Congressional Republicans ask states for guidance on new healthcare legislation while insurers and providers urge caution; new reports find ACA repeal would increase uninsurance rates and cut billions of dollars in funding to states; and CMS approves a five-year extension of Arkansas’s alternative Medicaid expansion waiver.

STATEMENTS ON ACA CHANGES FROM LEADING HEALTHCARE GROUPS:

Congress Solicits Legislation Ideas From Governors and Insurance Commissioners

Republican leaders in the House have sent a letter to Governors and State Insurance Commissioners requesting ideas and recommendations for new healthcare legislation. The letter, signed by the House Majority Leader, and the Chairs and Chair-Elects of the Ways and Means, Energy and Commerce, and Education and the Workforce Committees, asks for input on the following topics: desired state flexibility in managing insurance options and pricing; legislative and regulatory reforms to help stabilize insurance markets; reducing Medicaid costs; improving affordability for patients; use of 1115 and 1332 waivers; interest in high-risk pools; and the impact of ACA repeal on existing state laws. Governors and Commissioners are asked to respond by January 6, 2017 and are also invited to participate in an early 2017 meeting to discuss proposed ideas. Separately, Republican members of the Senate Finance Committee invited Republican Governors to meet in January and provide input on Medicaid reforms. The meeting will focus on options to increase state flexibility, foster parity in Medicaid funding and coverage across states, ensure Medicaid spending is sustainable, and improve coordination for Medicaid and Medicare dual-eligible enrollees.

Washington and Vermont Ask Congress to Reconsider ACA Repeal

Washington Governor Jay Inslee (D) and Insurance Commissioner Mike Kreidler responded to a request for input on new healthcare legislation from House Majority Leader Kevin McCarthy (R), urging him to not repeal the ACA without a replacement that would maintain coverage access and affordability. Governor Inslee and Commissioner Kreidler write that repealing the ACA “would be a moral outrage,” and note the positive impacts of the law in Washington including: a $2.7 billion increase in State GDP; 51,000 new jobs following ACA implementation; a drop in the uninsurance rate from 14% to 6%; a 50% drop in uncompensated care costs; and a $350 million cut in State expenditures. Outgoing Vermont Governor Pete Schumlin (D), in a short response, asked that Congress “keep your hands off our Obamacare” and highlighted the positive impacts of the ACA in Vermont: 25,000 Vermonters gained coverage; 20,000 individuals are receiving financial assistance for care; and the State uninsurance rate was lowered to 2.7%.

Health Insurers, Actuaries, Providers, and Advocates Weigh in on Recommendations for ACA Repeal

A broad array of healthcare stakeholders, think tanks and advocacy organizations are weighing in on President-Elect Trump’s healthcare appointees and the ACA repeal debate with statements, analyses, and action plans.

• America’s Health Insurance Plans (AHIP), the national trade association representing health insurers, released its recommendations for new healthcare legislation if the ACA is repealed. Recommendations include: replace the individual mandate with other incentives to enroll, such as late enrollment penalties and waiting periods; fund temporary transitional cost-sharing reduction and reinsurance programs through “at least” January 1, 2019; increase pre-enrollment verification for special enrollment periods; and reduce “rules, regulations, and red tape” including on network adequacy and required benefits. AHIP also addresses potential Medicaid changes, stressing that federal financing for Medicaid should ensure sufficient funding for states during economic downturns, when Medicaid enrollment increases. AHIP also emphasizes the importance of actuarially sound methods and sufficient time to implement new rules and financing systems.
• The American Academy of Actuaries sent a letter to the U.S. House of Representatives warning that repealing the ACA without enacting a replacement, or ending cost-sharing reduction reimbursements, would likely lead to an unstable and unsustainable individual market. The actuaries note insurers may choose not to sell individual market plans if there is uncertainty about future enrollment, premium rates, and risk pool profiles. The letter also cautions that eliminating the ACA’s individual mandate, premium subsidies, or cost-sharing subsidies would increase the likelihood of a sicker and costlier risk pool.
• The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) sent a joint letter to Congress and to the President-elect and Vice President-elect reiterating their strong support for protecting coverage. They also called for restoration of reductions in payments for hospitals services embedded in the ACA if the law is repealed without protecting coverage “for those currently receiving such protection.” The letter highlights two reports prepared for AHA and FAH that estimate repeal would result in 22 million people losing coverage by 2026 and net hospital losses of $165.8 billion, even if Medicaid Disproportionate Share Hospital (DSH) payments are restored.
• The American Cancer Society Cancer Action Network called on Congress to not move forward with an ACA repeal without replacement legislation. American Cancer Society Cancer Action Network President Chris Hansen said that delaying enactment of a replacement would leave insurers unable to project risk, which “could lead to the collapse of the individual health insurance market with long-term consequences.”
• The Heritage Foundation published a memo outlining steps Congress could take to repeal the ACA on Inauguration Day, including passing a “one sentence” bill repealing the ACA in full. Another option presented is to use the repeal bill vetoed by President Obama early in 2016 and add language repealing the insurance mandates.
• A new coalition of healthcare, social and economic advocacy organizations, called the Protect Our Care Coalition, issued a statement calling for President-elect Trump and Congress to “stop their reckless sprint to repeal the ACA” and instead present options for improving access to care, affordability, and consumer protections. Coalition members include the Asian and Pacific Islander American Health Forum, Center for American Progress, Center on Budget and Policy Priorities, Center for Community Change, Center for Law and Social Policy, Community Catalyst, Doctors for America, Families USA, MomsRising, NAACP, National Council of La Raza, National Health Law Program, National Latina Institute for Reproductive Health, National Partnership for Women and Families, National Urban League, National Women’s Law Center, SEIU, Voices for Progress, and Young Invincibles.
• The Alliance for Healthcare Security has launched a print and digital ad campaign against ACA repeal without a replacement targeted to Alaska, Arizona, Maine, Nevada, Tennessee and Washington, D.C.. The Alliance is a new coalition and includes 1199SEIU United Healthcare Workers East, Alliance for Retired Americans, American Medical Student Association, American Medical Women’s Association, Center for Medicare Advocacy, Inc., Community Catalyst, Doctors for America, Families USA, Medicare Rights Center, National Medical Association, National Partnership for Women and Families, National Physicians Alliance, Network for Patient Advocacy, Physicians for a National Health Program, Physicians for Social Responsibility, Service Employees International Union, National Committee to Preserve Social Security, and the United Spinal Association.

