Manatt on Health Reform: Weekly Highlights

CMS offers a special enrollment period for enrollees whose incomes were miscalculated due to system error; California Marketplace announces two new insurers; and Connecticut’s budget reduces eligibility levels for Medicaid parents.


CMS Announces New Fast Track Review for 1115 Waiver Extensions

CMS announced a new process to "fast track" states’ requests to extend established Medicaid and CHIP section 1115 demonstrations, available for states that can demonstrate progress towards achieving the demonstration’s objectives and are not requesting substantial changes. Demonstration programs that involve "complex policy areas," including Medicaid expansion tied to enhanced Federal Medical Assistance Percentage (FMAP) and Delivery System Reform Incentive Payment (DSRIP), are not eligible. The timeframe for review will be comparable to what CMS uses for approving Medicaid section 1915 waivers or state plan amendments.

CMS Releases Resources on 1332 Waivers

CMS' Center for Consumer Information and Insurance Oversight (CCIIO) released resources dedicated to the 1332 State Innovation Waiver Application Process that clarify the process for states to submit an application. Section 1332 of the ACA allows states to waive certain statutory requirements to provide access to healthcare coverage through innovative approaches that are at least as comprehensive and affordable as under ACA requirements.


CMS Offers Special Enrollment Period to Correct Income Counting Error

CMS is offering a special enrollment period (SEP) for those enrollees whose household incomes were incorrectly inflated during the last open enrollment period because the system erroneously counted dependents’ social security incomes, reports While the error in the eligibility determination system was fixed on April 17, 2015, it may have resulted in enrollees being incorrectly determined ineligible for Marketplace subsidies or eligible for lower subsidies than they should have been. In states that have not expanded Medicaid, correcting this error might lead enrollees to lose subsidies, if the corrected income falls below 100% of the federal poverty level and above the state’s Medicaid eligibility levels. CMS will reach out to affected consumers to ask them to update their applications and to notify them that they may be able to make changes retroactive to their original coverage date, as early as January 1, 2015.

CMS Encourages Insurance Commissioners to Keep Premiums Affordable

CMS’ CEO for Health Insurance Marketplaces, Kevin Counihan, sent a letter to state insurance commissioners encouraging them to ensure that coverage remains accessible and affordable as they determine final premium rates for 2016. As a result of conversations with issuers and state officials to ascertain drivers of premium increases, Couinhan noted that commissioners should consider: claims data indicating recent enrollees are healthier than enrollees who shopped during the first open enrollment period; the moderate trends in overall medical costs in 2015; CMS’ 100% coinsurance rate for 2014 reinsurance; and, that risk corridor collections are anticipated to be sufficient for all 2014 payments. CMS is advising states to hold public hearings to ensure rates receive appropriate public scrutiny.

IRS Report Finds One-Third of Tax Credit Recipients Have Not Reconciled

An Internal Revenue Service (IRS) report on the 2014 tax filing season revealed that, as of May 2015, roughly two-thirds of the 4.8 million filers who should have filed the form to reconcile their premium tax credits or to potentially receive a credit at tax filing time have done so. The remainder should do so as quickly as possible to retain their potential eligibility for premium tax credits in the upcoming open enrollment system. Of the 3.2 million taxpayers who have reconciled, approximately 40% were refunded an average of $600 and 50% repaid an average of $800. While a total of 12 million taxpayers claimed an exemption from the shared responsibility payment, approximately 7.5 million taxpayers paid the tax. The average amount owed was $200, and the majority of taxpayers (85%) who paid the individual shared responsibility payment still received a net refund.


Higher-Than-Expected Enrollment in Some Expansion States

Medicaid expansion enrollment was significantly higher than expected in more than a dozen states, reports the Associated Press, with possible contributing factors including high demand and successful outreach efforts. States that enrolled more expansion adults than initially projected include Arizona, California, Colorado, Illinois, Kentucky, Maryland, Michigan, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, and Oregon. Some states have revised their Medicaid budget estimates due to the higher enrollment, according to the AP, though many states also experienced budget savings and gains as a result of shifting some people to Medicaid from fully state-funded programs, increased revenue from insurer and provider taxes, and a reduction of uncompensated care, as reported in two Manatt/Robert Wood Johnson analyses.

