Manatt on Health Reform: Weekly Highlights

Minnesota’s Governor and legislators propose financial assistance options for on- and off-Marketplace individual coverage; Vermont receives final federal approval for the country’s first all-payer ACO model; and a report finds that 23% of 2015 healthcare payments were made through an alternative payment model.


One-Quarter of Healthcare Payments Made Under an Alternative Payment Model in 2015

A survey of 70 public and private health plans and two state Medicaid agencies—representing nearly 200 million covered lives—found that 23% of payers’ healthcare dollars spent in 2015 were part of an alternative payment model (APM) that reimburses providers based on quality measures rather than on quantity of services provided. The survey was conducted by the Health Care Payment Learning and Action Network (LAN), a public-private partnership established by HHS in March 2015 to help the agency meet its goal of tying 30% of Medicare payments to APMs by the end of 2016 and 50% by 2018. The LAN’s 2016 point-in-time survey also found that 18% of Medicaid dollars were paid through an APM.

95% of U.S. Children Have Health Coverage, Uninsurance Rate Cut in Half Since 2008

The percentage of children in the U.S. with health insurance reached an historic high of 95.2% in 2015, according to an analysis of Census data by the Georgetown University Center for Children and Families. The number of uninsured children declined by nearly one-third between 2013 and 2015 and has been nearly cut in half since 2008. The gains between 2013 and 2015, which the report’s authors say is “no doubt” due largely to the ACA, were predominantly made through Medicaid and CHIP while employer-sponsored coverage for children remained stable. Coverage rates improved between 2013 and 2015 in all but 9 states; California had the largest decline in the number of uninsured children (371,000 or 55.1% of previously uninsured children) and Nevada had the greatest decline in the uninsurance rate (7.3 percentage points). Half of all remaining uninsured children live in the South and nearly one in five live in Texas. The majority (73%) of the remaining uninsured children are eligible for coverage primarily through Medicaid or CHIP, while undocumented immigrant children represent 5% of the remaining uninsured children.

Coverage Rates Improved Across Income Levels From 2013 Through 2015

New data from the National Center for Health Statistics show a decrease in uninsured rates for non-elderly adults from 2013 through 2015 across the following income groups: poor (those earning below the FPL), near-poor (those earning 100% to 200% of FPL), and not-poor (those earning above 200% of FPL). Among poor and near-poor adults, the uninsurance rate decreased by nearly 14 percentage points to 26% and 24%, respectively. Among not-poor adults, it decreased by four percentage points to 8%. Other access and utilization measures included in the report are having a usual source of care and seeing or speaking with a health professional—both of which generally increased for poor and near-poor adults—and not obtaining needed medical care due to cost—which declined for all groups.

Vermont: CMS Finalizes Agreement With State to Launch All-Payer ACO

Nearly one month after receiving preliminary federal approval, CMS and Vermont finalized their agreement to launch the country’s first all-payer ACO, in which Medicare fee-for-service, Medicaid, self-insured plans and commercial payers will offer Vermont ACOs “aligned risk-based arrangements tied to health outcomes and healthcare expenditures.” While provider and payer participation will be voluntary, CMS and Vermont aim to include the majority of providers and suppliers in the risk-based arrangements and to “align” most Vermont residents to an ACO. To enable Medicaid’s full participation in the demonstration, CMS also approved a five-year extension of Vermont’s “Global Commitment to Health” Section 1115 demonstration.


