute care. The State is exploring possible funding options, such as higher tobacco taxes, for the plan, which is projected to cost approximately $30 million annually.

Kentucky: Poll Suggests Residents Support Maintaining Medicaid Expansion and State-Based Marketplace

Over 70% of Kentuckians support maintaining Medicaid expansion in its current form rather than modifying it to cover fewer people, according to a new poll conducted by the Kaiser Family Foundation. The same poll also found that a majority of Kentuckians (52%) would prefer to keep Kynect, the State's health insurance Marketplace, rather than moving to the Federally-facilitated Marketplace (FFM). One-quarter of respondents would prefer to switch to the FFM, while most of the remainder were uncertain. Governor Matt Bevin (R) has not released his plan for Medicaid expansion, but has often stated that he intends to scale back the program. In his inauguration speech on Tuesday, he also reiterated his commitment to dismantling Kynect.