Michigan: Access to Doctors Increases after Medicaid Expansion

A Health Affairs University of Michigan study that examined primary care appointment availability for new patients before and after implementation of the State’s Medicaid expansion indicated that Medicaid recipients experienced increased access to primary care providers, while enrollees in private insurance experienced decreased access. Appointment availability for new patients with Medicaid increased by 6 percentage points following Medicaid expansion, while availability decreased by 2 percentage points for the privately insured. The study noted that Michigan’s Medicaid expansion requires enrollees to be seen by a primary care provider within 60-90 days of enrollment and called for further research to determine if this pattern is occurring in other states and whether it will persist over time.


California: Marketplace Announces Two New Issuers and Modest Rate Increases for 2016

Covered California announced that United Healthcare and Oscar Health Plan of California will begin offering Qualified Health Plans (QHP) for the first time in select regions during the 2016 Open Enrollment Period in addition to tentative 2016 QHP premium rates. The statewide weighted average premium rate will increase by 4% for 2016, compared to 4.2% during the previous year, which Kevin Counihan, the CMS CEO of Health Insurance Marketplaces, said “demonstrates that the Affordable Care Act is working as intended to spur competition and transparency in the Marketplaces…”. The tentative rates are subject to a 60-day public comment period and final approval by state regulators.

Louisiana: Co-Op Leaving Marketplace at End of 2015

The Louisiana Health Cooperative, Inc. (LAHC) announced that it will no longer participate in the State’s Marketplace for the 2016 open enrollment period (OEP) and will end coverage for its nearly 17,000 current members at the end of 2015 due to financial unsustainability. LAHC had requested a 23% rate increase for OEP 2016, citing a medical loss ratio of 113% and a sicker than expected membership. LAHC is the second of 23 insurance co-ops established and supported by the ACA to end operations due to financial difficulties, following CoOportunity Health's closure in Iowa and Nebraska this February.


Connecticut: Budget Reduces Eligibility Levels for Medicaid Parents

Connecticut's new two year budget, which took effect on July 1st, reduced income eligibility for Medicaid parents and relative caregivers from 201% of the federal poverty level (FPL) to 155% FPL. This change impacts nearly 1,300 enrollees, who will become ineligible for the program starting September 1. In anticipation of the reduction in eligibility, Access Health CT, the State's health insurance Marketplace, has been meeting with insurance brokers, community health centers and other stakeholders to ensure they are prepared to help these individuals enroll in the marketplace and not face a gap in coverage. The State is also planning to reach out through letters and phone calls to notify consumers about their Access CT options.

Illinois: State Ordered to Continue Medicaid Payments Despite Budget Standoff

A federal judge ruled late last week that participating Medicaid Cook County healthcare providers must be paid for services immediately, even as the State government remains shut down after the legislature and the Governor failed to agree on a strategy for balancing the budget earlier this month. The lawsuit, brought by the Sargent Shriver National Center on Poverty Law on behalf of Cook County children, contended that failure to pay providers could lead to denial of care for children covered under a 2005 consent decree that obligates Cook County to comply with the federal requirements to insure Medicaid children. The ruling may have statewide implications for Medicaid payments.

Massachusetts: Medicaid Redetermination Process Notifies More Than Half a Million of Need to Reapply

As Massachusetts conducts its first Medicaid eligibility redeterminations since 2013, the Associated Press reports that more than 500,000 beneficiaries were notified of the need to reapply for benefits. Of those who have responded and been processed by the State, 78% (approximately 293,000 individuals) remained eligible. Around 116,000 individuals have yet to respond to multiple notifications and, if they fail to complete the redetermination process, their coverage will end. The redeterminations were estimated to save nearly $200 million and were included in the most recent state budget. Final figures are expected from the State on August 1.

Rhode Island: Governor Establishes Working Group for Healthcare Innovation

Governor Gina Raimondo (D) issued an Executive Order establishing a working group tasked with lowering costs for publicly and privately funded healthcare, improving care quality and health outcomes, coordinating existing reform initiatives, and expanding those initiatives into privately funded healthcare. Members of the working group will be appointed by the Governor and will build on the recommendations made by the state’s Working Group to Reinvent Medicaid. Specific deliverables include a proposed spending cap for publicly and privately funded healthcare, guidance on achieving value-based payments at a rate of 80% of all healthcare spending by 2018, recommendations for establishing a next-generation health IT system, and developing a plan to meet the population health goals defined in the Centers for Disease Control and Prevention’s Healthy People 2020 report. The working group will have its first meeting in August and will present its first report to the Governor no later than December 1, 2015.



pursuant to New York DR 2-101(f)

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