Manatt on Health Reform: Weekly Highlights

Although the official February 15th enrollment deadline has now passed, the 2015 open enrollment period isn’t over for the Federally-facilitated Marketplace (FFM) and many State-based Marketplaces (SBMs).While the FFM announced a one-week extension, ten SBMs offered extensions, mostly ranging from a few days to two weeks, though Washington and Minnesota announced Special Enrollment Periods into April, targeting people who discover a penalty for being uninsured when they file taxes. In Medicaid expansion news, a report in Kentucky finds a substantial net positive fiscal impact on the State, while Kansas and Utah legislators move expansion bills forward.


ACA’s Second Enrollment Period Closes; Deadlines Widely Extended

On February 17, HHS Secretary Burwell announced that 11.4 million people signed up or re-enrolled through state and federal Marketplaces after the final and largest traffic surge on HHS’ announcement of a one-week special enrollment period for individuals who experienced technical difficulties applying came after the IRS income verification function experienced a glitch over the weekend, causing a site outage on for several hours, according to USA Today. Ten State-based Marketplaces have also extended their enrollment deadlines, including Washington State and Minnesota, which instituted extensions into April in consideration of those who become aware when they file taxes of the penalty for being uninsured.

Marketplace Coverage Will End in February for 200,000 People with Unresolved Citizenship/Immigration Status

Approximately 200,000 people who have not confirmed their citizenship and immigration status for their 2014 Marketplace coverage are receiving notice that their coverage will terminate at the end of February, according to CMS. The Agency said it has conducted several outreach attempts to reconcile the individuals' missing documentation and confirm their citizenship or immigration status to no avail. While for most applicants citizenship and immigration status is matched against federal databases, if the information in the database is insufficient, applicants must provide documentation to verify their status within 90 days of request. Some advocates argue that failure to respond may be due to the complexity of the federal requests for documentation, as well as to technical difficulties transferring and storing the submitted documentation. Last year, 112,000 people lost coverage under similar circumstances.

Cost-Sharing Reductions Provide Savings for Lowest Income Enrollees in the Federal Marketplace, According to New Study

A new brief describing average cost-sharing reductions for low-income enrollees in silver health plans on the Federally-Facilitated Marketplace finds that individuals in the lowest income tier (150% FPL and under) receiving the maximum cost-sharing assistance save an average $2,300 on annual deductibles, paying $229 compared with $2,559 for a silver plan with no cost-sharing reductions. Similarly, the Kaiser Family Foundation report finds that the average out-of-pocket limit for individuals receiving maximum cost sharing assistance is $879 compared to $5,824 for standard silver plan (saving nearly $5,000 on average). The authors note that individuals who receive this assistance are at risk of losing their cost-sharing reductions, along with tax credits, as the legality of the subsidies on the Federal Marketplace is being tried in the King v. Burwell Supreme Court case.

GAO Report Identifies 32 High Risk Areas, Citing as IT Example

In its biennial update on federal operations with high vulnerabilities to fraud, waste, abuse, and mismanagement, or that are in need of transformation to address economy, efficiency, or effectiveness challenges, the Government Accountability Office (GAO) identified two new high risk areas since its 2013 report, including “Improving the Management of Information Technology (IT) Acquisitions and Operations.” was called out as an example of an IT initiative with room for improvement, and GAO says it will issue the results of an ongoing review of the website early this year. Medicare, Medicaid, and improper payments by both were all listed as high risk areas, as they were in 2013. The study cites the size and scope of both Medicare and Medicaid as challenges, and identifies the need for CMS to work with states to identify and collect improper Medicaid payments as enrollment increases and more Medicaid beneficiaries receive services under managed care and/or private insurance through the implementation of the ACA.


Arkansas: hCentive Receives $7.2 Million Contract to Implement SHOP Marketplace

The Arkansas Health Insurance Marketplace Board selected hCentive as its vendor to implement the technology for its State-based Small Business Health Options Program (SHOP) Marketplace for coverage beginning in plan year 2016, according to the Arkansas Democrat-Gazette. hCentive will be awarded a $7.2 million contract to run through February 2018.

Florida: Federal Funding for Hospitals Treating the Uninsured Uncertain, Spurring Medicaid Expansion Debate

Florida's Low Income Pool (LIP) funding, which reimburses hospitals that treat large numbers of poor and uninsured patients, is set to expire at the end of June and, according to a CMS official, is unlikely to be renewed “in its present form.” Non-renewal of that funding would create a $1.3 billion shortfall in Governor Rick Scott's (R) budget, which currently assumes receipt of the federal matching funds. Florida legislators are in negotiations with CMS administrators and are discussing back-up plans. The recent CMS announcement has spurred criticism from State Democrats regarding the Governor’s and Republican Legislature’s refusal to expand Medicaid, which State analysis estimated could bring $51 billion to Florida over ten years.

