The National Governors Association and National Association of Insurance Commissioners weigh in on ACA repeal and replace; CBO releases new Medicaid and Marketplace enrollment estimates; and Massachusetts proposes reinstating its employer mandate.

ACA REPEAL STATEMENTS AND ANALYSIS:

National Governors Association and Insurance Commissioner Association Call for State Flexibility in Letters to Congress

The National Governors Association (NGA) and the National Association of Insurance Commissioners (NAIC), in separate letters to Congress, called for state flexibility in regulating state insurance markets. The NGA also emphasized that any changes to Medicaid financing should not shift costs to states, while the NAIC called for the rejection of cross-state insurance sales unless states are given discretion to voluntarily form such compacts amongst themselves.

Repeal of Individual Mandate Likely to Lead to Market Exits, Insurers Say

The Urban Institute conducted a series of interviews with 13 ACA Marketplace insurers to assess their likely responses to current ACA repeal proposals. Insurers said that repeal of the individual mandate or cost-sharing reduction payments would likely lead to market exits and higher premiums. If a replacement plan is enacted, insurers said a multi-year transition period would be needed.

States Continue to Provide Input to Congress on Repeal and Replace Plans

• Alaska: Governor Bill Walker (I) recommended that any “adjustments” to the ACA be carefully evaluated and timed to allow for an organized transition. Governor Walker also called for federal funding of the State’s existing high-risk pool and argued against Medicaid block grant funding.
• Colorado: Governor John Hickenlooper (D) urged Congress not to repeal the ACA without a plan to protect those who would lose coverage, and expressed concern that Medicaid block grants or per capita caps could threaten benefits over the long term.
• Iowa: Governor Terry Branstad (R) called for repeal of the ACA, calling it “unaffordable” and “unworkable.” The Governor said he would be supportive of Medicaid block grants, if “true flexibilities and decision-making power” is provided to the states.
• Illinois: Acting Director of Insurance Jennifer Hammer called for "certainty and stability" before changing the ACA, and urged Congress to ensure that “flaws” with the ACA “are not compounded through hasty and/or incomplete action.”
• Kentucky: An unpublished letter from Governor Matt Bevin (R) calls on Congress to repeal the ACA “in its entirety” and requested state flexibility to regulate the health insurance market, according to media reports.
• Minnesota: Governor Mark Dayton (D) said that repealing the ACA without an alternative would “have a devastating impact” on the 380,000 Minnesotans who have gained coverage under the law, and would create “serious uncertainty” in the private market.
• North Dakota: Insurance Commissioner Jon Godfread advocated for giving states the power to regulate insurance markets, but cautioned that “the last thing America needs is another hastily-passed health care law without proper and prudent input from stakeholders across the country.”
• Oklahoma: Insurance Commissioner John Doak pressed for state flexibility to regulate insurance markets and to determine coverage levels and benefits, and asked that Congress fund ACA risk corridor payments to ensure a stable Marketplace.

California: Eliminating Cost-Sharing Reduction Payments Would Increase Silver Plan Premiums and Federal Spending

Terminating federal cost-sharing reduction (CSR) payments would increase premiums for silver plans (the plans that CSRs apply to) by 16.6%, according to a study from Covered California, the State-based Marketplace. (This estimate assumed that plans would be permitted to build the costs into premiums in 2018.) The spike in silver plan premiums would, in turn, cause total federal spending in California to increase by $226 million (a 29% increase) because the generosity of federal tax credits is linked to the cost of silver plans.

California: Governor Touts State’s Gains Under the ACA

In his annual State of the State address, Governor Jerry Brown (D) promised to fight to protect California’s healthcare gains under the ACA and warned that loss of ACA funding would directly impact the State budget, possibly “devastating” it.

