Manatt on Health Reform: Weekly Highlights


More than 8 in 10 Federal Marketplace Enrollees Receive Tax Credits

According to data released by CMS, 7.7 million consumers, or 87 percent of those on the Federally-facilitated Marketplace with a 2015 plan selection qualified for tax credits to subsidize premium costs. The average monthly tax credit was $263 per person per month, representing a 72% savings off the unsubsidized price of the plan. Savings were highest in Florida and Texas, with 1.5 million Floridians receiving an average monthly tax credit of $294 and more than a million Texans receiving an average monthly tax credit of $239. Consumers in State-based Marketplaces saw similar savings.

States Realize Savings from Medicaid Innovations

Two new reports show states realize significant savings from both Medicaid expansion and delivery reform. Analysis by our own team at Manatt Health Solutions for the Robert Wood Johnson Foundation finds Kentucky and Arkansas, two states that expanded Medicaid, will be able to fully fund expansion costs at least through 2021 with net savings of $820 million and $370 million, respectively. States with Medicaid Accountable Care Organization (ACO) programs are also seeing significant savings. As reported by The Commonwealth Fund, Colorado’s Regional Care Collaborative Organizations have generated net savings of between $29 and $33 million over three years. Minnesota’s Integrated Health Partnerships initiative achieved State savings of $10.5 million in its first year.

Employer Organizations Request HHS Delay Small Group Market Expansion

The U.S. Chamber of Commerce, with support from the National Association of Health Underwriters and other employer organizations, urged U.S. Department of Health and Human Services Secretary Burwell for a two-year delay of the expansion of the small group market from businesses with fewer than 50 employees to businesses with fewer than 99 employees. Under the expansion, the coverage provided by approximately 150,000 employers will become subject to insurance reform requirements including essential health benefits, rating rules, and minimum actuarial value and cost-sharing requirements. Employer organizations have lobbied against this expansion, arguing that premiums for the mid-size employer market could increase by 6-18 percent if enough employers choose to self-insure or drop coverage, making it more expensive for remaining employers to provide coverage to their employees going forward.


Alaska: Medicaid Reform Bill Unveiled in Senate

Senator Pete Kelly (R) introduced SB74, which calls for Medicaid reform in the State to reduce costs, but does not include Medicaid expansion. The bill outlines a variety of reform initiatives including the establishment of health savings accounts for Medicaid beneficiaries and a Medicaid managed care demonstration project for individuals enrolled in Denali KidCare, the State's CHIP, and other beneficiaries who opt in to the demonstration. In addition, the bill seeks to redesign the payment process and reform care delivery by expanding the use of telemedicine, enhancing care management, and reducing Emergency Department usage. The bill has been referred to the Senate Health and Social Services Committee for review.

Nebraska: Medicaid Expansion Bill Advances to Full Legislature

By a vote of 5-2, the Nebraska Legislature’s Health and Human Services Committee voted to advancethe Medicaid Redesign Act (LB472) for consideration before the full Legislature. Introduced by Lincoln Senator Kathy Campbell (R) in late February, the bill would expand Medicaid to 54,000 Nebraska adults and compel the State to seek federal authority to purchase private coverage with Medicaid funding and include healthy behavior incentives as part of coverage. The bill is expected to be filibustered and will also face opposition from Governor Pete Ricketts (R), who has opposed expansion in the past.

New Hampshire: House Committee Strikes Governor’s Request to Extend Medicaid Expansion Authority

Division III of the House Finance Committee voted by a margin of 6-3 to strike Governor Maggie Hassan's (D) budget proposal to extend Medicaid expansion authority into 2017. New Hampshire implemented its expansion in mid-2014 and earlier this month secured CMS approval to transition to a Medicaid premium assistance program in 2016 through which most expansion adults will be enrolled in qualified health plans in the Marketplace. Under current law, New Hampshire’s Medicaid expansion is authorized through 2016 and additional Legislative approval must be secured to continue operation.

