Manatt on Health Reform: Weekly Highlights

King v. Burwell speculation has been rampant since the Supreme Court heard oral testimony on Wednesday. All eyes are on Justices Kennedy and Roberts, who are likely to wield the deciding votes. In other news, CMS approved a premium assistance waiver in New Hampshire, allowing the State to enroll Medicaid expansion new adults in qualified health plans on the Federal Marketplace, and Medicaid expansion continues to inspire legislative debate in Alaska, Florida, Kansas, Montana, and Utah.


Speculation Abounds after Supreme Court Hears Oral Testimony on King v. Burwell

On Wednesday March 4, the Supreme Court heard oral testimony on King v. Burwell, the case that could terminate subsidies to residents of the 34 states with federally run health insurance marketplaces. Speculation focuses on Justices Kennedy and Roberts, whom most SCOTUS-watchers deem likely to cast swing votes. Justice Kennedy in particular raised constitutional concerns about the plaintiffs’ argument, but also gave a nod to their plain language read of the statute. Justice Roberts was uncharacteristically quiet, leaving wide berth for speculation. The Solicitor General, representing the federal government, faced questioning regarding his argument that the statute is ambiguous, thus allowing the Internal Revenue Service to interpret it and determine if subsidies may be provided through The Court's ruling is expected at the end of June.

Democratic Senators Ask HHS for Special Enrollment Period for Pregnant Women

The Senate Health, Education, Labor, and Pensions Committee Ranking member Senator Patty Murray (D-Wash.)—along with 36 other Senators—sent a letter to HHS Secretary Burwell requesting that pregnant women be permitted to enroll in coverage through Marketplaces outside of annual open enrollment periods. Currently, in Federal and State-based Marketplaces, while the birth of a child provides mother and baby with a special enrollment period, a woman becoming pregnant does not. State-based Marketplaces have flexibility to define and establish special enrollment periods (SEPs), though none has done so for pregnancy to date. The Senators cited concerns that a woman who is ineligible for Medicaid and either uninsured or enrolled in a grandfathered plan that does not cover maternity services will be unable to obtain adequate pre-natal care. CMS declined to establish a pregnancy SEP in regulations released on February 27, 2015, but reiterated the HHS Secretary’s flexibility to do so. In response to the Senators’ letter, Secretary Burwell stated that HHS is open to considering the issue.

Affordable Care Act Will Cost Taxpayers Less While Coverage Estimates Decrease

According to data released by the Congressional Budget Office, the Affordable Care Act’s provisions will cost a total of $1.2 trillion over the next decade, $142 billion less than the agency had predicted in January 2015. This decrease in estimated cost is a result of two factors: (1) the lower-than-expected cost of health insurance premiums, thus decreasing the cost of subsidizing that coverage; and (2) the fewer-than-expected number of uninsured people prior to the ACA, meaning fewer people will gain coverage as a result of the law. The CBO estimates the number of people who will gain coverage will be 25 million by 2025, down from previous estimates of 27 million. The CBO has also decreased the number of consumers who will enroll in Marketplace plans by 1 million to reflect current enrollment trends.


Alaska: Governor Determining Path Forward after Removal of Medicaid Expansion from Budget

Governor Bill Walker (I) is determining next steps after the House Finance subcommittee removed nearly $150 million in new federal revenue for expanding Medicaid from his Fiscal Year 2016 budget proposal, as reported by Alaska Public Media. Republicans requested that the Governor submit standalone legislation, rather than make changes to the State’s operating budget, as the vehicle for implementing expansion. The Governor noted that a Medicaid expansion bill, HB18, was introduced by House Democrats in January and could serve as the standalone bill. In the meantime, Walker’s administration is meeting with House members to understand their concerns with the current expansion bill, and to discuss expansion in greater detail in order to build support.

Florida: Governor Asks President Obama Not to Cut LIP Funding

Governor Rick Scott (R) reacted to news from CMS that it would not renew funding for Florida’s Low Income Pool (LIP) program, which reimburses hospitals that treat large numbers of poor and uninsured patients, in “its present form” by sending a letter to President Obama. The Governor outlined Florida’s intent to use LIP funding to introduce quality-based payment reform and noted the State’s expectation that CMS would not leverage Florida’s option to expand Medicaid as a means to withhold LIP funding. Though Governor Scott is opposed to Medicaid expansion, the Florida Senate is currently considering “Healthy Florida Works,” a proposed expansion bill that would enable Medicaid beneficiaries to purchase private insurance in a state-run private exchange and promote “personal responsibility,” with premiums, cost-sharing and a work requirement, among other strategies.”

Kansas: Governor’s Remarks Reveal Shifting Stance on Medicaid Expansion

While attending a private event with conservative Missouri lawmakers, Kansas Governor Sam Brownback (R) remarked that if the Kansas Legislature presented him with a budget-neutral Medicaid expansion bill, he would likely sign it, according to The Missouri Times. The Governor echoed these remarks in an address to the Kansas Association of Insurance Agents, stating, "I’ve been pushing that anything we do on Medicaid expansion has to be 100-percent paid for." The Governor’s shifting stance follows a decision by House Republicans to allow for Medicaid expansion hearings, scheduled for March 18 and 19.