Kansas: House Committee Introduces Expansion Bill Utilizing Existing Managed Care Infrastructure

After hearing weeks of testimony from various stakeholders, the House Vision 2020 Committee introduced House Bill 2270 to expand Medicaid to new adults with incomes less than 138% of the federal poverty level through the managed care organizations that currently operate KanCare, the State’s Medicaid program. The bill, which is “as Kansas as the committee can make it” according to the Chair, would also institute work requirements, provider fees to cover the State costs of the program, and a sliding scale of co-payments and premiums. Should the expansion bill be passed in the House and Senate to ultimately receive the Governor’s signature, the plan would require federal approval.

Kentucky: Report Reveals Positive Economic and Social Impact of Medicaid Expansion, Projects $919 Million and 40,000 Jobs by 2021

A new report on the impact of Kentucky's Medicaid expansion, commissioned by the Cabinet for Health and Family Services, finds that the State’s economy realized $1.16 billion in additional revenue during the first year of expansion, and projects that by Fiscal Year 2021, Medicaid expansion will have a $919.1 million positive net fiscal impact on the State economy and add 40,000 jobs. More than 310,000 Kentuckians have enrolled in the expanded Medicaid program, exceeding expectations and leading to the second largest decrease in uninsurance of any U.S. state in the first half of 2014. According to the analysis, new enrollees are accessing preventive services and uncompensated care charges have decreased by $1.15 billion.

Massachusetts: Newly-Elected Governor Transitions Leadership of Marketplace Board to Health Secretary

Governor Charlie Baker (R) made a series of changes to the structure of the Health Connector Board, naming Health and Human Services Secretary Marylou Sudders as the board chairman and announcing that he will soon file legislation to make the position the permanent chair of the board, according to the Boston Herald. Governor Baker also shifted Administration and Finance Secretary Kristen Lepore, whose position has traditionally chaired the board, to be a member of the board, filling a seat reserved for the head of MassHealth or their designee. These changes ensure that two of the 11-member board are from the Governor’s Cabinet.

Minnesota: Marketplace Announces Special Enrollment Period, March 1-April 30

After extending open enrollment until February 20 for those who began their applications but were unable to finish by the February 15 deadline, MNsure announced that it will additionally hold a special enrollment period from March 1 to April 30 for people who “are required to pay a penalty for being uninsured in 2014 as they file their tax return.” Minnesota is the second state, after Washington, to offer an extension past the tax filing deadline, ensuring these individuals have the opportunity to enroll in 2015 coverage thereby minimizing or eliminating their tax penalty when they file their 2015 taxes.

Nebraska: Governor Selects New Medicaid Director

Governor Pete Ricketts (R) has selected Calder Lynch as the Director of Nebraska’s Division of Medicaid and Long-Term Care, filling a position that had been vacant since the passing of the former Medicaid Director in April, according to the Lincoln Journal Star. Lynch was previously a Chief of Staff at the Louisiana Department of Health and Hospitals and will begin serving in early March, subject to legislative approval.

Utah: Governor's Medicaid Expansion Plan Advances in Legislature

The Utah Senate Health and Human Services Committee voted 4-1 to approve SB164, which would enact Governor Gary Herbert's (R) alternative Medicaid expansion plan, Healthy Utah. The Governor's plan has been negotiated over several months with the Obama administration and would cover an estimated 95,000 Utahns up to 138% of the federal poverty level through subsidized qualified health plans on the State’s Small Business Health Options (SHOP) Marketplace. The subcommittee vote to recommend SB164 came after Senate Republicans left a closed-door caucus on Medicaid expansion the day before without reaching a decision. The bill was sponsored by Senator Brian Shiozawa (R), an emergency medicine physician, and will now be considered by the full Senate during this current general legislative session. Passage by the Senate and House will be required for the bill to reach the Governor for signature.

Virginia: Medicaid Expansion Fails Again in House and Senate

The House and Senate voted to remove Governor Terry McAuliffe's (D) provision for Medicaid expansion in their amendments to the State budget, eliminating any likelihood for expansion’s passage this year. The Governor did not address the removal in his reaction to the amendments.

Washington: Exchange Announces Special Enrollment Period through Mid-April

While several states have extended their 2015 open enrollment periods by approximately a week due to inclement weather and temporary system glitches, Richard Onizuka, CEO of the Washington Health Benefit Exchange, announced a two-month special enrollment period (SEP), running from February 17 to April 17, for those “who may become aware of the tax penalty for not having health insurance under the Affordable Care Act when they file their annual tax return this year” as well as for individuals who have started the application but experienced technical barriers to enrollment. . Individuals under the SEP applying for 2015 coverage online must call the Customer Support Center to request a special enrollment, and must both select a qualified health plan and submit payment by the April 17 deadline. While previously uninsured individuals who enroll during the SEP will have to pay the tax penalty for being uninsured in 2014, successful enrollment for 2015 coverage during the SEP will minimize or eliminate their penalty when they file their 2015 taxes.



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