States react to the failure of the AHCA; the HHS Inspector General launches an investigation into the Trump Administration's suspension of Marketplace enrollment outreach efforts; and the Kansas Legislature sends a Medicaid expansion bill to the Governor.

ACA REPEAL AND REPLACEMENT ACTIVITY:

House Speaker Ryan Pulls AHCA Minutes Before Vote, Calls the ACA "the Law of the Land"

House Speaker Paul Ryan (R-WI) pulled the American Health Care Act (AHCA) from the House floor minutes before its scheduled vote on Friday, following a number of defections from the House's Republican conference. On Thursday, House leadership introduced a "second degree" manager's amendment, which aimed to weaken the ACA's essential health benefits requirements, though the amendment did not generate enough support to pass the bill. Also on Thursday, the Trump Administration issued an ultimatum to House Republicans, stating that it would not make any further changes to the bill, and that it would move on from ACA repeal if the bill failed. After pulling the bill, Speaker Ryan said the ACA was "the law of the land" and it will remain in place "for the foreseeable future," though in more recent days he suggested that the House might be returning to a debate on the ACA in the current congressional session.

AHCA Amendments Cut Federal Deficit Reduction in Half Without Reducing Premiums or Coverage Losses, CBO Finds

Revised estimates from the Congressional Budget Office and the Joint Committee on Taxation found that amendments added to the American Health Care Act (AHCA) on March 20 would have reduced federal savings under the bill by half without increasing insurance coverage or reducing premiums. With the amendments, the AHCA would have still resulted in 24 million newly uninsured adults by 2026, but it would have reduced the federal deficit by $150 billion by 2026 instead of the $337 billion projected under the original bill.

State-by-State Analysis Estimates AHCA's Impact on Coverage and Federal Expenditures

A Manatt Health analysis estimated that the American Health Care Act's proposal to phase-out federal Medicaid expansion funding would have resulted in 14 million people losing coverage by 2024 and the 31 expansion states plus the District of Columbia losing approximately one-third of their total Medicaid funding by 2026. The state-by-state analysis found that some Medicaid expansion states, including Kentucky, Montana, Oregon, and Washington, could have experienced more than a 40% reduction in federal Medicaid funding each if the bill had passed. The analysis assumes states would have continued coverage just for those Medicaid beneficiaries for whom enhanced matching funds are available.

Governors React to AHCA After Cancelled Vote

Both Republican and Democratic governors have issued statements on the American Health Care Act (AHCA) following its failure to gain sufficient support in the House. Several governors praised the outcome or are considering new Medicaid reforms in light of the cancelled vote.

• California. Following the cancelled vote, Governor Jerry Brown (D) said, "For today we can all breathe a sigh of relief. The ACA endures. But for tomorrow, we must gird ourselves for the battles yet to come."
• Georgia. Governor Nathan Deal (R) indicated after the AHCA failed that the State may seek new Medicaid waivers in the future, but provided little specificity on his plans other than noting he would seek legislative approval for any major changes. The current legislative session ends on Friday.
• Massachusetts. Governor Charlie Baker (R) commended the cancellation of the vote, and said the bill would have "drastically affect[ed] the Commonwealth's ability to ensure essential care for thousands of people."
• Ohio. Governor John Kasich (R) applauded the cancellation of the vote, saying that "both sides must work together to replace Obamacare with a real plan that balances cost with coverage."
• Virginia. With the ACA likely to remain in place, Governor Terry McAuliffe (D) introduced a budget amendment which would restore his authority to implement Medicaid expansion. The amendment is expected to meet opposition from Virginia's Republican-controlled House of Delegates.
• Washington. Governor Mike Inslee (D) praised the cancellation of the vote, calling it an "enormous victory for Washington."

HHS Inspector General to Review Decision to Suspend Open Enrollment Advertisements

The HHS Office of Inspector General will review the Agency's decision to halt paid advertisements and other outreach efforts during the final days of 2017 open enrollment, according to a letter from Inspector General Daniel R. Levinson. The investigation was requested by Democratic Senators Elizabeth Warren (MA) and Patty Murray (WA).

STATE MEDICAID EXPANSION AND REFORM NEWS:

Implementing Work Requirements Would Create Operational Challenges for States

A Kaiser Family Foundation brief suggests that implementing work requirements as a condition of Medicaid eligibility would create an administrative burden for states, though such a requirement would likely apply to only a small number of people. While CMS has not previously approved any state requests to implement work requirements, Arizona, Indiana, and Kentucky have recently submitted 1115 waiver requests that include work requirements and the Trump Administration has signaled it may approve such requests. According to the brief, nearly 60% of adults enrolled in Medicaid work and nearly 80% have a household member that works.

