Manatt on Health Reform: Weekly Highlights

Senate health reform bill to be made public Thursday; CMS Actuary releases its AHCA coverage and cost projections; and new analysis finds Marketplace rate increases are being driven by the Trump Administration’s lack of commitment to making cost-sharing reduction payments.


Senate Repeal and Replace Bill Expected Thursday, Vote Anticipated Next Week

Senate Majority Leader Mitch McConnell (R-KY) said a “discussion draft” of an ACA repeal and replace bill will be released on Thursday and brought to the floor next week following scoring from the Congressional Budget Office.

CMS Actuary Analysis of AHCA Estimates Coverage Losses of 13 Million

CMS’s Office of the Actuary estimates that the AHCA would increase the number of uninsured relative to the ACA by 12.6 million and reduce the federal deficit by $328 billion by 2026. Earlier this month, CBO estimated that 23 million individuals would lose their insurance by 2026 and federal spending would decrease by $119 billion due to the AHCA. The differences in estimates are driven by differences in assumptions about key features of the bill, such as the percentage of states that would choose to implement waivers of insurance regulations under the MacArthur Amendment, according to an analysis of the two reports published in Health Affairs. For example, the Office of the Actuary predicts 25% of states would waive community rating or essential health benefits, while the CBO expects 50% of states would implement such waivers.

Bipartisan Group of Governors Pens Letter Opposing AHCA

A group of seven Republican and Democratic governors—John Kasich (R-OH), Steve Bullock (D-MT), Brian Sandoval (R-NV), John Bel Edwards (D-LA), John Hickenlooper (D-CO), Charles Baker (R-MA), and Tom Wolf (D-PA)—sent a letter to the Senate in opposition to the AHCA, saying that it “calls into question coverage for the vulnerable” and shifts “significant costs” to the states. The letter also calls the AHCA’s Medicaid provisions “particularly problematic” and suggests Congress should instead focus on improving the private health insurance system. Governor Kasich has separately stated that  a gradual phase-out of the Medicaid expansion would be “acceptable” to him if Congress granted states additional funds and flexibility to manage their Medicaid programs.

House Passes Three Targeted Repeal and Replace Bills

The House last week passed three narrowly focused healthcare bills that are part of Republicans’ overall ACA repeal and replace strategy. The first bill (H.R. 2372) passed by a voice vote and would amend the AHCA to allow veterans who are eligible for but not enrolled in Department of Veterans Affairs coverage to qualify for Marketplace premium tax credits. The second (H.R. 2579) passed with 41 votes from Democrats and would permit AHCA tax credits to be used for purchasing COBRA plans. The third (H.R. 2581) passed with seven votes from Democrats and would require confirmation of eligibility and residency status by the Social Security Administration or Department of Homeland Security for individuals seeking Marketplace premium tax credits.

Prominent Advocacy Groups Launch Campaign Against AHCA

A coalition of eight prominent advocacy organizations announced last week they will host a series of events in Colorado, Ohio, Nevada, and West Virginia addressing what the coalition views as key shortcomings of the AHCA. Participating organizations include AARP, the American Cancer Society Cancer Action Network, American Diabetes Association, American Heart Association, American Hospital Association, American Medical Association, Federation of American Hospitals, and March of Dimes. 

AHCA Would Eliminate Nearly One Million Jobs

The AHCA would lead to 924,000 jobs lost by 2026, mostly in the healthcare sector, and business output would be $148 billion less, according to estimates from The Commonwealth Fund. New York, Pennsylvania, and Florida would have the highest numbers of jobs lost (between 83,000 and 86,000), and the downward economic trend would continue beyond 2026. The report also provides state-by-state estimates of data on how the AHCA would impact employment levels, health sector employment levels, gross state product, and business output (in dollars).

Approximately 75% of Non-Group Plans Did Not Cover Maternity Benefits Pre-ACA

Large percentages of non-group plans did not cover delivery and inpatient maternity care (75%), inpatient or outpatient behavioral healthcare (38%), or inpatient or outpatient substance use disorder services (45%) prior to the ACA, according to a Kaiser Family Foundation analysis of more than 8,000 pre-ACA plans. The analysis is an indication of how insurers may respond if states waive the ACA’s essential health benefits protections under the AHCA. 

Interactive Map Highlights State-by-State Medicaid and Marketplace Enrollment and Spending

A new map from the Kaiser Family Foundation provides detail on Medicaid and Marketplace enrollment, federal spending on Medicaid and advanced premium tax credits, and coverage gains in each state. The resource also estimates the number of non-elderly adults with pre-existing conditions whose coverage may be impacted under the AHCA’s MacArthur Amendment, which would permit states to waive the ACA’s essential health benefits.

Montana: State Could Lose $4.8 Billion in Federal Funds and Coverage for 70,000 Montanans Under AHCA

More than 70,000 Montanans would lose health coverage and the State would lose $4.8 billion in federal Medicaid funding over the next 10 years under the House-passed version of the AHCA, according to a Montana Healthcare Foundation analysis prepared by Manatt Health. Medicaid funding cuts would expose Montana financially to unanticipated spending pressures such as public health crises. The analysis also suggests the AHCA’s deep cuts could have a “ripple effect” on other key State priorities including education and infrastructure.


2018 Marketplace Rate Increases Driven by Uncertainty Over CSR Payments and Individual Mandate

Up to two-thirds of 2018 Marketplace rate increases will be attributable to the Trump Administration’s lack of clarity on funding for cost-sharing reduction (CSR) payments and enforcement of the individual mandate, according to an analysis by Oliver Wyman. The elimination of CSR payments are predicted to increase rates 11%-20%, and non-enforcement of the individual mandate are expected to increase rates by 9%.