Healthcare Executives and the AMA Supportive of HHS Secretary Nominee Tom Price

The Healthcare Leadership Council released a statement saying it will “enthusiastically support” Tom Price’s confirmation to be the Secretary of the Department of Health and Human Services. The Healthcare Leadership Council is “a coalition of chief executives from all disciplines within American healthcare.” The American Medical Association also released a statement strongly supporting Price’s nomination.

NEW REPORTS ON IMPLICATIONS OF ACA REPEAL:

Comprehensive White House and HHS Report Highlights ACA Impacts, Consolidates Related Federal Data

A new report and data compilation, released by the White House Council of Economic Advisers and HHS, reviews the economic and coverage implications of the ACA. The report notes a “growing body of evidence” demonstrating the benefits of the ACA both for healthcare coverage and the healthcare system overall. The report highlights estimates that the ACA has resulted in: $3 trillion in reduced deficits over the next two decades; 20 million individuals gaining coverage; an uninsurance rate below 9%; 24,000 deaths avoided per year; and a reduction in average employer-based family premiums of $3,600. The report also highlights the increasing use of alternative payment models in Medicare and by private payers, and notes cost growth is slowing as a result of these reforms. The data compilation includes over 70 of these types of metrics by state that have been updated from previous reports, including: changes in uninsurance rates; impacts on employer and private coverage; Medicaid and Marketplace coverage gains and trends; uncompensated care spending; and Medicare prescription drug benefits and delivery system reforms.

Report Finds Uninsurance Rates Would Double Under ACA Repeal

The number of people without insurance would more than double, from 28.9 million in 2019 to 58.7 million in 2019, if the ACA is partially repealed through reconciliation, according to a new analysis by the Urban Institute. The uninsurance rate would increase from 11% to 21%, higher than it was prior to the ACA. The report compares coverage and federal spending under the ACA to coverage and spending under a previous reconciliation bill that President Obama vetoed in January 2016. Of the 29.8 million people who would lose coverage, 22.5 million people would become uninsured as a result of eliminating the premium tax credits, the Medicaid expansion, and the individual mandate; 7.3 million would lose coverage due to the “near collapse” of the individual market. Federal healthcare spending would be reduced by $109 billion in 2019 and by $1.3 trillion from 2019 to 2028. State spending on Medicaid and CHIP would fall by $76 billion between 2019 and 2028, and reconciliation would add $1.1 trillion in uncompensated care costs for the uninsured. The report also details the demographic characteristics of those who would lose coverage, and provides state-by-state data on uninsurance rates, at-risk Marketplace subsidies, and spending.

