Manatt on Health Reform: Weekly Highlights

Florida, Maine and Ohio consider proposals to impose work requirements in Medicaid, Congress continues to debate the AHCA, and the uncertain future of cost-sharing reductions continues to generate concern.


AHCA Amendment Would Allow States to Waive ACA Benefit and Pricing Provisions

An AHCA amendment introduced last week would allow states to waive federal essential health benefit (EHB) requirements and reintroduce health status as a basis for pricing in the individual market for individuals that fail to maintain continuous coverage. States would be required to establish high-risk pools or reinsurance mechanisms to cover these individuals. A subsequent measure removed a controversial exemption to state waiver provisions for members of Congress and their staff. The updated proposal appears to have won support from members of the House Freedom Caucus, though it remains unclear if it has sufficient support from Republican moderates. A wide range of industry groups, including the American Hospital Association, American Medical Association, America's Essential Hospitals, and AARP, continue to oppose the AHCA. The House may move forward with a vote on the amended AHCA this week.

Administration Continues Mixed Messages on Cost-Sharing Reduction Payments, As Stakeholders Urge Clarity

The Trump Administration told lawmakers last week that it would continue making ACA cost-sharing reduction (CSR) payments for now, but OMB Director Mick Mulvaney indicated today that the Administration could cut payments off as soon as next month. Congress did not include funding for the payments when taking action on a continuing resolution funding the government through September 30, 2017, as Democratic lawmakers and insurers had hoped. A coalition of organizations led by America's Health Insurance Plans and including the American Hospital Association, Blue Cross Blue Shield Association, American Medical Association, and others stressed in a statement the importance of CSRs and called for clarity on their future. Separately, Molina, a prominent Marketplace insurer, said in a letter to Congressional leaders that it will drop out of the Marketplaces immediately if CSRs are not funded, and Anthem said it could raise premiums by 20% if the payments are not available.

Ending Cost-Sharing Reduction Payments Would Cost Federal Government $31 Billion

A Kaiser Family Foundation analysis finds that eliminating cost-sharing reduction (CSR) payments to insurers would increase net federal spending by $31 billion from 2018 to 2027. The loss of CSR payments are expected to lead to increased premiums and, in turn, increased federal spending on premium tax credits. A similar analysis conducted by Covered California found that eliminating CSR payments would cost the federal government at least $47 billion more over the next ten years.

Colorado: Marketplace Premium Assistance Bill Fails in the Senate

A bill that would have provided State-funded premium subsidies to some Marketplace enrollees earning between 400% and 500% of FPL died in the Colorado Senate after a key committee declined to send the bill for a floor vote. The measure had bipartisan support in the House.

Texas: Lawmakers Pass Bill Enabling High-Risk Pools

The Senate unanimously passed a bill allowing the State to create a high-risk pool or a reinsurance program if warranted by federal policy changes before the next State legislative session, which begins in January 2019. The bill highlights that Texas lawmakers want to be prepared to respond quickly if Congress passes legislation to repeal and replace the ACA.


Florida: House Passes Medicaid Work Requirements Legislation

The House passed requiring some Medicaid enrollees to prove they are employed, actively seeking work, or enrolled in a job-training program, or be locked out of coverage for one year. The majority of current enrollees, including the disabled, children, and those in long term care, would be exempt from the requirement. Analysis published by House staff estimated 385,000 enrollees would be subject to work requirements and acknowledged "an indeterminate number of enrollees may be dis-enrolled," leading to "an increase in hospital charity care." Premiums included in an earlier iteration of the bill were stripped out in the final version. The bill now goes to the Senate for consideration, and would also require a federal waiver to be implemented.

Maine: Draft Waiver Request Released, Proposes New Eligibility Requirements

The Maine Department of Health and Human Services (DHHS) released for public comment a draft 1115 Medicaid waiver application proposing new eligibility and coverage requirements for the State Medicaid program, including work requirements as a condition of eligibility and sliding scale premiums ranging from $14 to $66 per month. Maine's application also proposes a 90-day lockout from coverage for individuals with incomes at or below 100% of FPL who fail to make timely premium payments and an ongoing lockout for individuals who do not pay past unpaid premiums, financial penalties for missed doctor appointments, and asset tests for individuals determined eligible under the modified adjusted gross income (MAGI) standard. The State will accept public comments on the proposal until May 25, 2017.

Missouri: Senate Passes FY 2018 Budget That Would Expand Medicaid Managed Care Statewide

The Senate-approved appropriations bill for the Department of Social Services would expand Medicaid managed care statewide; currently, managed care is limited to enrollees in 54 of the State's 115 counties. The budget differences between the House and Senate versions must be reconciled and signed by the Governor before a May 6 deadline or a special session could be called to finalize the budget.

North Carolina: State Opens Public Comment Period on Medicaid Transformation

The Department of Health and Human Services (DHHS) opened a 30-day public comment period to solicit feedback on possible changes to the State's Medicaid 1115 waiver application, submitted to CMS in June 2016. The waiver proposal details the State's plan to transition its Medicaid delivery system from fee for service to managed care. DHHS is particularly interested in feedback on seven areas including physical and behavioral health service delivery, supporting provider transformation, care management and population health, and improving quality of care. DHHS will accept comments until May 25.

