Manatt on Health Reform: Weekly Highlights

With the King v. Burwell ruling expected by the end of the month, Congressional Republicans continue to offer contingency plans in the event of a ruling for the plaintiffs; and the Mississippi Insurance Commissioner proposes a state-specific plan. In other news, the Pennsylvania Governor says all full-cost CHIP plans must meet ACA minimum essential coverage requirements.


Obama Administration Speaks Out as King v. Burwell Decision Looms

As the King v. Burwell ruling fast approaches, the Obama Administration is reiterating that it has no contingency plan in place if SCOTUS rules in favor of the plaintiffs and premium subsidies are eliminated for plans. Health and Human Services Secretary Sylvia Burwell testified before the House Ways and Means Committee that the responsibility of contingency planning sits with Congress, states, and governors, as reported by The New York Times. President Obama spoke to the Catholic Health Association in support of the ACA, delivering the message that taking away the coverage that Americans now receive as a result of the ACA would harm millions of people, as reported by The Washington Post.

Congressional Republicans Continue to Offer King v. Burwell Contingencies

Senator Bill Cassidy (R-LA) and Representative Dr. Tom Price (R-GA) both announced contingency plans for a ruling in favor of the plaintiffs in King v. Burwell. Cassidy's plan, the Patient Freedom Act, is co-sponsored by Senate Majority Leader Mitch McConnell (R-KY), Majority Whip John Cornyn (R-TX), and five Senators. The plan seeks to repeal the individual and employer mandates along with the requirement for plans to provide essential health benefits. Individuals would receive either a state or federal tax credit in the form of a Health Savings Account. Price's plan, the RESCUE (Restoring Equity, Saving Coverage, and Undoing Errors) Act of 2015, establishes tax credits based only on age and allows consumers to purchase insurance through Individual Health Pools. The RESCUE Act repeals all insurance reforms in the Affordable Care Act and specifically allows insurers to deny coverage of preexisting conditions if diagnosed within six months of enrollment. These proposals join a growing list of Republican bills, including the Johnson Bill, which would repeal the individual and employer mandates while continuing to provide subsidies only for existing Marketplace participants through August 2017, and the Sasse Bill, which gradually reduces subsidies over an 18-month period.

Mississippi Insurance Commissioner Proposes King v. Burwell Mitigation Plan

Insurance Commissioner Mike Chaney has sent a King v. Burwell contingency plan to the Governor, Lieutenant Governor, and House Speaker. According to the Mississippi Business Journal, the plan would use federal funding to pay for insurance plans purchased through the Mississippi Comprehensive Health Insurance Risk Pool Association. The plan would require approval by all four state officials and the federal government, which appears unlikely given past actions and statements by the governor including twice blocking the establishment of a state-based exchange.


State Exchanges Provided Flexibility in Using Establishment Funds

CMS released new guidance outlining the allowable uses of federal grant funds for Marketplace establishment. State-based Marketplaces must be self-sustaining as of January 1, 2015 and may not use federal grant funds for ongoing operations. However, the guidance advises current Marketplaces grantees of establishment activities eligible for federal support: stabilizing Marketplace IT systems, instituting financial and program audit procedures, supporting outreach and education, providing manual support for call centers if IT functionality is under development, and planning for long-term capital support of the Marketplace. The guidance also allows Marketplaces to request extensions on establishment grant funds at no cost to complete activities. Seeks Comment on Cost Comparison Tool

CMS announced the development of an Out-of-Pocket (OOP) comparison tool for the 2016 annual open enrollment period. The OOP tool will allow consumers in to estimate total spending, including both premium and expected medical costs. CMS is requesting public comment on the development of the OOP tool including the methodology for incorporating cost data, cost-sharing data, and user input on consumer demographics. CMS is also proposing to make the tool’s source code available to State-based Marketplaces. The deadline for public comment is June 29, 2015.

CMS Updates Requirements on Plan Information for Consumers

CMS finalized a rule updating requirements for information plans must provide to consumers. The final rule clarifies that insurers must make coverage information accessible online to all interested consumers. The rule also lays out revisions for the Summary of Benefits and Coverage(SBC) including the content and the form and manner in which the SBC must be provided.


Colorado: Marketplace Board Approves 2016 Budget

The Colorado Marketplace's Board approved a budget that will generate a cash operating deficit of $4.6 million and a total deficit of $13.3 million in 2016, reports the Denver Post. Cash reserves of $28.5 million will be used to cover the budgetary shortfall.