Changes in Insurance Rules Could Exclude More Than One-Quarter of Adults From Individual Market Due to Pre-Existing Conditions

An estimated 27%—or 52 million—of adults under the age of 65 have health conditions that would make them “uninsurable” in the individual market under pre-ACA rules, according to a new Kaiser Family Foundation report. Prior to the ACA’s coverage expansions, an estimated 18% of individual market applications were denied due to pre-existing conditions. Both estimates are conservative, according to the report’s authors, because they do not incorporate all conditions that would have been “declinable” pre-ACA and many people with declinable health conditions did not apply for coverage knowing they would be denied. The report includes a list of conditions that would commonly lead to automatic denial of coverage pre-ACA, including alcohol and drug abuse with recent treatment, cancer, Alzheimer’s or dementia, pregnancy or expectant parent, and obesity. The report also discusses other underwriting practices common prior to the ACA, such as premium surcharges, exclusion riders, increased deductibles, and modified benefits.

Billions in Federal Funding to States at Risk Under Medicaid Expansion Repeal, Report Finds

An estimated 11 million Medicaid enrollees, or 14% of the Medicaid population, will lose health coverage if the Medicaid expansion is repealed, and states will lose $79 billion in federal funding, according to a Kaiser Family Foundation report. A second report from the Robert Wood Johnson Foundation and Manatt Health highlights key questions for states regarding the implications of expansion repeal. The report notes that federal dollars committed to financing the Medicaid expansion would be at risk under repeal, and that Congress may need to raise taxes, increase the debt, or cut spending on other programs to later restore repealed funding for states.

CBO Includes Medicaid Spending Caps Among Options for Reducing the Federal Deficit

The Congressional Budget Office’s latest report on options for reducing the federal deficit over the next decade includes 18 health-related spending and revenue options, including caps on federal Medicaid spending. While the report notes that Medicaid spending caps could generate federal savings and make federal Medicaid costs more predictable, they would also create uncertainty for state budgets and potentially shift new and substantial costs to states. CBO also notes that, depending on the caps’ structure, federal Medicaid funding may not increase during economic downturns when Medicaid enrollment increases. Other options covered include changing Medicare cost-sharing rules and restricting Medigap insurance, and reducing tax preferences for employment-based insurance.

Low-Income Working Parents Increasingly Insure Children Through Medicaid and CHIP, Report Finds

Low-income parents with access to employer-sponsored insurance are increasingly enrolling their children in Medicaid and CHIP, according to a new Health Affairs study. The study reviewed child coverage among families with incomes between 100% and 400% of FPL, and found that the proportion of these children enrolled in public insurance increased from 12.1% in 2008 to 15.2% in 2013. The trend was most pronounced for children in families with incomes between 100% and 199% of FPL, in which nearly one-third of children were insured by CHIP or Medicaid in 2013, a 31% increase from 2008. The study also found the uninsured rate among children in families with incomes between 200% and 299% of FPL increased from 6% in 2008 to 9.2% in 2013. The authors conclude with a series of policy recommendations to ensure continued coverage of children, including renewing CHIP funding and the “Maintenance of Effort” requirement, which prevents states from cutting eligibility levels for children in Medicaid and CHIP.

NEW ELECTION REACTIONS IN THE STATES:

California: New State Attorney General Notes Focus on Health Reform

California’s next presumptive Attorney General, Congressman Xavier Becerra (D), cited protecting the State’s interests under the ACA as a top priority in his new role, in an interview with reporters. Governor Jerry Brown (D) selected Representative Becerra for the position and will submit his official nomination to the State Assembly and Senate for confirmation in January. Becerra will replace current Attorney General Kamala Harris (D), who was elected to fill outgoing Senator Barbara Boxer’s (D) Senate seat. Prior to his nomination, Becerra represented Los Angeles in the House of Representatives and previously served in the State Assembly.

New Jersey: Governor Anticipates State Flexibility on Medicaid

Governor Chris Christie (R) anticipates he and other Governors will have greater flexibility in their Medicaid programs, including which services to cover, after speaking with President-elect Donald Trump, reports NorthJersey.com. The Governor’s remarks came during a tour of a local drug treatment center and a roundtable discussion with staff.

Wyoming: Governor Halts Medicaid Expansion Efforts

Governor Matt Mead (R) announced he will no longer pursue Medicaid expansion in light of the Presidential election, according to the Casper Star Tribune. Governor Mead has long supported Medicaid expansion for Wyoming, but the State's Republican-controlled Legislature has rejected expansion bills multiple times. Although the Governor opposed the ACA when it was passed, he has supported expansion because of the federal dollars it would bring to the State.

STATE MEDICAID REFORM AND EXPANSION NEWS:

Arkansas: CMS Approves Five-Year Extension of Medicaid Expansion Waiver

CMS approved the State’s 1115 waiver extension to implement Arkansas Works, which will continue providing coverage through qualified health plan (QHP) premium assistance, while implementing a new employer-sponsored insurance (ESI) premium assistance program for enrollees who have access to cost-effective ESI through a participating employer. The demonstration will also require premiums for beneficiaries with incomes above 100% of FPL, establish an incentive benefit to encourage premium payment and healthy behaviors, refer enrollees to work and work training opportunities, and waive retroactive eligibility on the condition that the State eliminate a backlog of Medicaid cases and implement hospital presumptive eligibility. Arkansas Works will take effect January 2017.

