House Ways and Means Committee advances three discrete healthcare bills as part of the broader repeal and replace effort; Nevada sends Medicaid-for-all legislation to the Governor; and New York requires insurers to remain in the Marketplace or face exclusion from Medicaid.

FEDERAL HEALTH REFORM NEWS:

House Ways and Means Committee Advances Three Healthcare Bills

The House Ways and Means Committee voted to advance three narrowly focused healthcare bills that are part of Republicans’ overall ACA repeal and replace strategy. The first bill (H.R. 2372) would amend the AHCA to allow veterans who are eligible for but not enrolled in Department of Veterans Affairs coverage to be eligible for Marketplace premium tax credits. The second (H.R. 2579) would permit AHCA tax credits to be used for purchasing COBRA plans. The third (H.R. 2581) would require confirmation of eligibility and residency status by the Social Security Administration or Department of Homeland Security for individuals seeking Marketplace premium tax credits. The COBRA bill received one Democratic vote (Ron Kind [WI]); the other two bills passed on party line votes.

STATE CONSUMER PROTECTION AND COVERAGE ACTIVITY:

California: Senate Passes Prescription Drug Cost Transparency Bill

The State Senate approved a bill that would require drug manufacturers to provide a 90-day advanced notice to health plans and State purchasers of increases in the wholesale cost of drugs. Manufacturers would also have to notify the State of wholesale cost, marketing, and usage of a new drug if its cost exceeds the threshold for a specialty drug under the Medicare Part D program. The State would then be required to publish this information online. The bill now goes to the Assembly, which rejected a similar bill last year.

California: Single Payer Bill Passes State Senate

A bill that would create a public single payer healthcare system in California passed the State Senate and now advances to the Assembly for further debate, including about how the system would be funded. The bill is estimated to cost $330 billion to $400 billion annually. A new analysis found that a 2.3% gross receipts and sales tax could provide the additional revenue needed to fund a single payer system beyond existing state and federal health funding.

California: Marketplace Develops Contingency Plan for Funding Cost-Sharing Reductions

Due to continued uncertainty over federal cost-sharing reduction payments (CSRs), Covered California will require qualified health plans (QHPs) to submit two rate filings for 2018, one for if CSR payments are funded, and one for if not, according to POLITICOPro. Covered California has also proposed requiring plans to load the CSR increases into silver plans only and to offer a second, off-Marketplace “separately rated, non-mirrored Silver plan” so that unsubsidized individual market purchasers could purchase silver plans; these purchasers would otherwise face significant premium increases. In a letter sent to CMS Administrator Seema Verma and published by POLITICOPro, Covered California Executive Director Peter Lee noted that without CSR payments, premiums for silver plans in California would increase by 16.6%, costing the federal government $200 million.

Maryland: Bill Limiting Increases in Prescription Drug Prices Becomes Law Without Governor’s Signature

A bill that prohibits generic drug makers from implementing an “unconscionable increase” in off-patent or generic drug prices became law after Governor Larry Hogan (R) chose not to sign or veto the legislation. The law gives the State attorney general the authority to sue generic drug makers who excessively raise the price of drugs without justification.

Nevada: Legislature Votes to Open Medicaid to All State Residents

The Legislature passed a bill that would allow all State residents to purchase Medicaid coverage, and instructs the State to pursue a federal waiver, if necessary, to allow individuals to use Marketplace premium and cost-sharing subsidies towards the purchase of Medicaid coverage. Premium, deductible and copayment levels are not addressed in the bill, and Medicaid coverage for these consumers would not include non-emergency medical transportation. Governor Brian Sandoval (R) has not indicated whether he will sign the bill.

New York: State Mandates Health Insurance Protections

The Department of Financial Services has issued emergency regulations requiring insurers provide the ACA’s 10 essential health benefits, maintain community rating, and provide free contraceptive coverage if the ACA is repealed. Additionally, any insurer that withdraws from the State's Marketplace will be banned from participating in Medicaid, CHIP, or New York's Basic Health Plan.

Ohio: Anthem Exits Marketplace Leaving at Least 18 Counties With No Marketplace Insurer

Anthem announced it will not offer 2018 Marketplace plans in Ohio, leaving at least 18 counties and 10,500 enrollees without a Marketplace option for 2018. Anthem cited uncertainty around cost-sharing subsidies and “an increasing lack of overall predictability” for its decision. Approximately 70,000 Ohioans have 2017 Marketplace coverage with Anthem.

New Tool Compares County-Level Marketplace Insurer Participation From 2014-2017

An interactive map from the Kaiser Family Foundation compares changes in Marketplace insurer participation rates from 2014-2017, noting that 21% of enrollees living in 33% of counties had access to only one Marketplace insurer in 2017 compared to 2% of enrollees living in 7% of counties in 2016.

