Manatt on Health Reform: Weekly Highlights

Tom Price is confirmed as the new head of Health and Human Services; Georgia and Missouri legislatures call for new Medicaid waivers to implement capped funding; and the uninsurance rate hits a new low in 2016.

FEDERAL HEALTH REFORM ACTIVITY:

Tom Price Confirmed as Secretary of Health and Human Services

Tom Price was confirmed by the Senate as Secretary of Health Human Services early Friday morning, February 10 by a 52 to 47, party-line vote. As a member of Congress, Dr. Price called for repealing and replacing the ACA as well as shifting Medicaid financing to a block grant structure. Executive action on healthcare is expected to accelerate in the coming days with Secretary Price's confirmation.

Uninsured Rate Continues to Decrease

New National Health Interview Survey data found the uninsured rate declined to 8.8% in the first three quarters of 2016, down slightly from 9.1% in 2015. Medicaid expansion states saw a drop in the adult uninsured rate from 9.8% in 2015 to 9.3%, while the uninsured rate held constant at 17.5% in non-expansion states. The adult uninsured rate dropped in states with State-based Marketplaces from 9.4% in 2015 to 8.6%, but remained nearly flat at 15.5% in HealthCare.gov states. National Health Interview Survey data is released quarterly.

ACA Promotes Coverage Gains and Improved Insurance Retention

The ACA improved retention in public insurance, but did not result in people dropping private coverage for public coverage ("crowd out"), according to a new study published in Health Affairs. In addition, increasing numbers of people transitioned to employer-sponsored insurance (ESI) plans after 2014, strengthening the pre-ACA ESI system. The study found, however, that older people were more likely to enroll in non-group coverage (like ACA Marketplace coverage), and recommends policymakers focus on increasing enrollment of younger people in the non-group market.

STATE HEALTH REFORM NEWS:

Arizona: ACA Repeal Would Eliminate $5 Billion and 62,000 Jobs from State Economy

Full repeal of federal ACA funding would lead to the loss of $5 billion in the Arizona economy and 62,000 jobs in 2018, according to an Arizona State University report commissioned by the Children's Action Alliance. The loss of jobs, including over 29,000 in the healthcare sector, would also reduce personal income by $3.5 billion.

California: State Finds Inaccurate Health Plan Data on Access, Considers Disciplinary Action

The Department of Managed Health Care (DMHC) was unable to assess health plan compliance with timely access standards because 90% of required compliance reports contained one or more "significant data inaccuracies." DMHC will hold an all-stakeholder meeting to discuss corrective steps for health plans and "possible disciplinary action."

Rhode Island: Senate Hearing Focuses on Impacts of ACA Repeal

In a joint Senate hearing, Zachary Sherman, Director of HealthSource RI, cautioned that the State would lose $102 million in federal tax credits to cover 30,000 individuals in the Marketplace under ACA repeal. Insurance Commissioner Kathleen Hittner also noted that although State law prohibits insurance denials for residents with pre-existing conditions, the State will not be able to maintain current levels of coverage for individuals on the Marketplace without federal funding for subsidies and tax credits.

FEDERAL AND STATE MEDICAID REFORM ACTIVITY:

Trade Association Highlights Financial Impact of ACA Repeal on Safety Net Hospitals

America's Essential Hospitals, a national trade association representing safety net hospitals, released a policy brief that estimates its 300 member hospitals would lose approximately $40.5 billion through 2026 if Congress repeals the ACA without replacement or restoration of Medicaid Disproportionate Share Hospital (DSH) payments. The policy brief, which draws on estimates from a report prepared for the American Hospital Association, urges policymakers to pair any repeal of the ACA with a replacement plan and to maintain coverage levels during the transition to a replacement plan.

Georgia: Resolution Would Ask Governor to Apply for Medicaid Waiver Capping Funding

State Representative Brad Raffensperger (R) introduced a resolution urging Governor Nathan Deal (R) to seek a Section 1115 waiver to pursue "per capita block grant" funding for Medicaid coverage for "indigent health care." The resolution, which currently has six co-sponsors, cites growing costs and the willingness of the Trump Administration to consider block grants as reasons for seeking such a waiver. The Georgia House Appropriations Committee is currently reviewing the resolution.

Vermont: State Announces Launch of Medicaid ACO Pilot Program

Governor Phil Scott (R) recently unveiled a one-year Medicaid ACO pilot program in which the State will contract with OneCare Vermont—a statewide all-payer ACO—to provide care to 30,000 Medicaid beneficiaries under a "next generation" ACO payment model, which will include both upside and downside risk. The pilot is a first step in transitioning providers to a global budget in 2017 through the State's recently-approved all-payer model.

Missouri: Bill Would Require State to Apply for Waiver With Medicaid Work Requirements, Cost-Sharing, and Capped Funding

State Senator David Sater (R) has introduced a bill requiring the State to apply for a waiver to implement new Medicaid eligibility criteria, such as work requirements, health savings accounts, and cost-sharing, and to cap Medicaid funding in a way "similar to a federally-capped block grant." Under the bill, capped funding could be adjusted for Medicaid population growth, natural disasters, and economic downturns. The bill recently passed out of committee.

FEDERAL MARKETPLACE UPDATES:

More State-Based Marketplaces Release 2017 Open Enrollment Numbers

Additional states have released enrollment statistics for the 2017 open enrollment period that ended on January 31.

  • Connecticut. Approximately 112,000 consumers selected a 2017 plan through Connecticut's Access Health CT, a 3.9% decrese from 2016.
  • Minnesota. More than 117,000 Minnesotans selected a 2017 plan through MNsure, a 34% increase from last year. MNsure announced a one-week special enrollment period to give consumers more time to enroll in response to the State Legislature's recently passed premium relief bill, which reduces premiums for individual market consumers who do not qualify for ACA tax subsidies by 25%.
  • Washington. More than 225,000 individuals enrolled in coverage through the Healthplanfinder during open enrollment, a 13% increase over 2016.

Total Cost of Care Estimators Provide Value to Consumers During Plan Selection

A Commonwealth Fund issue brief finds that tools allowing consumers to estimate total out-of-pocket costs associated with a Marketplace plan are a "critical" component of the enrollment process and improve the consumer-friendly shopping experience. The issue brief, which is based on interviews with 40 Marketplace officials, enrollment assisters, technology vendors, and other stakeholders, notes that individuals designing total cost estimator tools must balance accuracy and ease of use when developing the type and number of inputs used in the tool. Only five State-based Marketplaces do not currently provide total cost estimators for consumers.

Marketplace Competition and Premium Rates Vary Across Five States

A Brookings Institute report found that California and Michigan experienced more robust Marketplace competition than Florida, North Carolina, and Texas, with all five states experiencing lower premium prices in urban areas due to stronger hospital and physician competition. The authors, who interviewed state regulators, health providers, insurers, consumer advocates, and insurance brokers across all five states, report that some issuers faced claims costs that were 50% to 100% higher than premiums, which led to higher premium costs and market destabilization.