Manatt on Health Reform: Weekly Highlights

CMS permits states to use income information from other means-tested benefit programs for Medicaid eligibility determinations; Alaska’s Medicaid expansion is given the green light to launch today; and Washington State submits its Medicaid Transformation Waiver to CMS.

FEDERAL NEWS:

CMS Allows States to Use Other Benefit Programs’ Income for Medicaid Eligibility Determinations

CMS announced in a letter to State Health Officials that it will allow states to use gross income information from the Supplemental Nutrition Assistance Program (SNAP) or other means-tested benefit programs, such as Temporary Assistance for Needy Families (TANF), to support Medicaid income eligibility determinations without obtaining waiver approval. States may receive approval for a state plan amendment to do so at application and renewal for those “who are certain to be income-eligible under Modified Adjusted Gross Income (MAGI)-based methodologies,” the criteria for which is further defined in the SHO letter. CMS notes that states may not automatically enroll this individual in Medicaid but must check if he/she is already enrolled in Medicaid and explain how it will obtain the minimum requirements for an application for Medicaid, verify his/her citizenship status, provide all rights associated with a Medicaid eligibility determination, explain how it will obtain additional necessary information, and affirm its ability to comply with Medicaid reporting requirements.

CMS Posts 2017 Benchmark Plans for Public Comment

CMS has posted states’ proposed selections for their essential health benefits (EHB) benchmark plans for 2017, the majority of which are based on a plan sold in the small group market in 2014. The posting includes the summary of benefits and coverage and supporting plan documents providing detail on plan coverage, limits and exclusions for each state benchmark plan for 2017. Comments are due on September 30th, 2015.

CMS Announces 2016 Reenrollment Processes for FFM Issuers

CMS released guidance for health insurance issuers in the Federally-facilitated Marketplaces (FFMs) on the 2016 redetermination and re-enrollment process. Consistent with previous guidance, health insurance issuers are encouraged to conduct outreach to enrollees who will have advance payments of the premium tax credit or cost sharing reductions discontinued during the re-enrollment process because they have: not reconciled their taxes, not provided the Marketplace authorization to access tax return information, or have updated tax return information with a household income above 500% FPL. Specifically, issuers are provided talking points for helping consumers who have not yet reconciled their previous year’s tax credits with the IRS to file the appropriate tax forms to do so.

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 June 2015, an increase of 292,000 individuals since May 2015. Since October 2013, nearly 13.1 million additional individuals have enrolled in Medicaid and CHIP, an increase of almost 23% 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 29.7%, while states that have not expanded reported an average increase of 9.8%.

New Report Finds "Cadillac Tax" Estimated to Impact a Quarter of Employers

In 2018, an estimated 26% of employers who offer health insurance to employees will be subject to the Affordable Care Act's high cost plan tax (HCPT), also known as the Cadillac Tax, according to a new report by the Kaiser Family Foundation. However, if employers stopped offering a Flexible Savings Account before that time, only 16% of employers would be impacted. If employers make no changes to their plan over the following decade, the percentage of employers impacted is expected to rise to 42% due to the cost of health care expenditures outpacing inflation. The authors conclude that the Cadillac Tax may cause employers to modify their health benefit offerings and reduce employee choice.

STATE MEDICAID ACTIVITY:

Alaska: Supreme Court Allows Medicaid Expansion to Proceed

Alaska's Medicaid expansion launched today, after the State's Supreme Court rejected the Legislature's request for a temporary restraining order or injunction to halt Governor Bill Walker's (I) plans for expansion. The Supreme Court's ruling came after a Superior Court judge also rejected the Legislature's request. Both courts' rulings only addressed the requested injunction and did not offer full legal opinions on the case. Alaska House and Senate leadership said their request for an injunction was only the first step in their legal challenge but did not announce their future plans.

Arizona: Court Rules Hospital Assessment Not a Tax, Upholds Medicaid Expansion

A Maricopa Superior Court judge ruled that Arizona’s Medicaid expansion plan was passed legally, concluding that the expansion’s financing mechanism, a hospital assessment, was not a tax and therefore did not require a two-thirds supermajority vote in the Legislature, reports the Arizona Capitol Times. The judge explained that the assessment is transaction-based and dependent upon each hospital’s number of discharge patients and imposed by the Arizona Health Care Cost Containment System, not the Legislature itself. The plaintiffs have indicated they plan to appeal the decision.

