Manatt on Health Reform: Weekly Highlights

Ohio passes a budget mandating that the State request a waiver to implement Medicaid Health Savings Accounts; in Nevada, Marketplace enrollees who experienced technical difficulty obtaining coverage are eligible for a tax-penalty exemption; and a national report finds modest increases in 2016 silver plan premiums.

CMS to Provide $7.9 Billion to Qualified Health Plan Issuers

On the heels of announcing an increase in the reinsurance copayment rate, a new CMS report indicates it will pay more than $7.9 billion in reinsurance payments to 437 qualified health plan (QHP) issuers for the 2014 benefit year. The report also noted that the risk adjustment methodology for 2014 “work[ed] as intended,” by appropriately compensating issuers who enrolled high risk patients, including small plans with isolated cases of catastrophically ill individuals as well as issuers with a large share of HIV/AIDS patients, key specialty hospitals in their networks, or a history of serving high-risk individuals as the issuer of last resort.

Changes in 2016 Premiums Modest, According to New Report

A review of the lowest and second lowest cost silver plans in 11 major cities revealed modest changes in premiums for the 2016 benefit year, according to a new report by the Kaiser Family Foundation. The report found that premiums for the second lowest cost silver plan, or benchmark plan, increased by an average of 4.4%. In the same cities last year, the average benchmark plan premium decreased by 0.6%. This year’s differential in the average benchmark plan premium varied significantly across the cities—from a 10.1% decrease in Seattle, Washington to an increase of 16.2% in Portland, Oregon. The report notes that the variation may reflect an assortment of factors, including the composition of the risk pool, the steadiness of enrollment growth, and competitive dynamics. Additionally, this is the first year plans are setting rates based on their previous experiences with these enrollees, though the authors caveat that data from 2014 may reflect some pent-up demand for health services among the previously uninsured. In some states, these rates are still preliminary and may change based on negotiations between issuers and the state.

Supreme Court Allows Some Religious Groups to Avoid Compliance with Contraception Requirement

The Supreme Court issued an order that temporarily allows some religious nonprofit organizations not to comply with the requirement to offer insurance that covers contraceptive services. Under the Supreme Court’s order, the nonprofit organizations also need not satisfy specific regulatory requirements for an exemption or accommodation; instead, the organizations must merely ensure that the government is aware that they are nonprofit religious organizations. The plaintiffs claim that the requirement to submit a form to invoke an accommodation from the contraceptive mandate itself violates the Religious Freedom Restoration Act of 1993, because submitting the form will result in their health insurance issuer or third party administrator covering contraceptives for their employees or students. The United States Court of Appeals for the Third Circuit ruled that the requirement to submit the form did not impose a substantial burden on their free exercise of religion. The Supreme Court’s temporary order enjoining the accommodation will remain in place at least until the Supreme Court decides whether to review the merits of the Third Circuit’s decision.

STATE HEALTH REFORM NEWS:

Colorado, D.C. and Illinois Submit 2017 Benchmark Plans to CMS

As permitted in the HHS Notice of Benefit and Payment Parameters for 2016, states have begun selecting new essential health benefit (EHB) base benchmark plans for 2017 from among those that were offered in 2014. States that do not select a new benchmark plan for 2017 will default to the largest plan in the small group market. Three states announced their selections: Colorado selected a new plan that offers obesity, chiropractor, and some infertility coverage, which were not included in the previous benchmark plan. D.C. selected the largest small-group plan, which it says is consistent with its previous benchmark; and, Illinois selected a small group plan from the same carrier as last year, which it says will “preserve the benefits offered in the current EHB benchmark without reducing coverage in any of the 10 EHB categories.”

Nevada: Marketplace Assists Enrollees File for Exemption from Penalty for Uninsurance

According to Nevada Health Link Executive Director Bruce Gilbert, the IRS has confirmed that Marketplace enrollees who experienced difficulty enrolling in coverage due to a Marketplace technical failure will be eligible for an exemption from the Affordable Care Act’s penalty payment for uninsurance.” In order to receive this exemption, consumers must submit the IRS tax-exemption document, Form 8965, and specifically indicate exemption type “G.” The Las Vegas Review Journal reports that some consumers in Nevada filed for the exemption under “general hardship,” which does not cover technological failures and requires CMS to grant an individual-specific exemption code. Nevada Health Link has posted instructions on its website for its enrollees to resubmit Form 8965.

New York: Governor Announces Savings and New Funding for Medicaid for Delivery System Reform

New York Governor Andrew Cuomo (D) announced that per person Medicaid spending dropped to $8,223 in 2014, the lowest per capita spending rate since 2003. Despite enrollment growth from 4.3 million to 6.3 million during this time, the rate of overall growth in Medicaid spending also decreased. New York’s Medicaid spending has grown 1.4% annually from 2011 to 2014, down from a 4.3% annual growth rate between 2003 and 2010. The Governor attributed the reduced per person spending and growth rates to initiatives implemented under the Medicaid Redesign Team (MRT). In tandem with the announcement, the Governor also detailed new funding allocations for provider networks developed under the MRT Delivery System Reform Incentive Payment program, totaling $7.3 billion to be invested over the next five years.

Ohio: Budget Requires State to Seek New Medicaid Cost-Sharing

The 2016-2017 state budget, signed into law by Governor John Kasich (R) last week, requires the Ohio Department of Medicaid to request a federal waiver to enact Health Savings Accounts (HSAs) for all non-disabled Medicaid recipients regardless of income. Beneficiaries would be required to contribute 2% of household income, up to $99 annually, to their HSA, into which the Ohio Medicaid program would also contribute $1,000 each year. Until the account is depleted, beneficiaries would be subject to copayments and health plans would not be allowed to pay for any services. Currently, no other state has federal permission to condition Medicaid eligibility on premium payments or account contributions for enrollees with income below 100% of the poverty line.

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