CMS’ increase of the “income verification threshold” makes eligibility determinations easier for consumers; Oregon CO-OP policyholders can credit out-of-pocket spending towards new plans; and report finds that 13 million people would become Medicaid-eligible if non-expansion states expand in 2017.

FEDERAL AND STATE MEDICAID NEWS:

Five Million Uninsured Would Gain Eligibility if Remaining States Expanded Medicaid in 2017

The Urban Institute estimates that 4.8 million uninsured individuals would become eligible for Medicaid if the 19 states that have not yet expanded Medicaid opted to do so in 2017; an additional 8.6 million insured individuals would also become Medicaid-eligible. More than half of the currently uninsured who would become eligible live in three states: Texas, Florida, and Georgia. The vast majority—more than 80%—are adult nonparents and nearly half are white non-Hispanic. Nationwide, there would be between 7.8 million and 8.8 million new Medicaid enrollees, assuming an enrollment rate between 70% (a “moderate” rate) and 88% (a “high” rate).

California: CMS Determines Funding Amounts for Uncompensated Care in Medicaid 1115 Waiver

CMS has authorized $472 million per year for four years to cover the cost of care for uninsured individuals as part of “Medi-Cal 2020,” the State's Medicaid 1115 waiver. The funding is part of the waiver's Global Payment Program (GPP) for Public Health Care Systems, which allows the State to make global value-based payments to public hospital systems that provide high volumes of uncompensated care. CMS had agreed to fund the GPP when the waiver was renewed in December 2015 and specified a dollar amount for the first year of the waiver. The specific funding levels for the succeeding four years were left to be determined pending issuance of a State report on uncompensated care costs in California, which was released in May 2016.

Idaho: Joint Legislative Committee Will Consider Options for Medicaid “Gap” Population

The newly-established “Healthcare Alternatives for Citizens Below 100 Percent of Poverty Level” committee reviewed earlier attempts to expand coverage in Idaho during its inaugural meeting. The committee was established on the final day of the previous legislative session as the House voted down a measure to extend coverage to an estimated 78,000 Idahoans in the “coverage gap,” those who earn too much to qualify for Medicaid but too little for federal tax subsidies on the Marketplace. Committee co-chairs plan to bring coverage recommendations to the 2017 Legislature, possibly through an alternative Medicaid expansion waiver.

New Mexico: Human Services Department Found in Contempt Over 28-Year-Old Social Service Eligibility Lawsuit

A federal judge found the State Human Services Department in contempt for failing to provide sufficient oversight or coordination of SNAP and Medicaid eligibility and enrollment processes in response to court orders related to a 28-year-old class action lawsuit. The judge required the Department to hire an independent expert, or "special master," to oversee the effort to bring the SNAP and Medicaid eligibility and enrollment system into compliance by January 1, 2018. The original case was based on claims that the State was denying people their right to prompt SNAP and Medicaid eligibility decisions.

FEDERAL AND STATE HEALTH REFORM UPDATES:

CMS Offers State Medicaid Agencies Guidance on Coordinating Marketplace and Medicaid Eligibility and Enrollment

CMS released a bulletin reiterating the requirements on state Medicaid agencies to coordinate eligibility and enrollment processes among insurance affordability programs “without undue delay,” and, particularly, the requirement that Medicaid agencies: (1) “determine potential eligibility for coverage through the Marketplace” when the agency deems the applicant ineligible for Medicaid or CHIP, and (2) transfer that individual’s account to HealthCare.gov. CMS highlighted that state Medicaid agencies can treat anyone they determine as ineligible for Medicaid or CHIP as potentially eligible for Marketplace coverage (unless the individual is determined ineligible for procedural reasons). This approach acknowledges that when individuals submit applications directly to a Medicaid agency, the agency does not have sufficient information to assess potential eligibility for tax credits or cost-sharing reductions through the Marketplace. CMS’ clarification is intended to reduce states’ administrative burden while ensuring a timely transfer to the Marketplace.

Minnesota: Survey Finds Uninsurance Rate Cut in Half, Remaining Disparities

The uninsurance rate in Minnesota fell to an unprecedented 4.3% in 2015, down from 8.2% in 2013, according to the State Department of Health’s (DOH) semiannual Health Access Survey. The percentage of individuals insured through public coverage increased more than two percentage points, while group coverage remained steady, ending yearly declines in group coverage since 2011. The most substantial coverage gains were among those who had been uninsured one year or longer. In a presentation to the MNSure board (the State-based Marketplace), DOH noted that there are a number of individuals eligible for premium subsidies who are not receiving them, potentially due to people’s lack of awareness or confusion about their eligibility. DOH noted that as the uninsurance rate falls, those left without insurance can be harder to reach, hence the importance of targeted outreach efforts.