Arkansas: Report Indicates Private Option Performing Well Across Indicators

The Arkansas “Private Option” Medicaid expansion has lowered the State’s uninsured rate by almost half, reduced premiums due to increased Marketplace competition, decreased hospitals’ uncompensated care costs, and improved beneficiary access to care, according to a new report by the Kaiser Family Foundation, co-authored by Manatt. In 2013, Arkansas was the first State to receive federal approval to enroll individuals newly eligible for Medicaid under the Affordable Care Act into Marketplace plans with premium assistance. Early data indicate that the Private Option provides coverage to 220,000 individuals and is projected to meet federal budget neutrality requirements. Interviews with State officials, providers, insurance carriers and advocates reveal that early, close coordination between State officials and stakeholders during implementation was a large factor in the program’s success.

Massachusetts: Delayed Medicaid Redeterminations Lead to Coverage Terminations

State officials at MassHealth, the State’s Medicaid agency, have ended coverage for more than 200,000 people as part of the redetermination process the agency initiated in January of 2015, reports Masslive.com. Though states are required to redetermine enrollees’ eligibility annually, a technical glitch prevented the Massachusetts Health Connector from conducting redeterminations between October 2013 and this year. According to data from early August, more than half a million beneficiaries have been contacted for updated information to demonstrate eligibility; approximately 80% have responded, and of those who submitted complete information, approximately 83% (just fewer than 300,000 people) were determined eligible for continued Medicaid. By the end of the year, the agency will have reached out to an additional 260,000 individuals, and Governor Charlie Baker's (R) administration estimates a total savings to Medicaid of $400 million.

Washington: State Submits Medicaid Transformation Waiver Application to CMS

Washington's Health Care Authority and Department of Social and Health Services submitted an 1115 waiver proposal to CMS, requesting $3 billion to support Medicaid payment and delivery system reform between 2017 and 2021. The proposal aims to improve population health, encourage the transition to value-based payment, reduce avoidable hospital use and maintain Medicaid per-capita cost growth at 2 percentage points below the national average. If approved, the initiative would complement other payment and delivery system reform initiatives in Washington, including a State Innovation Model (SIM) grant to build “accountable communities of health,” partnerships in local communities focused on social determinants of health, and an effort to integrate Medicaid purchasing for physical and behavioral health. In its application, the State said it hopes to reach agreement on terms and conditions with CMS by April 2016, with a proposed January 2017 start date for the waiver demonstration.

STATE MARKETPLACE NEWS:

States’ Premium Rates Announced

States have begun releasing approved carriers and premium rates for the 2016 coverage year. To see recent state announcements, follow these links: Arkansas, Florida, Idaho, Iowa, Michigan, Vermont and Washington.

Nevada: Health CO-OP to Cease Operations

Nevada Health CO-OP, the State's only consumer oriented and operated health plan (CO-OP), announced it will close at the end of 2015 because of financial difficulties. The CO-OP reported losses of $22.7 million between January and June 2015 after posting additional losses in 2014, according to the Las Vegas Review Journal. Current members will still receive services through December 31st but must select new coverage beginning January 2016 during the upcoming open enrollment period. Acting Commissioner Amy Parks said that despite Nevada Health CO-OP's exit, Nevada's individual and small-group markets will remain competitive, with 13 carriers offering individual plans and 14 offering small group plans.

New Mexico: Blue Cross Blue Shield of New Mexico Exiting Marketplace for 2016

The leading insurer in the New Mexico Health Insurance Exchange, Blue Cross Blue Shield of New Mexico (BCBSNM), will stop offering coverage beginning in 2016 because it did not receive approval from the Office of the Superintendent of Insurance (OSI) on requested premium rates. In a letter to enrollees, BCBSNM noted that it lost $19.2 million on its individual market enrollees in 2015, but will continue to offer coverage to these 35,000 customers until the end of the year. Enrollees will be required to transition to new coverage beginning in 2016. Next year, the Exchange will have four carriers and BCBSNM plans to offer an individual product off-exchange.

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