Manatt on Health Reform: Weekly Highlights

Arizona seeks Medicaid Waiver to implement new coverage restrictions for Medicaid expansion enrollees and delivery system reform; Tennessee’s uninsured rate continues to drop; and Louisiana gubernatorial candidates line up behind Medicaid expansion.


Arizona: State Seeks Increased Cost-Sharing, Coverage Restrictions for Medicaid Expansion Population

Arizona Governor Doug Ducey (R) submitted a section 1115 Medicaid Waiver application describing the “AHCCCS CARE” Medicaid expansion program, which requires enrollees to pay up to 5% of income across co-payment and premium charges. Co-pays, capped at 3% of income, are paid monthly for services already obtained, including for services such as missed appointments, accessing specialists without a referral, and using brand name drugs when a generic is available to “strategically…steer members to the right care at the right setting.” Enrollees are also charged up to 2% of income (or $25 per month, whichever is less) as a monthly premium, which is deposited into an HSA-like “AHCCCS Care Account” to fund services not already covered, such as dental and vision. To use the Care Account, enrollees must have made timely payments, met at least one “healthy target” metric, and participated in an employment support or job training program administered by the Department of Economic Security. Failure to make these payments would result in disenrollment for six months for those with incomes over 100% FPL, while it would be considered a debt to the State for those with incomes under 100% FPL. The Waiver also proposes a number of delivery system reforms, including a Delivery System Reform Incentive Payment (DSRIP) model built on provider network accountability and a program to improve the quality of and access to care for the American Indian/Alaskan Native populations. If approved, the new Waiver would begin October 1, 2016 and run through September 2021.

Louisiana: Gubernatorial Candidates All in Favor of Medicaid Expansion

All four candidates on the ballot to replace staunch Medicaid expansion opponent Governor Bobby Jindal (R) expressed their support for Medicaid expansion during a televised debate, according to local media. Each of the three Republican candidates cited the State's financial deficit as a factor in their consideration of expansion, and said they would request a CMS waiver to pursue alternative expansion options. The Democratic candidate said he would pursue traditional expansion early in his term. The gubernatorial election will be held on October 24, with a runoff election on November 21 if no candidate receives a majority of votes. In June 2015, the State Legislature passed a new hospital assessment, supported by the Louisiana Hospital Association, that would help to fund the non-federal share of the expansion’s costs should the new governor expand Medicaid by April 2016.

Tennessee: Report Shows Decreased Uninsured Rates

A report released by the University of Tennessee Center for Business and Economic Research analyzing insurance status and use of medical facilities found that the State’s overall uninsured rate has continued its downward trend since 2013, now having fallen to 6.6%—the lowest rate in over a decade. The uninsured rate for children has also dropped to 1.5%, a full percentage point decrease since last year. Nine out of ten families that remain uninsured cited affordability as the main barrier to coverage. The report also found that 94% of TennCare—the State’s Medicaid program—head-of-households first sought care at a doctor’s office or clinic, as opposed to an emergency room, up from 90% in 2014. Lastly, 95% of TennCare beneficiaries remain either “somewhat satisfied” or “very satisfied” with the program’s quality of care; the satisfaction level has remained constant for a decade.

Utah: Latest Medicaid Expansion Plan Rejected

Utah House Republicans voted 56-7 against the latest Medicaid expansion plan “UtahAccess+”—just revealed publically last week—forcing the State Legislature back to the drawing board. According to House Speaker Greg Hughes (R), UtahAccess+ failed to gain enough support due to concerns about funding sustainability, growing costs, and active opposition from the provider community who opposed the use of provider fees to finance the State’s share. Just one day after this rejection, a different coverage expansion framework emerged from Governor Gary Herbert (R) and legislative leaders that focused more narrowly on extending coverage to uninsured, medically frail individuals under 100% FPL. A partial expansion would make Utah responsible for the State’s standard 30% of the program’s total costs instead of the enhanced match available for a full Medicaid expansion.


Kentucky: OIG Finds Marketplace Effective

In a recent audit, the Department of Health and Human Services' Office of Inspector General (OIG) found the Kentucky Marketplace to be “generally effective” in enrolling eligible individuals in Qualified Health Plans “according to Federal requirements.” Based on its review of 45 Kynect applications, OIG made some recommendations to improve internal operations, but noted that these deficiencies did not indicate improper enrollment. Kynect officials concurred with the findings and recommendations and took actions to address them.

