With the holiday season underway, this week the Federal government awarded $110 million in exchange establishment grants, released proposed rules to permit employees to receive employer-sponsored insurance and tax credits, and issued a draft Letter to insurers seeking to offer plans on the Federally-facilitated Marketplace in 2016. Meanwhile, Virginia’s Governor incorporated Medicaid expansion into the State budget, Alaska’s Governor appointed a director to oversee Medicaid expansion, and Vermont’s Governor announced a move away from the State’s proposed single-payer healthcare system.
FEDERAL NEWS:
CMS Awards $110 Million in Seven Level One Establishment Grants
CMS awarded six states – Idaho, Illinois, Maryland, Massachusetts, Vermont and Washington – and D.C. a total of $110 million in Level One exchange establishment grants. The funding will be used by the states for website development, customer service, Small Business Health Options Program (SHOP) Marketplace functionality and other purposes.
Administration Proposes Rule To Amend Excepted Benefits, Employer-Provided Wraparound Coverage
The Departments of Health and Human Services, Labor, and Treasury issued a proposed rule that would allow low-wage workers to receive health benefits from their employer in addition to premium tax credits to purchase qualified health plan coverage – marking a departure from previous guidance. The proposed rule, which generally applies to employees who cannot afford to participate in their employer’s coverage plan, would define certain wraparound benefits offered by an employer as “excepted benefits.” This would allow employees to enroll in a qualified health plan and receive tax credits. The rule is open to comments until January 22, 2015.
CCIIO Issues Draft Letter to FFM Issuers for 2016 Plan Year
CCIIO released a draft Letter to issuers seeking to offer plans on the FFM or Federally-facilitated Small Business Health Options Program (SHOP) Marketplace with policy and operational requirements for the 2016 plan year. Much of the guidance repeats information CMS released in previous regulations and issuer Letters; however, the draft Letter proposes an April 15 deadline for the 2016 FFM qualified health plan certification applications, potentially requiring premiums to be set before health issuers know the true impact of risk adjustment, transitional reinsurance, and temporary risk corridors for the 2014 plan year. The Letter is open to comments until January 12, 2015.
Enrollment Growth Continues; 2.5 Million Select Marketplace Plans and 9.7 Million More Enroll in Medicaid/CHIP
Between November 15 and December 12, nearly 2.5 million people selected a plan on the Federally-facilitated Marketplace. More than 1 million of the enrollments occurred last week, indicating a growing interest as the open enrollment deadline nears. As with previous weeks, the breakdown of enrollees was roughly split between new (48%) and returning (52%) customers, according to an HHS blog post. CMS also released a Medicaid/CHIP enrollment report, indicating that a total of 68.5 million people have enrolled in Medicaid and CHIP as of October 2014 – with 9.7 million enrolling since October 2013, representing a 17% increase over the average monthly enrollment for July through September of 2013. Enrollment rose by over 24% in states that have implemented Medicaid expansion as compared to 7% in states that have not expanded.
National Center for Health Statistics Shows 2014 Coverage Gains are Largest in Four Decades
On the heels of the Marketplace and Medicaid enrollment announcements from HHS and CMS, the National Center for Health Statistics released new data indicating that the nation’s uninsured rate is the lowest it has been since the 1970s. The uninsured rate dropped from 13.1% in the first quarter of 2014 to 11.3% in the second quarter, both down from the average rate of 14.4% in 2013. The decline in the uninsured rate corresponds with the increase in coverage for individuals who have enrolled in Marketplace and Medicaid/CHIP coverage over the past year.
HHS Announces Over $622 Million in State Innovation Model Test Awards
Eleven states were awarded over $622 million in State Innovation Model Test Awards to design and test innovative healthcare payment and delivery system reforms, according to HHS. The funds are intended to support transformation that improves healthcare quality while lowering costs. The funding for these states -- Colorado, Connecticut, Delaware, Idaho, Iowa, Michigan, New York, Ohio, Rhode Island, Tennessee and Washington – will be used to support testing and implementation of State Health Care Innovation Plans. In addition, 17 states will receive nearly $43 million to design proposals for statewide health system transformation.
STATE HEALTH REFORM ACTIVITY:
Alaska: Governor Appoints Dedicated Resource to Medicaid Expansion
As part of Governor Bill Walker's (I) efforts to expand Medicaid in Alaska, Chris Ashenbrenner has been appointed to a newly created position as Medicaid expansion project director. Ashenbrenner, the State's first full-time dedicated resource to expansion, will focus on addressing backlogs in the State's Medicaid eligibility and enrollment system and earning support from the GOP-controlled State Legislature. Ashenbrenner has come out of retirement for this position, after a long career in the State's public health sector, and will serve in this role until a clear implementation plan is outlined.
