Manatt on Health Reform: Weekly Highlights

CMS seeks input on potential market stabilization rulemaking; Iowa proposes a single standardized Marketplace plan and reinsurance program; and Centene will expand its Marketplace offerings for 2018, including adding new states.


AHCA Transmitted to Senate but Further Reconciliation Requirements Remain

A statement from the Senate Budget Committee confirmed that the House-passed version of the AHCA meets reconciliation requirements to allow the Senate to consider the reconciliation bill. This does not mean that all AHCA provisions comply with the “Byrd rule,” or other Senate reconciliation requirements, but clearing this initial procedural hurdle will allow the Senate to consider ACA repeal and replace legislation under reconciliation rules. Bills considered under the budget reconciliation process require only a simple majority vote to pass the Senate but points of order can be raised if the bill does not comply with reconciliation instructions, which can prevent consideration of the bill entirely or individual provisions deemed to be "extraneous" (i.e., not primarily budget related) by the Senate parliamentarian to be struck without 60 votes. As the Senate develops its own legislation, it will continue evaluating AHCA provision—as well as any new provisions developed in the Senate—to ensure that the Senate’s version of the legislation complies with reconciliation rules.

AHCA Would Reduce Mental Health and Substance Use Disorder Coverage

An Urban Institute brief finds that the AHCA would reduce access to mental health and substance use disorder (SUD) services. Under the House version of the AHCA, states that waive essential health benefits may choose to not cover mental health or SUD treatment, eliminating the need for compliance with parity protections, which only apply to plans with mental health or SUD benefits. The AHCA also phases out Medicaid expansion and caps Medicaid funding, which would reduce the number of adults with access to coverage, including mental health benefits. Eliminating Medicaid expansion would also reduce access to buprenorphine, an effective treatment for opioid use disorder, according to a separate brief from the Urban Institute.

Medicaid Funding Cuts and Expansion Phase-Out Would Disproportionately Impact Rural Areas

The AHCA’s Medicaid funding cuts and phase-out of Medicaid expansion would disproportionately impact individuals living in rural areas and small towns, according to a report from Georgetown University and the University of North Carolina. Under Medicaid expansion, uninsurance in rural areas dropped 11 percentage points compared to 9 percentage points in metropolitan areas between 2008 and 2015.

AHCA Would Increase Uninsurance Among Adults Age 50-64, Lead to Higher Medicare Costs

The number of uninsured adults age 50-64 with incomes below 200% of FPL would be 150% higher under the AHCA in 2026, according to a Kaiser Family Foundation brief. The loss of coverage among adults age 50-64 could result in higher Medicare costs, as individuals may delay services until they enroll in Medicare at age 65.


CMS Clarifies New Verification Requirements for Special Enrollment Periods

CMS has released guidance describing the new process for pre-enrollment verification of Marketplace special enrollment period (SEP) eligibility, which will take effect on June 23 for applicants claiming SEP eligibility due to loss of minimum essential coverage or for a permanent move. Applicants will now have 30 days to provide documentation verifying eligibility and will be enrolled in coverage once this is complete. Some applicants may be eligible for retroactive coverage, however most will have their applications “pended” until documentation is verified. In comparison, the current verification process provides consumers with provisional eligibility pending verification and up to 95 days to submit required documentation.

CMS Requests Comments on Potential Market Stabilization Regulation

CMS issued a request for information as it considers regulatory options that would promote “consumer choice,” help stabilize the individual and small group insurance markets, “enhanc[e] affordability,” and affirm states’ regulatory authority. The request is pursuant to the executive order issued by the Trump Administration on inauguration day calling on HHS and other agencies charged with implementing the ACA to minimize the law’s “economic and regulatory burdens.”

CMS Releases 2017 Effectuated Enrollment Snapshot

Approximately 10.3 million people effectuated their 2017 Marketplace coverage by paying their first premium as of March 15—1.9 million failed to effectuate their coverage. The percentage of people that paid their first month’s premium is in line with previous years (84% in 2017 compared to 87% in 2016). To date, approximately 84% of individuals with effectuated coverage in 2017 are receiving advance premium tax credits and around 57% are receiving cost-sharing reductions. 

Insurers Continue to Decide Where They Will Offer Coverage and the Size of Proposed Rate Increases

While insurers filing for 2018 Marketplace coverage in Maine, New York, and Washington requested increased premiums or dropped coverage, insurer Centene signaled it will enter new markets and expand offerings in several states.