Oregon: Panel of Experts Aims to Transform Behavioral Healthcare Delivery System

Oregon Health Authority (OHA) Director Lynne Saxton assembled a Behavioral Health Collaborative to develop policy proposals that will define the financing and infrastructure needed to update and integrate Oregon's behavioral healthcare system. The collaborative was formed in response to a 2015 report that identified systemic challenges in the State’s behavioral healthcare system, including poor service integration, administrative complexity, access issues, and lack of pediatric services. The Collaborative is expected to meet through December 2016.

FEDERAL AND STATE MARKETPLACE NEWS:

In-Person Assistors Critical to SBM Enrollment, Survey Finds

State-based Marketplaces (SBMs) unanimously cited in-person outreach and enrollment assistance as “critical” in facilitating coverage sign-ups, according to a Commonwealth Fund survey that asked SBMs to identify strategies they feel most impact enrollment. The survey also found that SBMs are responding to concerns about affordability by emphasizing the availability of financial assistance and conveying “a realistic expectation” of premiums. SBMs are increasingly engaging brokers as well, which stems in part from reduced funding for SBM-run assistance programs. SBMs also reported a significant positive impact from technology changes, including the addition of consumer decision-support tools and “simplified” online applications. The authors conclude by noting that further reductions in funding for enrollment assistance could materially weaken future enrollment growth.

Reinsurance Limited Insurers’ Financial Losses in 2014, Report Finds

More than a third of insurers experienced improved or sustained profitability in 2014, the first full year of the ACA’s insurance reforms, though profitability worsened for the remainder of insurers, according to a report from The Commonwealth Fund that analyzed the financial performance of 144 carriers. Insurers that underestimated their claim costs did “considerably worse” than their competitors, though “serious adverse” effects were concentrated among a minority of insurers. The best performing quartile of insurers in the individual market had an average profit of 8.5% compared to an average loss of 21.8% by the worst performing quartile, a difference the authors attribute primarily to the differences between premiums and medical claims. Medical claims averaged 20% less than premiums for the top quartile, but exceeded premiums by 5% for the lowest quartile. The authors also stressed that the ACA’s reinsurance program “substantially buffered” insurers from negative financial impacts in 2014, but noted that insurers may need to increase premiums when the program begins phasing out in 2017.

CMS Increases Income Verification Threshold, Improving Consumer Experience

CMS is reducing the number of consumers that must supply paper documentation to verify their income by adjusting the threshold at which an “income data matching issue” is triggered. Current policies require HealthCare.gov applicants to submit documentation to CMS to verify their income if their attested household income is more than 10% different from what appears in electronic data sources. CMS is increasing that threshold to 25%, or $6,000 (whichever is greater). CMS is recommending that State-based Marketplaces adopt similar thresholds and will require HHS approval if states want to implement thresholds outside of the 10%-25% range. The change will be in effect for HealthCare.gov prior to the start of the 2017 open enrollment period, while State-based Marketplaces can adopt new thresholds at any point during the 2017 plan year.

California: Marketplace Premiums Expected to Increase 13% on Average

Preliminary rates for health plans offered through Covered California, the State-based Marketplace, will increase an average of 13.2% for 2017, higher than the 8% increase projected in the Marketplace’s proposed FY 2016-2017 budget. Covered California noted that despite the increase in average premiums, almost 80% of consumers willing to switch to a different plan on the Marketplace could either pay less than they currently pay or would experience a rate increase of no more than 5%. Covered California premiums increased by an average of 4% in 2016 and by 4.2% in 2015.

Massachusetts: Small Group Market Waiver Extended

CMS has extended a waiver of the ACA's small group rate setting requirements, allowing the State to continue maintaining its small group rating factors, such as group size and industry, through the end of 2018. CMS originally granted a transition period in 2013 due to Governor Charlie Baker's (R) concerns that a transition to the federal rules would cause a spike in small business premiums. The transition period has been extended each year since then. CMS has indicated that this will be the "final one-year extension" and that Massachusetts must be fully compliant by January 1, 2019.

Oregon: CO-OP Enrollees Can Apply Healthcare Spending to New Plans

The 12,000 individual policyholders impacted by Oregon Health CO-OP’s closure will receive credit for deductibles paid and money contributed to out-of-pocket maximums when they purchase new coverage, effective August 1, during a special enrollment period. The impact on the CO-OP’s 10,000 small and large group customers will vary across insurers. This development follows the CO-OP’s July 8 announcement that it would close due to financial difficulties.