Florida: Legislature Agrees to LIP Budget Fix; First Hearing Date for Governor’s Lawsuit against CMS Announced

Resolving a contentious budget debate that sent lawmakers into a special session, the Florida House and Senate agreed to allocate $2 billion to continue the Low Income Pool (LIP) close to its 2014 funding level, including $400 million in state funds that will allow the state to draw down a $600 million in federal matching funds. Governor Rick Scott (R) must sign the completed budget by June 30 to enact the provision. Meanwhile, a federal district judge rejected Governor Scott’s request to compel CMS to enter into mediation with the state and announced that the first LIP lawsuit hearing will take place on June 19. Live witness testimony will be included “to have a thorough understanding of the LIP extension or amendment process and the history of the negotiations between the parties in order to resolve the questions raised.”

Massachusetts: Legislature Creates Committee to Examine Medicaid Costs

House Speaker Robert A. DeLeo (D) is establishing a special committee to study the financial pressures facing Medicaid managed care plans, reports The Boston Globe. The 13-member advisory panel will include seven House members and six industry representatives, and will explore cost drivers and where plans can achieve savings. The committee will issue recommendations by October 1.

Pennsylvania: Full Cost CHIP Plan Enrollees Won’t Face Penalties

Governor Tom Wolf (D) announced that all full cost Children's Health Insurance Program (CHIP) plans purchased by families above the income limit for subsidies will now meet the minimum essential coverage requirements of the ACA, relieving families from facing tax penalties for 2015 due to plans not being compliant with ACA consumer protections. The Governor also confirmed that families would not face premium increases for the current plan year.

Rhode Island: House Finance Committee Passes Budget with Marketplace Assessment

The House Finance Committee passed a Fiscal Year (FY) 2016 State budget that upholds the proposed premium assessment on individual and small group health plans to fund Rhode Island’s Marketplace, stating that the assessment "shall not exceed the revenue able to be raised through the federal government assessment and shall be established in accordance and conformity with the federal government assessment." The budget also includes lower-than-expected Medicaid payment cuts to hospitals and nursing home. The FY16 budget goes to the full House next.

Washington: Exchange to Expand Small Business Health Options Program Eligibility

Starting in January 2016, business with up to 100 employees will be eligible to participate in plans offered through Washington Healthplanfinder Business. Previously, only businesses with 50 or fewer employees were eligible to participate. Carriers have also applied to offer an increasing number of small business health options program plans on the Exchange. Starting in 2016, three insurers—United Healthcare of Washington, Moda Health Plan, and Kaiser Foundation Health Plan of the Northwest—have applied to sell 47 small business health options program plans on the Exchange.

Washington: Public Employees Benefits Board to Offer ACO-like Plans

Starting in 2016, Washington's Public Employees Benefits Board (PEBB) will offer two ACO-like plans, called Accountable Care Programs (ACPs), to its more than 350,000 participating public employees and retirees. In a press release, the Washington State Health Care Authority said the two ACPs—Puget Sound High Value Network LLC and UW Medicine Accountable Care Network—will provide enhanced care coordination at lower cost and offer integrated physical and behavioral health services to their members. The PEBB is offering the ACPs as a first step toward shifting 80% of state healthcare spending to value-based arrangements by 2019, a key component of Washington's State Healthcare Innovation Plan. The two ACPs will be available in five counties in 2016, with plans to expand statewide in 2017.


Arkansas: Governor Appoints New Medicaid Inspector General

Governor Asa Hutchinson (R) announced that Elizabeth Smith will replace the current Medicaid Inspector General, Jay Shue, who recently resigned. Smith currently serves as the Governor's chief legal counsel.

Nevada: Insurance Commissioner Resigns

Scott J. Kipper, Commissioner of the Department of Insurance, announced his resignation effective July 2nd. The Department of Insurance did not provide details on when a replacement would be named.

Pennsylvania: New Insurance Commissioner Confirmed by Senate

The Pennsylvania Senate unanimously confirmed Teresa Miller as the state’s insurance commissioner. Miller was appointed as acting commissioner by Governor Tom Wolf (D), and has been serving in the position since the Governor’s inauguration on January 20th. Before taking on this role, Miller served in the Oregon Insurance Division and as key staff in CMS’s Center for Consumer Information and Insurance Oversight (CCIIO), implementing many of the private market reforms established under the Affordable Care Act.



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