Arkansas: Governor-Elect Announces New Insurance Commissioner
Governor-Elect Asa Hutchinson (R) has announced that Representative Allen Kerr (R) will be his new insurance commissioner, replacing Jay Bradford, who has served in the position since 2009, reports the Arkansas Democrat Gazette. According to UALR Public Radio, Kerr voted in support of expanding Medicaid through the Private Option in 2013 and voted against it in 2014. Prior to his tenure in the State legislature, Kerr worked in the insurance industry for 34 years.
New Mexico: Board Approves Assessment on Major Medical Policies Offered On and Off Exchange to Achieve Sustainability
During a public hearing on draft amendments to the financial sustainability section of the New Mexico Health Insurance Exchange (NMHIX) Plan of Operation, the Board of Directors voted overwhelmingly to impose a fee on all major medical policies issued by insurers in the State, not just those offered on the Exchange. Due to expiring federal funding, NMHIX must be able to fund its Small Business Health Options Program (SHOP) Exchange beginning January 1, 2015 and its individual Exchange beginning January 1, 2016. The immediate goal of the sustainability plan approved by the Board is to raise the anticipated $1.5 million needed for annual operating costs for SHOP, which currently has 800 people enrolled.
North Carolina: Research Report Indicates State Foregoing $21 Billion by Rejecting Medicaid Expansion
A newly released study from the Cone Health Foundation and the Kate B. Reynolds Charitable Trust found that if North Carolina declines to expand Medicaid, the State would forego approximately $21 billion in business activity and federal funding and would create 43,000 fewer jobs in a variety of industries from 2016 through 2020. The report also estimated that while expanding Medicaid by 2016 would require an additional $1.7 billion in additional State Medicaid funding, the increase could be fully offset by gains in State tax revenues and by potential savings in other health costs.
Oregon: Governor Nominated New Oregon Medicaid Director
Governor John Kitzhaber (D) nominated Lynne Saxton to lead the Oregon Health Authority, the State’s Medicaid Program. Saxton, who previously served as Executive Director of Youth Villages Oregon, will serve as Acting Executive Director beginning January 20, 2015.
Utah: Governor's Medicaid Expansion Plan Rejected by Legislative Task Force
In a largely symbolic vote, the Utah Legislature’s GOP-controlled Health Reform Task Force declined to recommend Governor Gary Herbert's (R) alternative Medicaid expansion plan, Healthy Utah, to the full Legislature, according to the Salt Lake Tribune. Despite the Task Force’s recommendation, Healthy Utah will be evaluated and voted on by the full Legislature in the new year. The Task Force recommended two different Medicaid expansion plans, each of which would cover individuals below 100% FPL who are medically frail. Compared to the Governor’s Healthy Utah plan, the Task Force’s plans would expand Medicaid to fewer individuals and would cost more for the first six years – though would cost less by approximately $78 million by 2021.
Vermont: Governor Not Moving Forward with Single Payer Plan
Governor Peter Shumlin (D) announced he will not pursue a single payer healthcare plan in the foreseeable future. The Administration found a single payer healthcare plan financially infeasible, requiring an 11.5% payroll tax on employers and a 0-9.5% sliding scale income tax on individuals. The Governor intends to advocate for healthcare reform in the next legislative session by pursuing a federal 1115 Waiver that would allow Vermont to transition its Medicaid reimbursement from fee-for-service to value-based payment arrangements.
Virginia: Medicaid Expansion Included in Governor's Recommendations to State Budget
Governor Terry McAuliffe (D) announced several amendments to the State budget, including an expansion of Medicaid. During the 2014 legislative session a proposal to expand Medicaid was ultimately defeated after a change in the Legislature resulted in a Republican majority in both houses. The Governor's announcement focuses on the available federal funding and potential savings if the State expands Medicaid on January 1, 2016.
Wyoming: Committee Endorses Medicaid Expansion Plan Different from Governor’s Plan
The Wyoming Joint Labor, Health and Social Services Interim Committee endorsed a bill to expand Medicaid that includes features distinct from the plan released by the Governor earlier this month. The Governor’s plan proposes to impose cost-sharing on all eligible adults and premiums on those with income above 100% of the federal poverty level. The legislation endorsed by the Committee requires individual contributions to a health savings account (HSA), a similar feature to Indiana's pending Medicaid expansion proposal. The Committee’s Medicaid expansion plan will be considered by the full Legislature in the upcoming general session, while the Governor’s plan, which received a 7-7 vote in the Committee, could still be considered by the Legislature if an individual lawmaker sponsors it.