Uninsurance hit a record-breaking low of 9.1% in 2015; Vermont legislators pass a bill to increase drug formulary and price transparency; and California rolls out its State-funded Medi-Cal expansion to undocumented children.

FEDERAL & STATE HEALTH REFORM NEWS:

Uninsurance Rate at All-Time Low

The national uninsurance rate for all populations hit an historic low in 2015 (9.1%), with the largest coverage gains being among adults earning below 200% of FPL, according to the Centers for Disease Control and Prevention's National Health Interview Survey. Between 2014 and 2015, 7.4 million individuals gained coverage. Uninsurance for adults (ages 18-64) remains higher (13%) than for children (5%). States that expanded Medicaid under the ACA had larger decreases in adult uninsurance rates (18.4% to 9.8%) compared to non-expansion states (22.7% to 17.5%). The uninsured rate for adults had been increasing since 1997 and hit a high of 22.3% in 2010.

RWJF Seeks a Marketplace Plan Selection App Based on Prescription Drug Costs

The Robert Wood Johnson Foundation (RWJF) is offering up to $100,000 in prize money for the development of a mobile or web application that utilizes multiple datasets with formulary, pharmacy network and pricing data to help consumers select a Marketplace plan based on prescription drug costs and coverage. This two-phase "Developers' Challenge" first focuses on strategy and blueprint development, and then requires developers to create a fully functional application. Submissions will be evaluated based on potential market impact (30% of score), sustainable business model (30%), utilization of available data (20%), user interface/user experience design (10%), and conceptual creativity and ingenuity (10%). Challenge registration opened May 22 with Phase 1 strategies due August 14. Winners will be identified by the end of the year.

Massachusetts: 1332 Waiver Not Necessary to Maintain Small Group Market Features

CMS concluded in its letter to the State, as shared by POLITICO Pro, that Massachusetts does not require a 1332 waiver in order to maintain its "shared non-group and small group risk pool," which retains enrollment and rating practices typical of a non-merged market. Massachusetts will therefore be permitted to continue current practices, such as permitting small group enrollees to enroll and renew in health plans on a rolling basis throughout the year. The waiver was determined unnecessary because CMS does not consider Massachusetts to have a merged market for purposes of the single risk pool provision of the ACA.

Vermont: Prescription Drug Bill Aims to Increase Price Transparency On and Off Marketplace

A bill targeting the rising cost of prescription drugs on and off Vermont Health Connect (the State-based Marketplace) passed the Senate and House and awaits Governor Peter Shumlin's (D) signature. S.216 would require Vermont Health Connect carriers to provide formulary information online for enrollees, potential enrollees and providers, including covered prescription drugs, applicable out-of-pocket costs, drug tiers, prior authorization, step therapy and utilization management requirements. The bill also directs the Department of Vermont Health Access to convene an advisory committee to develop options for standard bronze-level qualified health plan benefit designs that include at least one plan with a higher out-of-pocket (OOP) limit on prescription drug coverage than currently established in State law and two or more plans with OOP limits at or below current law. Finally, among other provisions, the bill would also require pharmaceutical manufacturers who sell prescription drugs on which the State spends "significant health care dollars" and for which the acquisition cost has increased by a certain percentage to justify the increases. The State would fine any manufacturer that does not provide documentation $10,000 per violation and would post all written justifications online.

STATE MEDICAID UPDATES:

Arkansas: State Releases Medicaid Expansion Waiver Extension for Public Comment

The Department of Human Services released a draft 1115 waiver extension application to implement Arkansas Works, a plan to extend and reform the State's Medicaid expansion, for a 30-day public comment period prior to submitting the request to CMS. The program, which the Legislature authorized last month, seeks to institute mandatory premium assistance for beneficiaries with access to cost-effective employer-sponsored insurance, premiums for beneficiaries with incomes above 100% of FPL, an incentive system to encourage premium payment and healthy behaviors, and referrals for job training for individuals with no income. Arkansas plans to submit the waiver extension request to CMS this summer which, if approved, will take effect January 2017.

California: Medicaid Now Available for Undocumented Children

Undocumented children under age 19 are newly eligible for comprehensive Medi-Cal coverage in California, as implementation launches for "Health for All Kids," a law passed last October. State officials expect approximately 185,000 of the 250,000 total eligible undocumented children to enroll this year, including 121,000 that will be automatically transferred from a limited benefit package with only emergency care coverage. Governor Jerry Brown (D) allocated $188 million for the State-funded coverage expansion in his recently updated budget proposal.

Kansas: Governor Cuts $56 Million From Medicaid Budget

Governor Sam Brownback (R) announced that more than $56 million of his total $97 million in State spending cuts will come from Medicaid, triggering a loss of $72 million in federal Medicaid matching funds. Approximately two-thirds of the cuts will stem from reducing many KanCare (the State's privatized Medicaid program) provider reimbursement rates by 4%, excluding home-based providers for the disabled and the State's 95 rural critical access hospitals. The remaining cuts will be distributed throughout other areas of the Medicaid program, including a 4% profit margin reduction for the three managed care organizations administering the KanCare program.

Oklahoma: Medicaid Budget and Potential Provider Rate Cuts Remain in Limbo

The Oklahoma Health Care Authority's (OHCA) Board postponed voting on a 25% provider rate cut because the Legislature has not yet finalized Medicaid's State appropriation. OHCA CEO Nico Gomez proposed the cuts in March due to budget shortfall concerns, and later proposed the "Medicaid Rebalancing Act of 2020" as an alternative to the rate cuts. The Act, which has now expired in the Legislature, would have generated funding through an increase in the cigarette tax, extended the State's premium assistance program to individuals earning up to 133% of FPL, and transitioned some women and children currently enrolled in Medicaid into the Marketplace. House Speaker Jeff Hickman is reported to have said he does not think 25% provider rate reductions will be necessary to help fill the State's $1.3 billion budget hole.

Virginia: Governor Vetoes Budget Restriction on Expanding Medicaid

Governor Terry McAuliffe (D) signed the State's 2016-2018 biannual budget and line-item-vetoed a provision that would have invalidated all State appropriations if the governor expanded Medicaid without the permission of the State's General Assembly. The Governor's spokesman said the Governor is not planning to expand Medicaid unilaterally, but that the administration continues to assess opportunities to "bring this money home." House Speaker William J. Howell (R) contested the validity of the line-item veto, stating that "the Governor cannot veto conditions attached to appropriations without vetoing the appropriation" itself.