Louisiana: Automatic Pre-Release Inmate Medicaid Enrollment Program to Launch January 1

Seven state prisons will begin automatically enrolling prisoners in Medicaid in preparation for their release, beginning on January 1, according to Department of Corrections and Department of Health officials, quoted in media coverage. The program will use an automated file transfer program to enroll prisoners, link them to a managed care plan, and connect high-need prisoners to care management prior to release. The State has been developing the program since June 2016, in concert with roll out of the Medicaid expansion. The initiative is expected to expand to locally-operated facilities in subsequent phases.

New York: 1115 Medicaid Waiver Extended to 2021

CMS has approved New York's request to extend its Medicaid Section 1115 waiver through March 31, 2021, in the process renaming the demonstration the "New York Medicaid Redesign Team Section 1115 Demonstration" to emphasize the State's collaborative Medicaid reform efforts to date. New York’s 1115 waiver was first approved in 1997 to transition most Medicaid recipients to managed care. CMS has since granted several waiver extensions and re-approvals, most recently to implement New York's Delivery System Reform Incentive Payment (DSRIP) program.

West Virginia: State Submits SUD Delivery System 1115 Waiver Application to CMS

In an effort to combat its growing opiate addiction crisis, the State applied for a new 1115 Medicaid waiver designed to promote access and coordination of substance use disorder (SUD) services, including: expanding the number of community-based and outpatient SUD providers; offering residential SUD treatment and supportive housing arrangements; and increasing the availability of Medication-Assisted Treatment (MAT), which combines the use of medications and behavioral therapy for the treatment of substance abuse disorders. To support these reforms, the State requested a waiver of the institutions for mental disease (IMD) exclusion, which prohibits the use of federal funds for residential treatment facilities. Under the State’s plan, Medicaid Managed Care Organizations (MCOs) would be required to contract with SUD service providers, conduct provider recruitment and credentialing activities, and ensure network adequacy. Upon CMS approval of the waiver, the State plans to conduct a six-month planning period with MCOs before the program launches in January 2018.

Virginia: Legislative Oversight Committee Releases Report on Medicaid Savings

A report released by Virginia’s Joint Legislative Audit and Review Commission identified potential areas of cost-savings in Virginia’s Medicaid program, and identified 35 recommendations to manage State spending. The report notes that while State Medicaid spending has increased, per enrollee spending has remained flat, after adjusting for inflation. Areas of potential cost-savings include increased cost-controls to Virginia’s Medicaid managed care organizations and long-term services and support programs.

STATE MARKETPLACE NEWS:

Maryland: CO-OP Will Not Issue or Renew Individual Market Plans in 2017

Evergreen Health Cooperative, one of the few remaining CO-OPs established under the ACA, will not issue or renew individual plans for 2017, either on or off of the Marketplace, after the CO-OP and the State Department of Insurance were unable to resolve the CO-OP’s financial troubles. Current Evergreen enrollees for 2016 that purchased a plan through the Marketplace can choose an alternative plan for 2017, or will be automatically renewed into the most similar plan available. This decision will not affect group policies offered by Evergreen, which will remain in effect until the policy renewal date.

Pennsylvania: State Unveils New Health Plan Comparison Tool, Pushes Marketplace Enrollment

The Insurance Department released a new website for consumers to compare plans available on and off of HealthCare.gov and encouraged State residents to enroll in 2017 coverage despite the uncertain future of the ACA. The new plan comparison tool allows consumers to compare plans based on: estimated average monthly and yearly total cost; cost of the plan in a high-use year; overall plan quality; network breadth; and the prescription drug formulary. The tool also estimates the amount of premium tax subsidies available to enrollees. Individuals still need to enroll through HealthCare.gov for a Marketplace plan or through an insurance company or broker for an off-Marketplace plan.

STATE STAFFING UPDATE:

Vermont: Green Mountain Care Board Chairman Appointed as Secretary of Human Services

Governor-elect Phil Scott (R) appointed Green Mountain Care Board chair Al Gobeille to head the State’s Agency of Human Services, which includes the Department of Health, Department of Corrections, Department of Aging and Independent Living, and the Department of Vermont Health Access. Gobeille will replace current Governor Peter Shumlin’s (D) appointee, Hal Cohen, when the new administration takes office in January. At the Green Mountain Care Board, Gobeille was responsible for quality improvement and cost control efforts related to the State’s all-payer healthcare model.