Welcome to the inaugural issue of "Manatt on Medicaid: Monthly Expansion Recap," a new companion publication to Manatt's weekly health reform highlights newsletter. For those of you laser-focused on Medicaid expansion, the Monthly Expansion Recap will compile expansion activity at the state and federal levels around the nation from the previous month. Read on for the latest in January, and click here for other Medicaid-focused publications within our Manatt on Medicaid series.
Alaska
Two Reports Highlight the Benefits of Medicaid Expansion as Legislature Continues Lawsuit to End It
A report commissioned by the State Legislature analyzing Medicaid expansion dismissed many of the concerns raised by State lawmakers who oppose Alaska's expansion as established by Governor Bill Walker (I) via executive order. Finding that expansion would not trigger a significant increase in non-expansion Medicaid enrollment (the so-called woodwork effect), the report notes that such increases have been seen in both non-expansion and expansion states and is more directly related to ACA implementation overall. The report also finds that the expansion population would not negatively impact the non-expansion population's access to services by monopolizing healthcare services. Finally, the authors find that expansion would lead to a net gain of $170 million annually for the State. The Legislature's lawsuit against the Governor's action begins oral arguments next week. A second report commissioned separately by the State Department of Health and Social Services made recommendations for Medicaid reform including: moving toward a payment model that rewards outcomes and efficiency; paying providers a per-patient care coordination fee; linking providers to each other and to a prescription drug database; and establishing accountable care organizations and managed care.
Arkansas
Governor Notifies HHS of Intent to Extend and Amend Medicaid Expansion Waiver
In line with the recommendations of the Arkansas Health Reform Legislative Task Force, Governor Asa Hutchinson (R) submitted an application to the federal government to extend the State's Medicaid expansion waiver past its current end date of December 31, 2016 and informed HHS Secretary Burwell of his intent to submit an application in spring 2016 to amend the expansion program. The amended program, called "Arkansas Works," may include reforms currently supported by the Governor's Advisory Council on Medicaid Reform and the Task Force, including mandatory premium assistance for employer sponsored insurance, a work referral program, and premiums for beneficiaries with incomes above 100% of the federal poverty level. Following submission of the extension application, the Governor announced that he will meet with Secretary Burwell on February 1 to discuss the proposed changes, and plans to call a special legislative session later this year on Medicaid expansion.
Kentucky
Governor Announces Medicaid Redesign and Expansion Leadership; Medicaid Commissioner Resigns
Despite his initial campaign promise to repeal Medicaid expansion, Governor Matt Bevin (R) announced that the State has begun to redesign its Medicaid program and replace the traditional Medicaid expansion with an alternative model through a federal waiver. The Governor appointed Mark Birdwhistell, the Health and Family Services Secretary under former Governor Ernie Fletcher (R), to develop the program and work with CMS to reach agreement on the new direction, which is likely to include a requirement for enrollees to pay for some of their plan costs, according to the Governor. Governor Bevin hopes to finalize the plan in 2016 for a 2017 launch. The current Medicaid expansion program will continue until the new plan is launched. In the meantime, Lisa Lee, the Medicaid commissioner appointed by former Governor Steve Beshear (D), has resigned. The Governor's spokeswoman said the Administration has begun searching for a new commissioner.
Louisiana
Governor Signs Executive Order to Expand Medicaid, Announces July 1 Launch Date
Governor John Bel Edwards (D), who took office on January 11, signed an executive order to expand Medicaid, fulfilling a campaign promise to do so within 24 hours of his inauguration. The Governor also announced his intention to implement the expanded coverage by July 1, 2016, which the State anticipates would make eligible an additional 300,000 Louisianans. The executive order highlights the federal dollars that have been foregone by Louisiana by not having expanded, as well as anticipated General Fund savings that the State expects to realize as a result of expansion. Rebekah Gee, the new Secretary of the Department of Health and Hospitals, was reported to be optimistic about working through the matters that will require federal approval in time for a July 1 implementation.