Alabama: Governor Bentley Meets with Secretary Price, Affirms Shared Commitment to 1115 Waiver Implementation

HHS Secretary Tom Price, in a meeting with Governor Robert Bentley (R), affirmed that the State's Medicaid reform efforts through the implementation of Regional Care Organizations will be supported by the new Administration.

Arkansas: Governor to Call Special Legislative Session on Proposed Changes to Medicaid Expansion Waiver

Governor Asa Hutchinson (R) plans to hold a special legislative session to address his proposal to amend the State's Medicaid expansion waiver by adjusting income eligibility for the Medicaid expansion population from 138% of FPL to 100% of FPL, instituting work requirements, and modifying the State's employer-sponsored insurance premium assistance program, according to the Arkansas Democrat-Gazette.

Kansas: Medicaid Expansion Bill Advances to Governor

A bill to expand the State's Medicaid program passed the Senate today after it was recommended for passage in the Committee of the Whole. The bill has already passed the House. The bill now goes to Governor Sam Brownback (R), whose Communication Director has indicated that the Governor opposes the bill, signaling he may veto it.

Montana: Medicaid State's "Most Potent Tool" to Combat Substance Use Disorders

A report commissioned by the Montana Healthcare Foundation and prepared by Manatt Health reviews the role of Medicaid as the State's primary payer for substance use disorder (SUD) services and identifies best practices for leveraging Medicaid to improve the SUD treatment delivery system. Best practices recommended in the report include: modernizing Medicaid payment methods and rates for SUD services; allowing additional providers to bill Medicaid for such services; and promoting integration of SUD screening and treatment in primary care settings. The report also notes that the State saved $1.5 million in 2016 and expects future savings of at least $3 million as a result of federal Medicaid expansion funding for SUD services.

Texas: Privatization of Non-Emergency Medical Transportation Under Scrutiny

The Texas Health and Human Services Commission opened an investigation into the privatization of Medicaid non-emergency medical transportation services, following a report by the nonpartisan Legislative Budget Board which found fewer enrollees were served, complaints increased, and per-ride costs tripled upon privatization of the service, resulting in an estimated $316 million higher cost to taxpayers.

OTHER FEDERAL AND STATE HEALTH REFORM UPDATES:

California: State Senator, a Single-Payer Advocate, Announces Bid for Insurance Commissioner

State Senator Ricardo Lara (D) announced his intention to run for California Insurance Commissioner in 2018. Senator Lara is an advocate for a single-payer healthcare system and recently introduced single-payer legislation.

Delaware: Legislature to Consider Three Bills to Address Opioid Epidemic and Substance Abuse Treatment

A bipartisan group of State lawmakers plan to introduce three bills aimed at expanding treatment for substance abuse and addressing the over-prescribing of opioids. The bills would prohibit the use of pre-authorization and referral requirements for treatment programs, provide funding to secure medical advice for those denied coverage of treatment on "medical necessity" grounds, and create a new committee to monitor the State's prescription drug database.

Idaho: Measure to Provide Limited Coverage to Some Uninsured Residents Fails in Senate

The State Senate voted 13-22 against legislation to provide limited primary care and some prescription drug coverage to an estimated 15,000 of the 78,000 Idahoans in the coverage gap (those that earn too much to qualify for Medicaid, but too little to qualify for Marketplace subsidies). Opponents of the bill argued it would not provide coverage to all residents in the coverage gap and it would divert $10 million of tobacco settlement funds away from existing programs.

Maryland: New State Commission Would Monitor Congressional Changes to Medicare, Medicaid

The Senate passed the Maryland Health Insurance Coverage Protection Act, which would establish an 11-member commission to monitor and evaluate the impact of federal changes to Medicare, Medicaid and CHIP, and provide recommendations for State and local action to protect access to affordable health coverage. The legislation is currently being considered in the House.

Oklahoma: Senate Passes Inter-State Insurance Sales Bill as Insurance Commissioner Warns Marketplace May Have No Issuers in 2018

The State Insurance Commissioner sent a letter to Governor Mary Fallin (R) warning that the State's last Marketplace carrier, Blue Cross Blue Shield of Oklahoma (BCBS), is "making preparations to withdraw" from the Marketplace in 2018. However, BCBS said in a statement that no decision had been made. Meanwhile, the State Senate passed SB 478, a bill that would allow out-of-state insurers to sell plans in Oklahoma. The bill would also allow in-state insurers to offer plans "comparable" to out-of-state plans. Critics of the bill note that out-of-state insurers would not be subject to the State's benefit coverage mandates.