FEDERAL AND STATE MEDICAID REFORM UPDATES:

Premiums and Cost-Sharing Are Barriers to Coverage for Medicaid/CHIP Enrollees

Medicaid and CHIP enrollees subject to premiums are more likely to lose or not enroll in coverage, and those subject to cost-sharing—even $1-$5 per week—may use less medical care, including necessary services, according to a Kaiser Family Foundation literature review of 65 studies published between 2000 and 2017. The review also found that Medicaid and CHIP premiums and cost-sharing do not increase state revenue due to more disenrollment, higher administrative expenses, and increased costs associated with emergency department use.

Medicaid Work Requirement Proposals Would Be Costly to States

Work requirements for Medicaid eligibility would be costly for states to implement and could increase enrollment denials and coverage interruptions, according to a blog post published by The Commonwealth Fund. The work requirements proposed under the AHCA would affect 22 million Medicaid enrollees in 2018—nearly 30% of all enrollees. The blog post also reviews state work requirement proposals from 2014 to 2017 and finds that three states—Maine, Wisconsin and Florida—proposed work requirements for traditional Medicaid populations and nine states proposed them for expansion adults. CMS has not yet approved work requirements in any state, though the Trump Administration has pledged greater flexibility under 1115 waivers to implement new program features, including work requirements.

Alabama: Public Comment Sought for Amendment to RCO Program

The State Medicaid agency is seeking to amend its 1115 waiver to phase in implementation of Regional Care Organizations (RCOs), locally-led managed care organizations, and request a waiver to allow mandatory enrollment when only one RCO is operating in a region. The State proposes to phase in the program on a geographic basis, launching RCOs in two regions on October 1, 2017 and the remaining three regions by October 1, 2018. The start date of the RCO program was previously postponed from October 1, 2016 to October 1, 2017 due to a State Medicaid funding shortfall. The amendment acknowledges that the waiver funding previously approved by CMS will need to be re-calculated given the phased-in approach. The public comment period is open until July 2, 2017.

Illinois: House Passes Bill to Slow Medicaid Managed Care Procurement Process

The House passed an amended bill that would require the State to use the regular procurement process when soliciting Medicaid managed care contracts, which could derail the re-procurement process currently underway. The State is in the process of expanding the Medicaid managed care program to at least 80% of Medicaid recipients, while limiting the number of plans that can participate in the program. The amended bill will be considered by the Senate Executive Committee before going to the full Senate for a vote.

Maine: Medicaid Accountable Communities Initiative Saves $5.4 Million

The State’s Medicaid Accountable Communities (AC) program, an ACO-like model offering shared savings payments to providers who achieve savings and meet quality performance metrics, saved $5.4 million in its first year, distributing a total of $850,000 in shared savings payments to the four participating ACs. The AC program has expanded over the past three years, with 80 practices and 55,000 Medicaid enrollees currently participating, compared to 28 practices and 32,000 members in its first year.

FEDERAL AND STATE BUDGET NEWS:

CMS Proposes 35% Cut to Marketplace Funding in FY 2018 Budget

CMS is requesting a nearly 10% decrease ($379 million) in FY 2018 discretionary funding for Medicare, Medicaid and Marketplace activities, including a 35% reduction ($239 million) in funding for Marketplace operations. The request also forecasts a 9% decrease ($114 million) in user fees on issuers offering products on the federally-facilitated Marketplace, and pledges to "streamline Exchange operations and provide States with greater flexibility."

Colorado: Governor Signs Bill Averting Hospital Funding Cuts

Governor John Hickenlooper (D) signed a spending bill that prevents $528 million in cuts to hospitals, which could have led to rural hospital closures, by excluding hospital provider fees collected by the State from the State’s fiscal year spending limit. The legislation also doubles Medicaid co-pays for prescription drugs, emergency room visits, and outpatient services.

Oregon: Lawmakers Propose $934 Million Plan to Close Medicaid Budget Gap, Revive Reinsurance Program

Legislators in the House held the first public hearing to discuss a $934 million tax package, introduced with bipartisan and industry support, that would address the State’s Medicaid budget shortfall and revive a reinsurance program that expired at the end of 2016. The package includes a 4%-6% tax increase on hospitals, and reinstates a 1.5% assessment on health plans and coordinated care organizations (Medicaid managed care plans) that expired in 2013. The reestablished reinsurance program is projected to reduce Marketplace premiums by approximately 5%, though it would increase employer-based insurance premiums.

STATE STAFFING UPDATES:

Idaho: New Department of Health and Welfare Director Appointed

Governor Butch Otter (R) appointed Russ Baron to become the director of the Department of Health and Welfare, which includes the State Medicaid agency, following the retirement of current director Richard Armstrong on June 30. Baron is currently the deputy director.

Maine: New Acting Commissioner Appointed

Ricker Hamilton has been appointed acting Commissioner of the Department of Health and Human Services, which houses the State Medicaid Agency. Hamilton was previously the deputy commissioner of programs at DHHS.