2016 Marketplace Plan Dataset Expanded to Include Off-Marketplace Plans

The Robert Wood Johnson Foundation (RWJF) released a revised version of the 2016 HIX Compare dataset that now includes details for ACA-compliant off-Marketplace plans. An accompanying RWJF analysis published in Health Affairs reviews the general differences between on- and off-Marketplace plans for premiums and deductibles, metal tier distribution, out-of-network benefits, and regional variations. Among other findings, the analysis indicates that both premiums and deductibles are lower for on-Marketplace plans: the average unsubsidized on-Marketplace silver premium was $279 per month versus $314 for off-Marketplace plans; the average deductible for on-Marketplace silver plans was $2,053 compared to $3,273 for off-Marketplace plans. The vast majority of plans sold on the Marketplace are also sold off the Marketplace, though premium subsidies and cost-sharing reductions are not available for off-Marketplace plans. In an interview with Kaiser Health News, the author noted the additional distinction that consumers shopping for off-Marketplace coverage have no easy way to compare plans.

Minnesota: Multiple Plans Proposed to Address Individual Market Premium Rate Hikes

House Republicans, House Democrats, and Governor Mark Dayton (D) each proposed separate plans to provide financial assistance to Minnesotans who are ineligible for ACA tax subsidies and are purchasing on- or off- Marketplace individual coverage. Proposals from House Republicans seek to either reduce consumers’ costs (e.g., use surplus funding for “direct premium relief”) or increase consumer choice (e.g., secure a federal waiver to allow eligible Minnesotans to access tax credits off of the Marketplace). House Democrats have proposed a one-time rebate that would ensure consumers do not spend more than 10% of their annual income on individual plan premiums. The proposal would require eliminating a $31 million tax cut for tobacco companies and redirecting surpluses from the State's Health Care Access Fund and Minnesota Comprehensive Health Association fund. Governor Dayton's proposal would redirect $313 million in State reserve funding to provide individuals ineligible for ACA tax credits with monthly rebates equal to 25% of their health insurance premium. The three proposals are in response to recently announced 2017 premium rate increases for the individual market that range from 50% to 67% and will impact approximately 250,000 State residents, nearly half of whom are ineligible for ACA tax subsidies. Though currently unresolved, Governor Dayton has proposed a special legislative session to address this issue and planned to meet with the House Speaker to discuss the issue further.


Alabama: Two Probationary Regional Care Organizations Will Not Pursue Full Certification

Two Probationary Regional Care Organizations (PRCOs)—Alabama Care Plan and Care Network of Alabama—have notified the State of their decision to not pursue full RCO certification. Nine remaining PRCOs are seeking full certification as part of the State’s transition to Medicaid managed care delivered through RCOs, as approved by CMS through an 1115 waiver in February 2016. The transition was postponed from October 2016 to July 2017 due to a now-resolved Medicaid budget shortfall.

Arizona: Governor Imposes New Regulations on Medicaid and State Employee Opioid Prescriptions

Governor Doug Ducey (R) issued an executive order limiting the initial prescription of opioids to Medicaid beneficiaries and State employees to no more than a seven-day supply. Subsequent prescriptions for minors are also limited to no more than seven days. The limits for minors include exceptions for cancer, chronic diseases, and traumatic injury. Any subsequent prescriptions for minors also are limited to no more than seven days. Estimates indicate that just over 400 people died of prescription opioid overdoses in Arizona in 2015.

Iowa: State Increases Funding for Medicaid MCOs

Governor Terry Branstad (R) confirmed that the State’s Medicaid managed care organizations will receive an additional $127.7 million in payments during FY 2016 and FY 2017 in response to higher than expected prescription drug prices and utilization rates, according to the Des Moines Register. The State’s share of the additional payments will be $33.2 million, with the balance coming from federal matching funds. Governor Branstad said the State, which transitioned to Medicaid managed care in April, would still meet savings projections of $110 million annually compared to the previous fee-for-service program.


Delaware: Health and Social Services Announces Secretary’s 2017 Departure

The Department of Health and Social Services (DHSS) announced that Rita Langraf, who has served in the administration of Governor Jack Markell (D) since 2009 and is the agency’s current Secretary, will leave DHSS following the completion of her tenure as Cabinet Secretary in early 2017. Following her resignation, Langraf will join the faculty of the University of Delaware’s College of Health Sciences.



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