This week, Alaska’s Governor introduced Medicaid expansion bills in both the House and Senate after failing to get approval in his budget. Colorado determined that non-ACA-compliant plans cannot be sold in 2016, a year ahead of federal mandates. And Indiana reports increased provider choice since expanding Medicaid at the start of 2015.
MEDICAID EXPANSION ACTIVITY
Alaska: Governor Unveils Medicaid Expansion Bill
After failing to secure legislative approval for Medicaid expansion through his budget proposal, Governor Bill Walker (I) introduced expansion bills in the House and Senate, HB148 and SB78. This represents a change of position for Governor Walker, who previously indicated there was no need for him to submit standalone legislation when an expansion bill, HB18, was already introduced in the House. The Governor's bills seek to expand Medicaid coverage to Alaskans with incomes up to 138% of the federal poverty level, contingent on the federal match rate for expansion not falling below 90%. In addition, the bills encourage the State to pursue a provider tax to partially offset the cost of expansion, and apply for waivers to use innovative service delivery systems, increase efficiency and improve home and community-based services. The bills are currently under review by the respective Health and Social Services Committees.
Florida: House, Senate Budget Proposals Reflect Differing Healthcare Agendas
The Florida House and Senate introduced budget proposals with vastly different healthcare agendas, resulting in a $5 billion discrepancy. The Senate plan includes receipt of $2.8 billion in federal Medicaid expansion funds and $2.2 billion for the continuance of a modified Low Income Pool (LIP) program, which CMS has stated it will not renew at the end of June in its present form. The House proposal, on the other hand, excludes both Medicaid expansion and LIP funding. Florida’s House has blocked Medicaid expansion for the past two legislative sessions and, though it supports continued LIP funding, has stated that it is not prepared to accept further funds without specification from CMS about the future parameters of the program.
Indiana: Governor Pence Lauds Improved Provider Participation since Medicaid Expansion
According to Governor Mike Pence (R), since the approval of the State’s Medicaid expansion program in January, the three managed care plans that coordinate care for expansion adults have, in total, added 939 providers of all types, including 335 physicians, to their networks. The Governor credits this “rapid and meaningful increase in the number of doctors opening their practices to Healthy Indiana Plan members” to the Medicare-equivalent reimbursement rates that serve as a main tenet of the program.
Kansas: Medicaid Expansion Halts after Testimony Warns of Potential Costs
Following two days of testimony, the House Committee on Health and Human Services did not advance Medicaid expansion bill HB 2319. While the former secretary of the Kansas Department of Health & Environment (KDHE) testified in support, acting secretary Susan Mosier warned legislators of potential costs. A fiscal analysis submitted by the Budget Director indicates that while federal funding would cover all costs of the expansion in 2016, the State may incur costs of $3 million for new enrollees who were already eligible for the program. Additionally, the analysis speculates that if the federal government made expansion contingent on providing services to disabled Kansans on Medicaid waiver waiting lists, these services could cost the State $97 million in 2016. Because it is unclear whether funding the waiting lists would be a prerequisite to expansion, some stakeholders maintain the costs are “artificially pump[ed] up.” Tom Bell, President of the Kansas Hospital Association (KHA), noted that KHA believes the expansion will “pay for itself through economic development spurred by the infusion of…federal cash” and that the hospitals are willing to discuss the costs of the program.
MORE STATE ACA NEWS
Colorado: Non-ACA-Compliant Plans Will No Longer be Sold in 2016
The Colorado Division of Insurance (DOI) announced that health insurance plans for individuals and small employers that do not meet ACA requirements will not be sold in 2016, despite federal guidance that permits states to renew non-ACA-compliant plans through 2017. The DOI clarified that grandfathered plans, as defined by the ACA with an effective date prior to March 23, 2010, will not be impacted, but estimates that nearly 190,000 individuals currently enrolled in non-ACA-compliant plans will need to transition to compliant coverage.
FEDERAL NEWS
Study Projects Equal Repayments and Refunds for ACA Tax Subsidies
A new study by the Kaiser Family Foundation estimates that taxpayers receiving advance premium tax credits (APTC) are about as likely to owe some repayment (50%) as receive a refund (45%). The remaining 5% will see no change to the tax credit amount. Subsidy-eligible households with starting incomes under 200% of the poverty line are more likely to owe a repayment (54%) and less likely to receive a refund (40%). The size of the estimated average repayment ($794) is very similar to the estimated average refund ($773). Findings are based on tracking income changes (prior year vs. current year) typical of the subsidy-eligible population between 2013 and 2014.
Relief Extended for Tax Filers Sent Incorrect Forms
The United States Department of Treasury announced that any HealthCare.gov or State-based Marketplace enrollee who received an incorrect 1095-A form and used it to file taxes does not need to file an amended return, and that the IRS will not pursue the collection of any additional taxes from these individuals. Further details regarding when to submit an amended return were provided in an FAQ. This announcement comes on the heels of CMS’ statement that additional errors have been identified on some 1095-A forms since its first announcement that incorrect information was sent to approximately 800,000 individuals. CMS noted that 90% of those who received incorrect 1095-A forms from HealthCare.gov have received corrected forms, and that the remaining 80,000 should receive corrected forms this week.
House and Senate Republicans Advance Budget with Repeal of Affordable Care Act and Medicaid Cuts
Early budget activity reveals bills in both the House and Senate for the 2016 fiscal year that seek to eliminate the federal debt by 2025 through cuts to trillions of dollars from healthcare and welfare programs. Both the House and Senate supported a repeal of the Affordable Care Act and funding Medicaid through block grants. Additionally, the House proposed turning Medicare into a premium support system where retirees would purchase insurance on the private market with government subsidies. The Republicans’ budget contrasts sharply with the initiatives put forth by President Obama’s budget and is likely to meet resistance.
Administration Releases Final Rule on Employer-Sponsored Wraparound Benefits for Exchange Plans
On March 18, the Departments of Health and Human Services, Labor, and the Treasury published a rule that will allow employers to provide some limited additional benefits to their employees who purchase coverage in Exchanges. Previously, the ACA did not allow employees to receive both an employer-subsidy to buy health coverage and the ACA premium tax credit, frustrating some employers and labor unions. The new rule allows this wraparound coverage on a very limited basis for: (1) part-time employees or (2) all employees for whom the main coverage is unaffordable, but only if the employees purchase a “multistate” plan offered by a health insurer under contract with the U.S. Office of Personnel Management (OPM) and the wraparound coverage is approved by OPM, which may result in improving access to better coverage for some lower income employees.
16.4 Million Adults Receive Health Insurance Coverage from ACA
According to data released by HHS, about 16.4 million previously uninsured people have gained health insurance coverage since the Affordable Care Act was enacted. This number includes 2.3 million young adults (aged 19 - 26) who were able to remain on a parent's plan until age 26, and 14.1 million adults who gained health insurance coverage since October 2013. Overall, the uninsured rate dropped to 13.2% of the population down from 20.3% in 2012. The greatest decline in the uninsured rate was among African Americans and Latinos, declining 9.2% and 12.3%, respectively, since 2013. The total uninsured rate remains lowest among Caucasians at 9.0% compared to 13.2% for African Americans and 29.5% for Latinos. States that chose to expand Medicaid saw the largest decrease in uninsured rates where families with incomes at 138% of the federal poverty level or less experienced a drop of 13 percentage points, nearly twice that seen in non-expansion states.