Manatt on Health Reform: Weekly Highlights

Iowa's largest insurer joins the State's Marketplace for coverage year 2017; carrier changes are announced for Marketplaces in Kentucky, Oklahoma and Wyoming; and South Dakota's Governor convenes the Health Care Solutions Coalition to study ways to pay for Medicaid expansion.

MARKETPLACE NEWS:

Iowa: Wellmark to Join Marketplace for 2017 Open Enrollment

Citing system improvements at HealthCare.gov and the Supreme Court’s ruling in King v. Burwell to uphold the legality of subsidies, Wellmark Blue Cross Blue Shield will offer plans on Iowa's Federally-facilitated Marketplace for the first time for coverage year 2017, the company announced last week. The Des Moines Register notes that Wellmark, one of the most well-known insurers in the State, sells more than three-quarters of all individual market policies in Iowa, the majority of which are grandfathered ACA non-compliant plans that can no longer be offered after September 2016. Kaiser Health News speculated that Wellmark’s exclusion from the Marketplace thus far may have contributed to the State’s low overall enrollment rate, among the lowest in the nation. For coverage year 2016, five carriers will offer products on the Marketplace, four of which will be new to the Marketplace.

Kentucky: State’s Co-Op Announces Closure

Kentucky Health Cooperative announced that it will not offer health plans for coverage year 2016. Currently 51,000 Kentuckians across all 120 counties have coverage through the Kentucky Health Cooperative purchased on Kynect, the State's Marketplace. According to the Louisville Courier Journal, the State’s Department of Insurance will help these individuals purchase new plans from one of the other seven insurers on the Marketplace. Kentucky Health Cooperative interim CEO Glenn Jennings said that the decision to shut down was due to the significantly lower-than-expected risk corridors reimbursement that CMS recently announced.

Oklahoma: Reduced Choice for Marketplace Participants

Three insurers covering less than 3% of the State’s Federally-facilitated Marketplace enrollees are leaving the Marketplace for coverage year 2016, leaving only two plan options for consumers: Blue Cross Blue Shield of Oklahoma, the current market leader, and UnitedHealthcare, a new entrant to the market. Blue Cross Blue Shield is also moving 40,000 subscribers from its “Blue Choice” plan, which it is discontinuing in 2016 for the individual market for cost reasons, to two new plans with fewer participating providers. Affected members will have the option to switch plans or carriers during open enrollment. The three companies leaving the Marketplace are CommunityCare of Oklahoma and GlobalHealth, both Tulsa-based HMOs, and Assurant Health, a Wisconsin-based company that is leaving the individual health insurance market nationwide. The Deputy Commissioner of the Oklahoma Insurance Department said that most insurers on the State’s Marketplace lost money in 2014 and would probably do so again in 2015.

Wyoming: One of Two Insurers Pulls Out of Federal Marketplace

WINhealth announced that it will no longer offer Qualified Health Plans through the Federally-facilitated Marketplace for 2016, leaving Blue Cross Blue Shield of Wyoming as the lone insurer for the upcoming open enrollment period. The 8,200 individuals currently enrolled in WINhealth plans (approximately 38% of Wyoming’s Marketplace enrollees) will retain coverage through the end of 2015, but must reapply and select a new plan on HealthCare.gov for 2016. WINhealth’s decision came shortly after CMS’s October 1 announcement that insurers will receive only 12.6% of their risk corridors payment requests, which will reduce WINhealth’s payments by $4.4 million, making it financially unsustainable to participate. The risk corridors program was designed to provide protection against claims uncertainty for the first three years of the Marketplace program.

Virginia: HIV Patients Enrolled in Qualified Health Plans See Improved Health

A study presented at an Infectious Diseases Society of America conference indicated that low-income HIV patients who enrolled in a Qualified Health Plan (QHP) with financial assistance from the State’s AIDS Drug Assistance Program (ADAP) were 45% more likely to reduce their HIV viral load to “very low or undetectable levels,” compared to those who continued to receive their medication through ADAP alone. The study’s lead researcher explained the improved outcomes were “likely a result of more comprehensive care” and access to a wider set of HIV medications. Researchers also noted that enrolling ADAP members in QHPs provides coverage to a greater number of HIV patients than traditional ADAPs due to cost efficiencies, though only 47% of eligible Virginians in ADAP enrolled in a QHP. ADAPs, which all states have, pay for medications and medical care at federally funded clinics for uninsured and underinsured low-income HIV patients, and are permitted to pay QHP premiums and cost sharing for qualified HIV patients. The conference spokesman noted it is not yet clear if other states are seeing similar outcomes to Virginia or what the overall financial impact is of enrolling ADAP patients in QHPs.

MEDICAID EXPANSION & REFORM ACTIVITY:

Arkansas: Report Recommends Continuing Medicaid Expansion Program

A report presented to the Arkansas Health Reform Legislative Task Force supports the continuation of the State's Medicaid expansion program (known as the "Private Option," which uses Medicaid funds to purchase qualified health plan coverage for eligible individuals through the State's Marketplace) with changes that emphasize personal responsibility, wellness, and accountability. The report, submitted by the task force’s consultant, the Stephen Group, confirms preliminary projections released in August that expansion will have a net positive impact of $438 million on State funds between 2017 and 2021. The report also recommends specific program reforms, including: implementing a mandatory premium assistance program for employer-sponsored insurance; enhancing cost sharing for beneficiaries with substantial assets; mandating a work referral program for beneficiaries who are not meeting work standards; and authorizing beneficiaries to be locked out of the program for six months in certain circumstances. The report addresses other health reform issues, such as a potential 1332 State Innovation Waiver for the State's Small Business Health Options Program Marketplace and options for reforming the State's traditional Medicaid program. The task force is expected to make its final recommendations in December.

