Manatt on Health Reform: Weekly Highlights

The uninsurance rate for U.S. adults dips to 11.9%, national health expenditures come in below estimates and Medicaid expansion appears imminent in Montana.

FEDERAL NEWS:

Uninsurance Rate Down to 11.9% in First Quarter of 2015

The uninsurance rate among U.S. adults decreased to 11.9% in the initial months of 2015, according to a recent Gallup poll, down 6.1 percentage points since its peak in the third quarter of 2013, before the Affordable Care Act went into effect. The most recent drop since the conclusion of the second open enrollment period is less dramatic than what was seen after the first open enrollment period, but continues the trend toward overall reduction in the number of uninsured. The percentage of adults covered by self-funded plans, including individual plans sold through a Marketplace, has increased by 3.5 percentage points, to 21.1%, since the end of 2013. Additionally, the percentage of adults covered by Medicaid has increased by 2.1 percentage points, to 9.0%, since the end of 2013.

National Health Expenditures Estimated to Cost $2.5 Trillion Less than Previously Expected

National health expenditures (NHE) by all public and private payers between 2014-2019 are now estimated at $2.5 trillion less than CMS’ 2010 estimates, according to a new report by the Urban Institute. The report attributes the lower projections to the recent recession, growth of high deductible health plans, cost constraints within state Medicaid programs, and other policies related to the ACA that caused NHE to grow at an average annual rate of only 3.9% between 2009-2013.

Awaiting King v. Burwell Decision, Some States Change Rules for Insurers

Some states are allowing health insurers to submit two sets of proposed 2016 premium rates—one for each potential outcome from the SCOTUS ruling, reports Politico Pro. Insurance premiums are expected to rise significantly if the Court rules to eliminate subsidies for Marketplace enrollees in the 34 states that use HealthCare.gov, since many of the healthiest enrollees will likely drop coverage, leaving sicker, higher-cost enrollees in the risk pool. So far, Alaska told insurers they should submit two sets of premiums, and Indiana, Nebraska, North Dakota, and Texas said they will review two options. Some states, including Louisiana, Arizona, Montana, Utah, New Hampshire, and North Carolina, have said they will not review two rates.

STATE MEDICAID EXPANSION ACTIVITY:

Montana: Medicaid Expansion Remains Viable

A bipartisan Medicaid expansion bill was passed by the House this week after previous endorsement in the Senate. The bill was initially blocked by House Republicans after its first reading in the House; however, House Democrats employed a legislative measure called the "silver bullet" to bring the bill to the House floor for a second and third reading, where it was approved. The Senate must reconcile one funding amendment, generally seen as minor and uncontroversial, and then send the bill to Governor Steve Bullock who is expected to sign it into law.

Nebraska: Medicaid Expansion Proposal Defeated in the Legislature

For the third time this year, a proposal to expand Medicaid in Nebraska was defeated in the State Legislature when lawmakers voted 28-16 in opposition to the Medicaid Redesign Act (LB472), effectively preventing the bill from being heard again this year. Introduced by Senator Kathy Campbell (R) in late February, the legislation would have required the state to seek federal authority to purchase private coverage with Medicaid funding and include healthy behavior incentives as part of coverage. The bill faced opposition within the Legislature over past several weeks, as well as public opposition from Governor Pete Ricketts (R).

STATE MARKETPLACE UPDATE:

Vermont: State Officials Explore Regional Partnership Options for Marketplace

Lieutenant Governor Phil Scott (R) and several senators met with Connecticut officials to explore opportunities for collaboration between the ailing Vermont Health Connect (VHC) and the Connecticut Marketplace – Access Health CT. Officials from both states expressed interest in the savings that would result from sharing successful components of Access Health CT, such as the Small Business Health Options Program (SHOP) Marketplace interface—which Vermont has yet to build—and bidding together on a call center, reports the VT Digger. These efforts are in response to Governor Peter Shumlin’s (D) recent announcement that he will support transitioning VHC to a Supported State Based Marketplace Model in November should VHC fail to become fully functional ahead of the 2016 open enrollment period.

MORE STATE HEALTH NEWS:

Alabama: Governor Assembles Health Care Improvement Task Force

Governor Robert Bentley (R) issued an executive order to create the Alabama Health Care Improvement Task Force, whose primary goal is to "recommend to the Governor ways to improve the health of Alabamians, including strategies to have more accessible and more affordable health care in the state." Alabama's State Health Officer Dr. Don Williamson was selected to chair the task force, which is comprised of thirty-seven health care experts and professionals. The task force will convene for its first meeting on April 15.

Michigan: Governor Selects New Director of Insurance & Financial Services

Governor Rick Snyder (R) appointed Pat McPharlin, who served as CEO of the Michigan State University Federal Credit Union for the past 14 years, as Michigan’s Director of the Department of Insurance & Financial Services. Subject to State Senate approval, McPharlin will begin his service on May 18.

Missouri: State Law Restrictions on Navigators Struck Down by Federal Appeals Court

Part of a 2013 state law prohibiting health insurance navigators from “giving advice” to consumers on health plans was struck down by a federal appeals court. The court agreed with opponents of the law who argued that it would have prevented navigators from helping consumers to identify and enroll in a health plan, as intended by the Affordable Care Act, and was therefore pre-empted by the federal law. This ruling is specific to the law in Missouri but could have implications for other states with similar statutes.

Virginia: Eligibility for Behavioral Health Services under Governor's Plan Restricted in State Budget

Recently passed amendments to Virginia’s biennial State budget revised eligibility levels for the “Governor's Access Plan” (GAP), part of Governor Terry McAuliffe's (D) ten-step “A Healthy Virginia” plan, which was championed by the Governor after the State legislature did not approve Medicaid expansion last summer. GAP was approved by CMS in January as part of an 1115 waiver and provides basic medical care and targeted behavioral health services to individuals with serious mental illness up to 100% of the federal poverty level (FPL). Changes in the State budget restrict eligibility to individuals up to 60% FPL, but maintain coverage for those between 61% and 100% FPL who are currently accessing services until eligibility is reassessed on July 1, 2016.

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