FEDERAL AND STATE MEDICAID REFORM ACTIVITY:

Evidence Suggests Penalties on Medicaid Enrollees Can Increase Unnecessary Emergency Room Use

A review of Medicaid incentive programs in West Virginia and Indiana found that penalties for Medicaid enrollees can negatively impact patient care and increase the use of costly emergency services, according to a brief from the Center on Budget and Policy Priorities. The brief also looked at evaluations of reward-based incentive programs in several states and found that reward programs may encourage only short-term behavioral changes. Medicaid incentive programs, which can use both rewards and penalties, are intended to influence how enrollees use their coverage.

New Jersey: Governor Expresses Support for Medicaid Block Grants

Governor Chris Christie (R) said during a monthly radio appearance that he supports switching to a block grant funding mechanism for Medicaid and believes it would allow states to focus on their top priorities, including addressing opioid abuse and addiction, reports NJ.com.

New York: State Rescinds Waiver Request to Provide Medicaid Coverage to Incarcerated Individuals Re-Entering the Community, Citing Trump Administration

State officials have withdrawn a federal waiver request seeking to use Medicaid funding to pay for care coordination and other health services for incarcerated individuals with serious behavioral and physical health conditions in the thirty days prior to release, to ensure they return to the community with medication and care in place. The intent of the request was to develop a care continuum for those re-entering the community, and streamline access to care upon release. Citing concerns that the new Administration would not approve the waiver, State officials said that withdrawing the request would allow time for conversations with the new Administration “to see where we may align on these issues."

FEDERAL AND STATE MARKETPLACE NEWS:

CBO Lowers Its Marketplace Enrollment Projections

The Congressional Budget Office (CBO) lowered its projections for the number of individuals purchasing 2017 Marketplace coverage from 15 million to 10 million in its latest 10-year budget and economic outlook. By 2027, CBO estimates that 13 million people will have Marketplace coverage, down from the March 2016 projection of 18 million to 19 million. Twelve million people are expected to be covered under the Medicaid expansion in 2017, rising to 17 million by 2027 (CBO projected in their January 2016 report that 14.5 million would be covered by 2025).

Connecticut: State Marketplace Board Votes to Tighten Special Enrollment Period Requirements

The Access Health board voted to require individuals to submit documentation to prove they are eligible to enroll in Marketplace coverage outside of the annual open enrollment period. The move responds to insurance companies’ concerns that individuals were waiting to enroll until they were sick and needed care.

Minnesota: Governor Signs Premium Relief Plan

Governor Mark Dayton (D) signed into law a $325 million bill that will fund a 25% reduction in premium payments for 125,000 Minnesotans who purchase their coverage on the individual market and are ineligible for ACA tax subsidies. The package also includes $15 million to help cover people with serious medical conditions who lose their coverage and allows for-profit companies to operate managed care organizations, among other reforms. The law is a response to 2017 premium rate increases in the individual market, which range from 50% to 67%.

OTHER STATE HEALTH REFORM ACTIVITY:

Massachusetts: Governor Proposes Reinstating State’s Employer Mandate

Governor Charlie Baker (R) proposed reinstating the State’s employer-based coverage mandate, along with a number of other provisions aimed at shifting members back to commercial coverage, as part of his fiscal year 2018 budget proposal. The employer mandate mirrors a provision of the State’s 2006 health law that was repealed in 2013 in anticipation of the ACA’s employer mandate. Under the Governor’s proposal, the State would seek a waiver to implement the State’s mandate instead of the ACA mandate. Other proposals in the budget include: a five-year moratorium on new benefits mandates; public listing of average commercial insurer provider rates for common services; and caps on provider reimbursement rates. The Governor’s office will hold hearings on the proposal through March; House and Senate budget proposals will follow after that.

STATE STAFFING UPDATE:

Texas: Charles Smith Reappointed Executive Commissioner of Health and Human Services Commission

Charles Smith, who has served as the Executive Commissioner of Texas' Health and Human Services Commission since June, was reappointed by Governor Greg Abbott (R) for a two-year term, pending Senate confirmation.