Arkansas: Director of Human Services Resigns

Department of Human Services Director John Selig announced that he will resign at the end of the year and move to the private sector, reports Arkansas News. Selig has worked in State government for 27 years, previously serving in directorship roles for behavioral health services and in-home health services. Most recently, Selig led the implementation of the State's Private Option program for Medicaid expansion. A replacement has not been named.

Connecticut: Governor Restores $14 Million in Medicaid Funding to Small Hospitals

Connecticut Governor Dannel Malloy (D) announced plans to restore $14.1 million in funding to six independent hospitals several weeks after he cut $63 million in hospital Medicaid payments from the State’s budget. The cuts, which would have totaled more than $190 million with the added loss of federal matching funds, were met with harsh criticism from State legislators and hospital executives who continue to call for a Special Session to review the cuts and to restore full hospital funding. Restored funds are being reallocated from supplemental payment funds for the State's larger hospital groups.

Iowa: Department of Human Services Signs Medicaid Managed Care Contracts

As part of the State’s transition to Medicaid managed care for the majority of its 560,000 enrollees, Iowa’s Department of Human Services (DHS) signed contracts last week with four managed care organizations selected through competitive bidding in August: Amerigroup Iowa, AmeriHealth Caritas Iowa, UnitedHealthcare Plan of the River Valley, and WellCare of Iowa. DHS is moving forward with the transition to managed care on January 1, 2016, pending federal approval, despite protest from some State legislators over the pace of the transition and from some carriers that were not selected over the bidding process.

South Dakota: Governor Establishes Coalition to Study Medicaid Expansion

Governor Dennis Daugaard (R) has convened a group of State, health, and tribal officials, collectively called the Health Care Solutions Coalition, to study options for paying for the State’s share of a potential Medicaid expansion program, reports the Associated Press. The Governor is interested in offsetting the cost of expansion in part by increasing utilization rates of Indian Health Services, which are fully funded by the federal government. The Governor’s office reported that HHS Secretary Burwell expressed openness to the plan during a recent meeting.

Utah: Future of Medicaid Expansion Plan Is Uncertain Following First Public Hearing

The Utah Legislature’s Health Reform Task Force convened for the first public discussion of the recently-revealed “UtahAccess+” Medicaid expansion plan. While many advocates and supporters were present, the plan was met with fierce opposition from most of the 16 provider groups present at the meeting, who would face $50 million in collective special taxes and fees each year to support the implementation of UtahAccess+. A few provider groups, including the Utah Hospital Association, expressed general support for expansion but were hesitant to support the proposed taxes and fees. Significant public confusion remains over the sparse plan details that were released, which indicate that medically frail individuals would be enrolled in traditional Medicaid plans, while most low-income Utahns up to 138% of the federal poverty level (FPL) would be offered subsidies to help pay for private insurance. Those between 100%-138% of the FPL would be charged monthly premiums and copays. The House GOP caucus is deciding whether to hold a special session later this month to vote on the expansion plan, though Governor Gary Herbert’s (R) administration is fearful that support may be insufficient to move forward.

Wyoming: Budget Shortfall May Prompt Consideration of Medicaid Expansion

Governor Matt Mead (R) announced that Wyoming will likely face a $100 million to $200 million budget shortfall in the coming fiscal year, which could prompt legislators to reconsider expanding Medicaid in order to draw down federal funds to implement expansion. Governor Mead has instructed the Wyoming Department of Health to draft two budgets proposals, one with federal Medicaid expansion funds and one without, for lawmakers to consider during their budget session in early 2016, according to the Associated Press. However, Medicaid expansion attempts failed during Wyoming's previous legislative session, and opposition remains particularly strong in the House.

FEDERAL NEWS:

Privacy and Shopping Upgrades Planned for HealthCare.gov

HealthCare.gov is expected to have significant privacy and shopping enhancements for the next open enrollment period beginning on November 1, including a new tool called a privacy manager that allows consumers to opt in or out of third-party advertising, analytics, and social media on HealthCare.gov, Marketplace CEO Kevin Counihan announced last week. The Center for Consumer Information and Insurance Oversight also announced support for the “Do Not Track” browser setting, a feature used in web browsers to request web applications disable either their tracking or third-party web tracking. Consumers can also expect to use enhanced plan shopping tools, as reported by the Associated Press, including one that enables consumers to see if their preferred providers and medications are covered by a plan they are considering. Consumers will also be able to obtain an estimate of total expected out-of-pocket costs, including cost sharing for services such as office visits.

Issuers Will Receive 2015 Reinsurance Payments Early

CMS announced that it will make early payments under the reinsurance program for 2015 to health insurance issuers of eligible Qualified Health Plans (QHP). Reinsurance funds are intended to provide protection against claims uncertainty for the first three years of the Marketplace program. CMS is using experience from loading claims last year combined with a surplus of reinsurance funds from 2014 and additional collections for the 2015 benefit year to provide the payment early. The early payment will be a partial payment made in March 2016 at a coinsurance rate of 25%. The final coinsurance rate, which is estimated to be 50%, will be calculated based on total collections and requests from issuers, and is expected to be announced in June 2016. Payments not made as part of the early payment will be made in late 2016. This follows last week’s announcement that QHP issuers will receive 12.6% of their requested risk corridor payments.

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