Marketplace Issuers Continue Filing 2018 Rates in Advance of Wednesday Deadline

Medica will offer plans statewide in Iowa, Delaware’s only Marketplace plan requests large premium increases, and Florida’s largest insurer announced it will remain in the Marketplace. Meanwhile, the filing deadline is June 21.

  • Arizona: Blue Cross Blue Shield of Arizona and Centene's Ambetter from Health Net—the only two plans currently offering Marketplace products—each declared their intent to continue selling plans next year. Blue Cross Blue Shield indicated that rate increases will not be “at the significantly high levels” seen in the past few years.
  • Delaware: Highmark, the State’s only Marketplace plan, requested a 33% premium increase. The increase assumes that cost-sharing reduction subsidies and the individual mandate will not be in place next year.
  • Florida: Florida Blue, the State’s largest insurer, will remain in the Marketplace in 2018, along with Molina and Centene, which is expanding its Marketplace offerings. Florida Blue offers Marketplace plans in all 67 counties in the State, providing coverage to one million of the State’s 1.7 million Marketplace enrollees.  Florida Blue is also the sole provider in several mostly rural counties. Marketplace insurers requested a 17.8% rate increase, which is nearly identical to last year’s rate change.
  • Iowa: Medica has announced that it will continue selling policies statewide in 2018, but has requested a 43.5% rate increase. Medica was the only carrier to file proposed rates for 2018 by the June 19 deadline. Wellmark Blue Cross Blue Shield and Aetna announced they would leave the Marketplace in April, though Wellmark said it will reverse its decision if Iowa’s 1332 waiver proposal to create a single standardized Marketplace plan is approved.
  • Nevada: Aetna filed its 2018 Marketplace rate requests after the State implemented a policy that gives insurers extra points in the Medicaid bidding process if they participate in the State’s Marketplace. The insurer, however, also noted that the rate filing was made “based on a contractual obligation” and “no final decision on [Aetna’s] participation has been made." Aetna had previously announced it would withdraw from all Marketplaces for 2018.
  • New Mexico: Four insurers have filed proposed 2018 rates to sell individual policies on the State-based Marketplace. One insurer, New Mexico Health Connections, has proposed a nearly 80% premium increase for individuals.

District of Columbia: Marketplace Extends 2018 Open Enrollment Period Through January

The DC Health Benefit Exchange Authority has extended its 2018 open enrollment period to January 31, 2018, six weeks beyond the recently shortened 2018 open enrollment period. States utilizing State-based Marketplaces may choose to supplement the shortened open enrollment period with a transitional special enrollment period for the 2018 plan year.


Changing Caseload Mix Reduced Average Per Enrollee Medicaid Spending in Expansion States

Per enrollee Medicaid spending decreased by approximately 5.1% in expansion states from 2013 to 2014, as enrollment of lower-cost expansion adults increased relative to more costly aged, blind and disabled enrollees; per enrollee spending increased by 5.1% in non-expansion states, according to an analysis of CMS’s latest National Health Expenditures Data. On average, states spent $10,986 per Medicaid enrollee in 2014, with significant variation between the highest spending state (New Jersey at $12,614) and the lowest spending state (Montana at $8,238). Total Medicaid spending increased 12.3% in expansion states and 6.2% in non-expansion states.

Health Affairs Blog Post Considers Care Improvement Models for Dual Eligibles

A new Health Affairs blog post from Manatt partner Cindy Mann and Bipartisan Policy Center senior advisor Avik Roy explores “common ground” state and federal approaches to improving care and lowering costs for the 11 million Medicare enrollees that are also eligible for Medicaid (“dual eligibles”). The blog post reviews several models that have successfully improved quality and reduced costs for this population, including Medicare’s Program of All-Inclusive Care for the Elderly (PACE) and Medicare Advantage Special Needs Plans, a managed care program that provides acute-care services and long-term services and supports under separate Medicare and Medicaid contracts. Dual eligibles are 15% of Medicaid enrollees but account for one-third of Medicaid spending and so could be significantly affected by the Congressional debate on Medicaid and the ACA.

Oklahoma: Managed Care RFP Cancelled

The Oklahoma Health Care Authority canceled an RFP for a new Medicaid managed care program for the aged, blind, and disabled, citing federal and State funding uncertainty.  Implementation of the program had previously been delayed from January 2018 to July 2018 because of concerns around a January CMS rule that prevents states from adding new or increased "pass-through payments" into managed care contracts. The RFP was issued in November 2016.

Utah: State Seeks Waiver Aimed at Reducing Addiction Treatment Waitlists

The Department of Health is seeking a waiver of the federal prohibition on using Medicaid funds for substance use treatment facilities with more than 16 beds, in an effort to increase access and reduce treatment wait times for Medicaid enrollees. The current waitlist for most publicly administered residential addiction treatment facilities in the State ranges from three to six months. Other states, including California, Maryland, Massachusetts and New York, have received similar waivers.


Iowa: Governor Appoints New Department of Human Services Director

Governor Kim Reynolds (R) appointed Jerry Foxhoven to serve as director of the Department of Human Services, which oversees the State Medicaid program. Foxhoven replaces previous director Chuck Palmer who retired effective June 15.

Rhode Island: Senate Confirms EOHHS Head, Recommends DHS Director

The State Senate unanimously confirmed Eric Beane as the new Secretary of the Executive Office of Health and Human Services (EOHHS) and recommended Courtney Hawkins for the Department of Human Services director position. Beane was previously deputy chief of staff for Governor Gina Raimondo (D) and Hawkins was previously chief policy officer for Providence Mayor Jorge Elorza (D). Beane is replacing acting Secretary Ana Rader Wallack.



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