Pennsylvania: State Releases Timeline for Medicaid Expansion Transition

On Monday, the Pennsylvania Department of Human Services (DHS) released a timeline detailing Governor Tom Wolf (D)'s plan to shift beneficiaries from the previous governor’s Healthy Pennsylvania plan into a traditional Medicaid expansion. The state will implement the two phases of the plan by September 30, including transitioning individuals who were enrolled in private coverage through Healthy Pennsylvania into the newly created HealthyChoices PA Medicaid program. To ensure that beneficiaries do not experience any lapses in coverage, DHS will be working with managed care organizations throughout the State to notify individuals by mail prior to the transition.

Rhode Island: Governor's Budget Includes Medicaid Reductions and Marketplace Funding Plan

Governor Gina Raimondo (D) unveiled her $8.6 billion budget proposal for Fiscal Year 2016, which includes $90 million in reductions to the State's Medicaid program and a funding plan for HealthSource RI (HSRI), as reported by Rhode Island Public Radio. Raimondo proposed $45 million in payment cuts to Medicaid providers, as well as $45 million in savings through Medicaid reform, which she has tasked the State's Working Group to Reinvent Medicaid with identifying by the end of April. In addition, the Governor proposed implementing a tax of between 1 and 4 percent on every individual and small business health plan in the State, regardless of whether the plan was purchased through HSRI. These user fees are projected to raise over $6 million in new revenue, which, in conjunction with federal funding through the end of the calendar year, will support the continued operation of the Marketplace.

Utah: No Deal on Medicaid Expansion this Session

Despite negotiations throughout this legislative session, Governor Gary Herbert (R) and the Utah Legislature failed to reach a deal on Medicaid expansion before the session concluded last Thursday. Attempts had been underway to find a compromise between the Governor's "Healthy Utah" plan, which the Senate passed but the House rejected, and “Utah Cares,” the plan created and supported by House Republicans. During a press conference, Governor Herbert announced that he is committed to working with legislative leadership to find a solution by July 31, 2015, after which there will be a special session to pass the plan.


Colorado: Marketplace Board Discusses Medicaid’s Role in Shared Eligibility System

The Denver Postreported that State officials are investigating methods to strengthen the partnership between Connect for Health Colorado (C4HC) and the state's Medicaid agency on the Shared Eligibility System, an online portal for consumers to determine Medicaid or premium subsidy eligibility. The Marketplace Board voted to seek proposals for an independent end-to-end review of the technology systems, but must still decide the degree the Shared Eligibility System is aligned with Medicaid and the level of financial contribution from Medicaid. Another proposed option is for customers who are not Medicaid-eligible be able to bypass the Shared Eligibility System.

Oregon: Governor Signs Bill Dissolving Health Insurance Exchange

Last Friday, Governor Kate Brown (D) signed SB 1, a bill that dissolves the state’s health insurance exchange, Cover Oregon, and transfers its functions to the State’s Department of Consumer and Business Services (DCBS). DCBS will take on providing enrollment assistance through a call center and website, contracting with Marketplace plans and leading decision-making for Small Business Marketplace establishment. The bill came about in response to difficulties faced by Cover Oregon in 2014, when it failed to enroll individuals seeking coverage in the first year of open enrollment under the Affordable Care Act, forcing the state to switch to the federal Marketplace.


Illinois: Governor Appoints New Marketplace Executive Director

Governor Bruce Rauner (R) appointed Karin Zosel as the new Executive Director of Get Covered Illinois, the State’s Partnership Marketplace. Zosel previously worked as a fundraiser, Congressional aide, legal researcher and CIA intelligence officer. Zosel replaces Jennifer Koehler, who was appointed by former Governor Pat Quinn (D) and resigned from the Marketplace in February.

Massachusetts: Governor Names Broker and Actuary to Marketplace Board

Governor Charlie Baker (R) filled two vacancies on the 11-member Health Connector Board of Directors. The Governor named Mark Gaunya and Rina Vertes to the Board for the seats reserved for an insurance broker and a health insurance actuary, respectively. These appointments fill half of the four vacancies created after the Governor asked four Board members to resign.


Arizona: House Passes Bill Prohibiting ACA Implementation

By a vote of 36-21, the Arizona House of Representatives passed HB 2643, which would prohibit all state agencies from using any personnel or financial resources to enforce, administer, or cooperate with the ACA. The bill now heads to the Senate Rules Committee for further debate.



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