Montana
Expansion Launched January 1 with Robust Demand
Approximately 20,000 Montanans were enrolled as of December 31, 2015 in the State's Medicaid expansion, which launched January 1. Montana's expansion plan, referred to as the Health and Economic Livelihood Partnership (HELP) program, is expected to cover an estimated 70,000 new adults and will be administered by the State's Third-Party Administrator, Blue Cross Blue Shield of Montana, which is the nation's first commercial administrator of a Medicaid expansion program.
Nebraska
Bipartisan Group of Lawmakers Introduce Medicaid Expansion Bill
Senator John McCollister (R) and 16 co-sponsors introduced a bill (LB 1032) requiring the State Department of Health and Human Services to submit a waiver to CMS to expand Medicaid by purchasing qualified health plans (QHPs) on the Marketplace. The legislation would enroll the majority of expansion adults into QHPs, excluding the medically frail and those with cost-effective employer sponsored insurance (ESI), for whom an ESI premium assistance program is proposed. Most enrollees with incomes greater than 50% of the federal poverty level would be required to pay a premium of 2% of their income and unemployed enrollees would be referred to a newly-proposed employment program. Three previous Medicaid expansion proposals have failed in Nebraska and some Republican legislators have already voiced their opposition to this bill. It is estimated Medicaid expansion would cover an additional 77,000 Nebraskans.
Wyoming
Committee Votes to Remove Medicaid Expansion From Governor's Proposed Budget
The Wyoming Legislature's Joint Appropriations Committee voted seven to five to remove Medicaid expansion from the 2017-2018 budget proposed by Governor Matt Mead (R). Governor Mead's administration estimated that expansion could extend coverage to over 20,000 Wyoming residents while saving the State's general fund approximately $33.4 million over the next two years. Inclusion of Medicaid expansion in the State budget was considered the best chance for expansion legislation to pass this year, though the Legislature could still consider a stand-alone bill or budget amendment during the legislative session.
National News
President Obama Announces Intent to Provide Full Medicaid Expansion Funding for States Yet to Expand Eligibility
President Obama plans to seek congressional approval to extend enhanced funding for non-expansion states that decide to expand Medicaid, according to a blog posted by the White House. A proposal in the President's 2017 budget will provide any state that takes up the Medicaid expansion option with the same three years of full federal funding and gradual phase down of that funding experienced by states that expanded in 2014. Under current law, funding for Medicaid expansion will be reduced to 95% in 2017 and will phase down to 90% by 2020 for all states, regardless of when they expanded.
Uninsured Hospital Stays Drop Sharply in Expansion States
A new report published in Health Affairs found that in the first two quarters of 2014, uninsured hospital stays decreased dramatically and Medicaid stays increased sharply in states that expanded Medicaid. States that did not expand Medicaid saw very little change in payer mix during the same time period. The authors note that their findings underscore the benefits of expansion for hospitals that serve low-income populations.
Medicaid Expansion Improves Access to Care for Low-Income Individuals Across Models, New Report Finds
According to The Commonwealth Fund's recent report, low-income individuals residing in Arkansas and Kentucky, which have both expanded Medicaid, were more likely to be insured and less likely to have problems paying medical bills or being able to afford prescriptions than low-income individuals living in Texas, a state that has not expanded Medicaid. Between 2013 and 2014, Kentucky and Arkansas saw large drops in the uninsured rate and large increases in the rate of adults with chronic conditions receiving regular care. The authors note that findings across Kentucky's traditional expansion model, Arkansas's private option expansion model, and Texas's non-expansion suggest promising results for Medicaid expansion in improving access for low-income adults and that "deciding whether or not to expand matters much more than deciding how to expand."
Three Million in the Coverage Gap Would Gain Coverage Under Expansion
An issue brief from the Kaiser Family Foundation estimates that nearly three million adults in non-expansion states fall into the coverage gap, meaning they earn too little to qualify for Medicaid but too much for federal premium subsidies on HealthCare.gov. The report notes that the median income limit for parents in non-expansion states is 44% of the federal poverty level while in almost all non-expansion states childless adults remain ineligible. The brief also explores the demographics of individuals in the coverage gap, including geography, race/ethnicity, age and health status.