Montana: House Committee Republicans Deliver Blow to Medicaid Expansion

After a nearly 7-hour legislative hearing, Montana’s House and Human Services Committee members voted along party lines to move the Healthy Montana Plan—the Governor’s Medicaid expansion plan—to the House floor with a recommendation that representatives vote against the bill. According to legislative procedures, 60 representatives will need to dismiss the recommendation in order for the bill to be debated and voted on, an unlikely scenario given that the House of Representatives has a Republican majority and leadership that has expressed strong opposition to the bill in the past. Governor Steve Bullock (D) expressed continued openness to working toward Medicaid expansion after the vote, while Republican Senator Ed Buttrey will introduce a compromise bill this week, called Montana HELP (Health and Economic Livelihood Partnership), which proposes to couple Medicaid coverage with opportunities for job training and education and includes co-pays and premiums.

New Hampshire: CMS Approves Premium Assistance Waiver for Healthcare Expansion

Governor Maggie Hassan (D) announced that the federal government approved the State’s premium assistance waiver, permitting New Hampshire’s Department of Health and Human Services to enroll Medicaid expansion new adults in qualified health plans on the Federal Marketplace. The premium assistance program, approved to operate from January 1 through December 31, 2016, will exclude the medically frail and those with access to cost-effective employer-sponsored insurance. As New Hampshire expanded Medicaid through the State’s existing managed care infrastructure in mid-2014, the State plans to transition current expansion enrollees into the premium assistance program on January 1, 2016.

Utah: Medicaid Expansion Debate Continues, with Governor Noting Special Session Contingency

After Utah’s Senate passed SB164—the Governor’s “Healthy Utah” Medicaid expansion bill—the House Business and Labor Committee voted against it and then passed the “Utah Cares” bill, HB466, seen as the alternative expansion plan. Utah Cares would cover approximately 60,000 Utahns up to 100% of the federal poverty level (FPL), costing the state $64 million over two years. Healthy Utah is estimated to cover approximately twice as many people up to 138% FPL at a lower cost—$25 million for a two year pilot. Because the legislative session closes this week, Utah Cares will go straight to the Senate floor without a committee hearing. Proponents of Healthy Utah are still hoping to strike a compromise between the two plans, and Governor Gary Herbert (R) has indicated he will call a special session if a compromise cannot be reached by the close of the session.


Massachusetts: Governor’s Budget Proposal Seeks to Constrain Medicaid Spending

Governor Charlie Baker (R) released his $38 billion budget, proposing to curb the projected growth of MassHealth from 16.0% to 5.6% in fiscal year 2016. Of the approximately $761 million in cuts to the Medicaid program, the Governor estimates over a quarter of the savings will come from eligibility reviews of more than 1.2 million enrollees, reports the Boston Herald. These redeterminations are required by the federal government, but have not been completed since October 2013. The budget also provides $174 million to implement adult dental benefits and Applied Behavioral Analysis services for children with autism, and seeks additional savings by limiting opioid prescriptions to two weeks and maintaining current nursing home reimbursement rates. The only benefit reduction included in the budget is the elimination of chiropractic services and is estimated to save the state $300,000.

North Carolina: Budget Proposal Includes Modest Increase in Medicaid Spending, No Expansion

Governor Pat McCrory’s (R) 2015 budget proposal, totaling $21.5 billion, includes almost $3.8 billion in funding for Medicaid, an increase of 2.9% from last year’s $3.7 billion dollar spend. This increase reflects the State’s projections that nearly 70,000 people will discover they are eligible for Medicaid as they attempt to enroll in coverage through the Marketplace. Governor McCrory acknowledged that his administration continues to look “at [other states’] plans,…at what waivers were given,…at what waivers we think we’d need to have a North Carolina plan,” but that Medicaid expansion, and the source for the State’s costs, remains an uncertainty.


Arkansas: Senate Passes Bill to Hold State-based Marketplace While Awaiting King v. Burwell Outcome

The State Senate passed SB343, which prevents the implementation of a State-based Marketplace (SBM) in Arkansas before the King v. Burwell ruling. The bill, which heads to the House of Representatives next, lays out two scenarios:

  • If the Supreme Court rules that federal subsidies are allowable through the Federally-facilitated Marketplace (FFM), the State will move forward with its existing plans to establish a SBM for coverage year 2017.
  • If the Supreme Court rules that federal subsidies are not allowable through states using the FFM, the State Legislature will have the authority to reassess the State’s health exchange options and must reauthorize the policy to implement a SBM.

A second bill currently under committee review in the House, HB1492, would prohibit the establishment of a SBM regardless of the Supreme Court case.

California: Governor Appoints Two New Members to Marketplace Board

Governor Jerry Brown (D) announced the appointment of two members to the Covered California Board of Directors—Genoveva Islas of the Public Health Institute and Marty Morgenstern, formerly of the California Labor and Workforce Development Agency. If confirmed by the State Senate, the two appointees will replace Kim Belshé and Susan Kennedy, who were originally appointed to the Board by Governor Schwarzenegger (R). The five-member Board is comprised of two members selected by the Governor, two selected by the Legislature, and the Secretary of the California Department of Health and Human Services.



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