  • Multiple States: Centene will offer 2018 Marketplace plans for the first time in Kansas, Missouri and Nevada, and will expand its offerings in Florida, Georgia, Indiana, Ohio, Texas and Washington. The insurer acknowledged continued uncertainty on healthcare legislation, noting it is “working closely with regulators and policymakers to collaborate on the actions that stabilize the market.”
  • Maine: Harvard Pilgrim, one of three remaining insurers on the State Marketplace, has requested a 40% rate increase, citing higher costs and market instability.
  • New York: Plan premium increase requests for the 2018 coverage year on New York's Marketplace ranged from 4.4% to 47.3%. Insurers estimated that the loss of cost-sharing reduction payments would increase rates by an average of 1.3%.
  • Washington: Two rural counties may have no individual Marketplace insurance options in 2018, affecting approximately 3,000 people. State officials blame the lack of options on “chaos and uncertainty” at the federal level and are urging health insurers to offer coverage in the two counties.

Iowa: Waiver Proposal Seeks to Create a Single Standardized Marketplace Plan, Establish Reinsurance Program

Iowa released a $352 million 1332 waiver proposal to restructure ACA premium subsidies to the benefit of younger and higher income enrollees, establish a standard silver plan, and implement an $80 million reinsurance program. The new silver plan would cover the ten essential health benefits and would be the only plan in the State’s individual market beyond those available for people already in grandfathered or other transitional (grandmothered) plans. Wellmark Blue Cross Blue Shield, which announced in April that it would not sell non-transitional individual market plans in 2018, said that it would reverse that decision if the waiver is approved.


House CHIP Reauthorization Hearing Scheduled for June 14

The House Energy and Commerce Subcommittee on Health will hold a hearing on June 14 to discuss CHIP and community health center funding extensions, which are set to expire on September 30. The Committee will hear testimony from Cindy Mann, a partner with Manatt Health; Michael Holmes, CEO of Scenic Rivers Health Services; and Jami Snyder, Associate Commissioner for Medicaid/SCHIP Services in Texas.

Cost-Sharing and HSAs in Medicaid May Increase Administrative Burden Without Reducing Long-Term Spending

A pair of briefs from the Vanderbilt School of Medicine compiles evaluation results and identifies best practices from three states (Indiana, Arkansas and Michigan) that used 1115 waivers to implement cost-sharing, payment enforcement mechanisms, healthy behavior programs, and health savings accounts in Medicaid. The authors note that in some states, administrative costs of implementing cost-sharing outweigh new revenues, and cite studies that found enrollees delay necessary care in response to cost-sharing, resulting in higher healthcare spending in the long term.

Illinois: State Ordered to Make Medicaid Payments Despite Budget Stalemate

A federal judge ordered the State to increase the pace of reimbursement payments to Medicaid providers required under an existing court order put in place to ensure the State pays providers despite the lack of a state budget. Lawyers for Medicaid patients and providers argued that failing to increase the pace of payment would lead to providers discontinuing service to Medicaid patients. The judge ordered the lawyers for the State and those representing Medicaid recipients to "negotiate with the goal of achieving substantial compliance with the consent decrees" by June 20. Illinois's backlog of all unpaid bills (including Medicaid) reached $14.9 billion last week. 

Wisconsin: Revised Medicaid Waiver Submission Modifies Premium and Drug Testing Proposals

Wisconsin submitted an amended 1115 waiver application to CMS after receiving more than 1,000 public comments on the original proposal. The final application to CMS would: impose an $8 premium on those earning 50%-100% of FPL, rather than the previously-proposed sliding scale premiums for those earning above 20% of FPL; permit beneficiaries to forego mandatory drug testing if they indicate willingness to enter drug treatment; and, eliminate the proposed six-month lockout period following a positive drug test, contingent upon participation in drug treatment. The State did not modify its proposed work requirements, six-month lockout for failure to pay premiums, or 48-month limit on Medicaid enrollment.


Arizona: Governor Declares State of Emergency in Response to Opioid Epidemic

Governor Doug Ducey (R) declared a statewide opioid overdose health emergency, allowing Arizona to better coordinate public health efforts, and directed the Department of Health Services to initiate emergency rulemaking regarding opioid prescribing and treatment and develop enhanced guidelines and training for providers and law enforcement. The declaration comes after new data found that 790 Arizonans died from opioid overdoses in 2016 and overdoses have increased 74% over the past four years.

Connecticut: Legislation Combatting Opioid Addiction Sent to the Governor for Signature

The Senate and House passed legislation that increases data sharing between State agencies regarding opioid abuse and overdose deaths and permits registered nurses employed by home health care agencies to dispose of unused prescription medications. The legislation also increases security of controlled substance prescriptions and introduces a voluntary non-opioid form for patients who do not want to be prescribed or administered opioid drugs. Governor Dannel Malloy (D), who proposed the legislation earlier this year, is expected to sign the bill.


Trump Administration Nominates HHS General Counsel

The Trump Administration has nominated Robert Charrow to be General Counsel of HHS. Mr. Charrow is currently a principal shareholder in the Washington, D.C. law firm Greenberg Traurig, LLP, and previously served as Principal Deputy General Counsel at HHS during the Reagan Administration.



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