Ohio: Proposed House Budget Would Impose Work Requirements

The House passed a preliminary budget today requiring the Department of Medicaid to seek semi-annual approval from a legislative oversight board to spend State Medicaid expansion dollars, and to submit a federal waiver requesting approval to mandate work requirements for Medicaid expansion recipients, excepting those over 55, in school or a job training program, in a substance abuse treatment program, or considered medically fragile. The bill will now move to the Senate for consideration; per State law, the budget must be returned to Governor Kasich (R) by June 30.

Oklahoma: Senate Passes Bill Requiring Vendor Review of Medicaid Rolls

The Senate recently passed a bill requiring the State to contract with third party vendors to verify eligibility information provided by Medicaid applicants prior to enrollment, and to review changes in enrollee circumstances that may affect eligibility on a quarterly basis. The State would be required to conduct an additional re-determination of eligibility if the vendor identifies a change in circumstance. The bill would also require new applicants to complete an identity authentication process. Opponents note the state already has one of the lowest enrollment error rates in the country. The amended bill now returns to the House for further consideration.

Texas: Medicaid To Cover Mosquito Repellent To Prevent Zika

Medicaid will cover mosquito repellent without a prescription at participating pharmacies statewide in an effort to combat Zika. The benefit is available to many Medicaid and CHIP enrollees, including women ages 10 to 55, men age 14 and up, and some children with special health care needs.


Expanding Medicaid in 19 Additional States Would Improve Coverage and Reduce Uncompensated Care

Expanding Medicaid in the 19 remaining non-expansion states would reduce the number of uninsured by between 4.3 million and 5.2 million adults, decrease consumer out-of-pocket spending by between $84.1 billion and $90.7 billion, reduce uncompensated care costs by between $22.5 billion to $27.9 billion, and draw down between $7.14 and $7.15 in net federal spending for each state dollar spent on expansion between 2018 and 2027, according to an Urban Institute report. The report, which analyzes the potential impact of expansion on a state-by-state basis, finds that Mississippi and Tennessee would draw down the largest amount of net federal spending for each state dollar spent on expansion ($12.09 and $9.43 respectively). The current version of the AHCA would phase out enhanced federal funding in states with existing expansions and preclude the remaining 19 states from adopting expansion in the future.

Rural Areas Most Vulnerable to Medicaid Funding Cuts

Reductions in Medicaid funding, like those proposed in the AHCA, would disproportionately impact individuals living in rural areas, where there are already significant barriers to accessing care, including provider shortages and hospital closures, according to a Kaiser Family Foundation brief. Medicaid coverage rates tend to be higher in rural areas, where nearly one in four non-elderly individuals is covered by Medicaid. In states that expanded Medicaid, the Medicaid coverage rate in rural areas increased five percentage points between 2013 and 2015, compared to one percentage point in non-expansion states. In 2015, nonelderly individuals in rural areas in non-expansion states were nearly twice as likely to be uninsured as those living in expansion states.

Medicaid Enrollees Report Quality of Care On Par with Private Insurance, Survey Finds

Medicaid enrollees rate their quality of care as highly as the privately insured and higher than the uninsured, according to The Commonwealth Fund 2016 Biennial Health Insurance Survey. Medicaid enrollees are also significantly less likely to report skipping needed care due to cost, compared to the privately insured or the uninsured. For example, 17% of the privately insured reported skipping recommended care due to cost, compared to 7% of Medicaid enrollees. Medicaid enrollees are also significantly less likely than the uninsured and those with private insurance to report having difficulty paying medical bills or having medical debt.

Report Highlights Changing Landscape for Family Planning Services Under Medicaid

An analysis of Medicaid family planning programs based on six state case studies, prepared by Manatt Health and the Kaiser Family Foundation, reviews the important role that Medicaid continues to play in delivery of family planning services to low-income women and how it has evolved since the passage of the ACA. The analysis notes that family planning providers sit at the center of state and federal political controversies around abortion services and face significant uncertainty about funding and sustainability. Kaiser also released an analysis on current family planning policies and practices under Medicaid managed care, and a report examining variation in pregnancy and perinatal benefits across Medicaid programs.


Minnesota: Bills Restricting Abortion Facilities and Funding Advance

The House has passed a bill that would eliminate State funding for abortions and a second bill that would require abortion facilities to be licensed; a hearing in the Senate on the licensing bill will likely occur this week. In 2012 Governor Mark Dayton (D) vetoed a bill that would require licensing of abortion facilities and has said he would oppose any bills that limit women's access to abortions, according to U.S. News and World Report.

Washington: Director of Health Care Authority Stepping Down

Health Care Authority (HCA) Director Dorothy Frost Teeter will leave her position on June 30, having served in the role since 2013. HCA oversees Medicaid and an insurance program for State employees. The State has not yet identified a replacement.



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