Three More Co-Ops to Shut Down for 2016

State insurance co-ops in Colorado, Oregon and Tennessee announced they will shut down for coverage year 2016, with Colorado and Oregon having been ordered to do so by their State insurance oversight agencies. While Colorado’s co-op covers approximately 54% of the State’s Marketplace enrollees, Oregon’s and Tennessee’s both cover approximately 15%. Enrollees in these co-ops will be covered through the end of 2015 but must select a different insurer during the upcoming open enrollment period.


Colorado: Exchange Votes to Appoint Kevin Patterson Permanent CEO

The Connect for Health Colorado Board voted to make Kevin Patterson the Exchange's permanent CEO, having served as the interim CEO since April. Following a two-week public comment period, the Colorado Health Insurance Exchange Oversight Committee, which consists of five State senators and five State representatives, must approve Mr. Patterson's nomination.

Missouri: Acting Director of Department of Health and Senior Services Appointed

Governor Jay Nixon (D) appointed Peter Lyskowski Acting Director of the Missouri Department of Health and Senior Services, following previous Director Gail Vasterling's move to General Counsel at the Department of Mental Health. Lyskowski will serve as Acting Director of the department until a permanent director is named.


HHS Estimates Modest Increase in Marketplace Enrollment to 10 Million by End of 2016

A Department of Health and Human Services (HHS) report estimated that 9.4 million to 11.4 million individuals will effectuate Marketplace coverage by the end of 2016, representing a potential modest increase from the most recent total of 9.9 million Marketplace enrollees. Built into this estimate was the following: (1) of the 9.1 million current enrollees, 7.3 million to 8.8 million will make re-enrollment plan selections during the upcoming open enrollment; (2) of the 10.5 million uninsured individuals who are likely eligible for QHP coverage, 2.8 million to 3.9 million will make plan selections; and (3) 0.9 million to 1.5 million individual market enrollees (currently off of the Marketplace) will make plan selections. While HHS estimates between 11 million and 14.1 million total plan selections in the 2016 open enrollment period, the effectuated enrollment estimate is approximately 10 million. Effectuated enrollment is expected to be lower than total open enrollment plan selections as some enrollees obtain coverage from other sources and others have their coverage terminated due to non-payment or data matching issues.

HHS Releases Report Detailing the Remaining QHP Eligible Uninsured

Separate from HHS’s Marketplace enrollment estimates, the agency released a report examining the composition of the 10.5 million uninsured individuals who may be eligible to purchase insurance coverage through a Qualified Health Plan. When analyzing income of the remaining QHP-eligible uninsured, the report found that 48% have incomes between 100% and 250% of the federal poverty level (FPL), 30% have incomes between 250% and 400% FPL, and 22% have incomes above 400% FPL. The agency’s estimate of approximately 8.2 million uninsured individuals who may be eligible for subsidies tracks closely to the Kaiser Family Foundation report also released this week, which estimates this population to be 7.1 million. The greatest barrier to obtaining health insurance for most of the uninsured QHP-eligible was affordability concerns. Nearly 80% of people without health insurance have less than $1,000 in savings and nearly 50% have less than $100 in savings. Approximately 3 in 5 of QHP-eligible uninsured individuals did not understand or were unaware of the premium tax credit.

Report Finds 15 Million Uninsured Individuals Likely Eligible for ACA Assistance

Of the 32.3 million total uninsured, 15.7 million may be eligible for either Medicaid or subsidized Marketplace coverage, according to a new report by the Kaiser Family Foundation. Of the total uninsured individuals eligible for ACA assistance: 7.1 million individuals are eligible for Marketplace premium tax credits, 5.4 million adults are eligible for Medicaid, and 3.2 million children are eligible for Medicaid or CHIP. The report estimates that of the remaining 16.6 million uninsured not eligible for ACA assistance: 4.9 million are undocumented immigrants ineligible for ACA coverage, 4.9 million are ineligible for financial assistance due to an offer of employer sponsored insurance, 3.7 million have an income above the limit for premium tax credits, and 3.1 million fall into the coverage gap.

72 Million Individuals Enrolled in Medicaid and CHIP

According to CMS's monthly Medicaid/CHIP eligibility and enrollment report, 72 million individuals were enrolled in Medicaid and CHIP in July 2015, an increase of just over 28,500 individuals since June 2015. Since October 2013, nearly 13.2 million additional individuals have enrolled in Medicaid and CHIP, an increase of almost 22.9% over the average monthly enrollment for July through September of 2013. Compared to this 2013 timeframe, Medicaid expansion states have seen an average increase in enrollment of 30%, while states that have not expanded reported an average increase of 9.9%.



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