HHS announces average premium price increases of 7.5% across HealthCare.gov; Michigan and Illinois launch the country’s first joint cloud-based, real-time Medicaid information management system; and the Marketplace carrier shake-up continues.
FEDERAL & STATE MARKETPLACE NEWS:
Federally-Facilitated Marketplace Benchmark Plan Rates to Increase 7.5%
Marketplace benchmark plans—the second-cheapest silver plan available in states that use the HealthCare.gov platform—will see an average price increase of 7.5% for coverage year 2016, though rate changes will vary dramatically from state to state. Reported rate changes do not take into account advanced premium tax credits, which lower monthly costs for the “overwhelming majority” of Marketplace consumers, and which are determined using benchmark plan prices. After tax credits, about 8 out of 10 returning HealthCare.gov customers will be able to buy a plan for less than $100 a month, and about 7 out of 10 returning customers will be able to buy a plan for less than $75 a month. Premium increases will be in the single digits for most consumers, according to Kevin Counihan, the CEO of HealthCare.gov. CMS also found that HealthCare.gov customers who changed plans within the same metal tier between 2014 and 2015 saved an average of nearly $400 after tax credits, compared to those that stayed in their same plans.
Some HealthCare.gov Functionalities Launching Early, While Others Delayed
Window shopping for 2016 plans, which launched one week before the start of the open enrollment period, allows consumers to see estimates of total yearly costs including premiums, deductible, copayments, and other costs based on how much medical care an individual or family will use. New HealthCare.gov functionality that will enable consumers to look up whether a prescription drug is covered or their doctor is in a particular plan's network may be delayed, as reported by The New York Times. Because the insurance industry reported issues with the accuracy of the data used for the new HealthCare.gov tools, the new functionality will launch when HHS is confident with the data provided by the insurers. No specific date has been given.
Kansas: Insurer Covering Half of Marketplace Enrollees Withdraws for 2016
Coventry will not offer health plans on Kansas’s Federally-facilitated Marketplace for coverage year 2016, though it will continue to offer plans outside of the Marketplace. Approximately 45,000 Kansans, or 53% of Marketplace enrollees, will be required to select new coverage either off the Marketplace or from one the Marketplace’s four remaining insurers, including new entrant United Healthcare.
South Dakota: Carrier to Exit Marketplace, Two Remain
DakotaCare announced that it will not offer individual plans through the State's Federally-facilitated Marketplace for coverage year 2016 due to sustainability concerns, leaving Avera Health Plans and Sanford Health Plan as the two remaining carriers. DakotaCare issued approximately 33% of the State’s individual Marketplace policies for 2015. Following this announcement, South Dakota’s carriers confirmed their rate increases for 2016. Rate hikes average approximately 13% for Avera and Sanford’s individual plans sold on and off the Marketplace, while DakotaCare and Wellmark—the State’s other major insurer off the Marketplace—averaged increases that range up to 63% and 43%, respectively.
MEDICAID REFORM UPDATES:
California: State Reduces Size of Medicaid Waiver Request by $10 Billion
The California Department of Health and Human Services reduced the size of its section 1115 Medicaid waiver request from $17 billion to $7.25 billion, according to the Legislative Analyst's Office, the State Legislature’s nonpartisan policy and fiscal advisor. The State is negotiating with CMS over the scope and scale of the waiver request, and while details regarding the reduction in proposed funding are not yet available, the key components of the waiver request that remain include funding for: a public hospital incentive program, a “whole-person care pilot,” improvements to dental health programs, and caring for the remaining uninsured. CMS is expected to make a final decision on the waiver request by October 31, when the State's current 1115 "Bridge to Reform" Medicaid waiver expires.
Michigan & Illinois: States Partner to Launch Nation’s First Cloud-Based Medicaid Management Information System
The Michigan Department of Health and Human Services (DHHS) announced the rollout of the country’s first automated, real-time, cloud-enabled Medicaid Management Information System (MMIS), a pioneer program developed with Illinois and designed to improve healthcare delivery and reduce costs. The new system is the result of a two-year, multi-agency collaboration between Michigan, Illinois and their vendor to build a platform that allows for the exchange of real-time secure claims data across state lines and accommodates evolving state and federal regulations. Allowing multiple states access to a single MMIS reduces costs for individual states by enabling resource pooling. Additionally, cloud-based technologies are known for reducing costs compared to traditional software systems by eliminating licensing, storage, development and ongoing maintenance costs.
MORE FEDERAL NEWS:
GAO Releases Multiple Reports Assessing Medicaid and Marketplace Eligibility and Enrollment
One of three Government Accountability Office (GAO) reports recently released on eligibility and enrollment in Medicaid and the Marketplaces found that CMS policies and procedures do not adequately minimize the potential for gaps in coverage when people churn between these sources of coverage nor sufficiently prevent consumers from being inappropriately enrolled in both sources of coverage. A second GAO report found that CMS is not reviewing the accuracy of Medicaid eligibility determinations in states that have delegated this authority to the federal government, creating a gap in the agency’s efforts to ensure only eligible individuals are enrolled and that state expenditures are correctly matched by the federal government. CMS agreed with GAO’s recommendations across both of these reports to address the findings. Finally, GAO released preliminary results from “undercover testing” of Federal and selected State-based Marketplaces, which indicated that fictitious applicants were able to enroll in Marketplace coverage; a final report is forthcoming.
Three States File Affordable Care Act Lawsuit
Texas, Kansas, and Louisiana have filed a lawsuit against the Department of Health and Human Services and the Internal Revenue Service challenging the constitutionality of requiring for-profit Medicaid and CHIP managed care organizations to pay the ACA’s Health Insurance Provider Fee. The plaintiffs claim that the fee is passed on to states that are coerced into payment because failure to do so would result in a loss of federal Medicaid funding. The lawsuit cites NFIB v. Sebelius, the 2012 Supreme Court decision that ruled the federal government could not coerce states to expand Medicaid.
HHS Announces $23 Million in Planning Grants for Behavioral Health Clinics
The Department of Health and Human Services awarded $22.9 million in grants to help states develop a prospective payment system (PPS) for behavioral health services that emphasizes high quality and evidence based practices. Specifically, the grants provide funding for states to certify community behavioral health clinics, establish the PPS for Medicaid reimbursable services, prepare an application to participate in the second phase of the grant, and engage with stakeholders. When the planning grant ends in October 2016, awardees will have the opportunity to apply for a two-year demonstration that will begin January 2017 to test the PPS by receiving federal matching funds. Under the demonstration program, no more than eight states with certified behavioral health clinics will be paid using an approved prospective payment system.
STATE STAFFING NEWS:
Alabama: New Head of Department of Public Health Named
The Alabama State Committee of Public Health appointed Dr. Tom Miller the acting State Officer for the Department of Public Health. Dr. Miller will replace Dr. Don Williamson, who is stepping down at the end of the month to become the President of the Alabama Hospital Association.