Manatt on Health Reform: Weekly Highlights

With the election of a new Governor, the future of Kentucky’s Marketplace and Medicaid expansion is uncertain; CMS questions Iowa on its Medicaid managed care transition timeline; and the Supreme Court agrees to hear a case on the ACA’s contraception requirement.

MEDICAID EXPANSION & REFORM NEWS:

Iowa: Medicaid Managed Care Transition Faces New Challenges

CMS expressed significant concerns about Iowa’s implementation timeframe for transitioning to mandatory Medicaid managed on January 1, 2016. In order to receive federal approval on their waiver application, the State must demonstrate readiness for the transition through a gate review process. CMS will also conduct a series of listening sessions in November to hear from stakeholders impacted by the transition. Separately, the Iowa Hospital Association and 11 hospitals in the state filed a petition in the Polk County District Court requesting that the transition to managed care be suspended until the court can rule on the legality of using a tax on hospitals to fund managed care organizations.

Kansas: Coverage Expansion Supporters Look to Indiana for Possible Model

A coalition of 14 organizations supportive of expanding access to healthcare, including the Kansas Hospital Association, hosted an educational forum with Indiana hospital officials to review possible paths forward. Indiana hospital officials detailed how their State designed a Medicaid expansion program—the Healthy Indiana Plan—that met the unique needs of Indiana. Senate Vice President Jeff King (R) said that he is ready to discuss the policy details for coverage expansion, and the Kansas Hospital Association noted that a specific proposal is forthcoming from expansion advocates.

STATE MARKETPLACE ACTIVITY:

Kentucky: Uncertainty in Medicaid Expansion and Marketplace Following Gubernatorial Election

The future of Medicaid expansion and Kynect, Kentucky's Marketplace, is uncertain following last week’s gubernatorial election. Governor-elect Matt Bevin (R) initially campaigned on repealing Medicaid expansion and shutting down Kynect. While the Governor-elect continues to pledge to dismantle Kynect, which would require the State to shift issuers and enrollees to HealthCare.gov, he has said in more recent interviews that his administration may maintain Medicaid expansion but introduce new components through an 1115 Medicaid waiver to encourage “personal and financial responsibility.” According to a recent report by Gallup, Kentucky had the second highest statewide reduction in the uninsured rate in the country (11.4 percentage points) following implementation of the ACA. A study of the State’s Medicaid expansion program estimated that the program will have a net positive impact of $30.1 billion on Kentucky’s economy through 2021.

Minnesota: State Marketplace Nominates New CEO

The board of MNSure, Minnesota’s health insurance Marketplace, announced the nomination of Mark Nyquist as the sole finalist from the 42 applicants for the open chief executive position. If confirmed by the board, Nyquist would be the fourth CEO in two years. Nyquist has previously worked for several large companies in the Twin Cities area, including UnitedHealth Group.

New York: State Offers Additional Protections for Co-Op Consumers

The New York State Department of Financial Services, in conjunction with the New York State of Health Marketplace (NYSOH), announced additional protections for consumers enrolled in the now-defunct Health Republic Insurance of New York (HRINY) plan. HRINY's 200,000 former customers may select a new health insurance plan for the remainder of 2015 through November 30 and will be auto-enrolled in a new NYSOH plan if they fail to elect new coverage by that date to ensure continuity of coverage. Consumers will not be charged by their new plans for deductible amounts already met in 2015, and will be protected from providers attempting to collect funds owed by HRINY directly from consumers. HRINY members who are in their second or third trimester of pregnancy or are undergoing treatment for a life-threatening or degenerative and disabling condition or disease may be able to continue to receive care from their provider under their new policy, even if their provider does not participate in their new health insurer's network.

FEDERAL NEWS:

16.3 Million Individuals Gain Coverage Since Affordable Care Act

The uninsured rate reached a new low of 9% in the first six months of 2015, with 16.3 million previously uninsured people enrolling in health insurance since 2013, according to data released by the Centers for Disease Control and Prevention (CDC). The report also showed a corresponding increase in private coverage, including coverage purchased through the Marketplace, from 64.2% in 2013 to 70.6% in 2015. The number of children with private coverage also increased, from 52.6% in 2013 to 56% in 2015, reversing a 14-year decline. Hispanic adults saw the greatest improvements in uninsured rates, decreasing from 40.6% in 2013 to 27.2% in 2015.

Supreme Court Will Hear Contraception Mandate Case

The Supreme Court announced that it will hear Zubik v. Burwell, which asks the Court to determine if religiously affiliated employers are unjustly burdened by the accommodation process for the ACA's requirement to cover contraceptive care. That process, developed by the Obama Administration as a result of the Hobby Lobby Supreme Court case, requires health insurance issuers and third party administrators to provide contraceptive services to employers’ health plan enrollees without charging the employer or enrollee for the service. All circuits of the U.S. Court of Appeals, except for the 8th Circuit, ruled that the accommodation strikes the appropriate balance between access to care and protecting religious beliefs.

CMS Urges State Medicaid Directors and Drug Manufacturers to Keep Hepatitis C Drugs Accessible and Affordable

CMS issued a Medicaid Drug Rebate Program Notice to State Medicaid directors requesting that states examine their fee-for-service and managed care drug benefits to ensure that coverage limitations for direct-acting antiviral drugs used to treat hepatitis C are not unreasonably restrictive. The notice also reiterates that states should negotiate supplemental rebates and other pricing arrangements with drug manufacturers. CMS additionally sent letters to drug manufacturers requesting information regarding any existing value-based purchasing arrangements available to states.

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