Manatt Health Introduces Two New Publications: Ongoing Insights into the Latest Healthcare Issues and Actions

In this time of uncertainty for healthcare, real-time, insightful information on key developments is more important than ever. To ensure our publications evolve with your needs, Manatt Health will be replacing the monthly Medicaid expansion recap with two new monthly publications that will help you better track and respond to the emerging policies, legislation and innovations that are reshaping our healthcare environment. “Manatt on Health” will deliver timely updates and analyses of federal and state health reform initiatives. “Manatt on Health: Medicaid Edition” will provide a deeper dive into major Medicaid topics, including the latest news from across the states. This will be the last issue of the Medicaid expansion recap newsletter. Watch your inbox in July for our new publications, and thank you for reading.

National Activity and Analysis

Senate Republicans Release Their ACA Replacement Bill

Senate Republicans introduced a “discussion draft” of their ACA repeal and replace bill, the “Better Care Reconciliation Act” (BCRA), which maintains authority for the ACA Medicaid expansion but eliminates enhanced federal funding over a three-year period beginning in 2021. On June 27, Majority Leader Mitch McConnell (KY) postponed a vote on taking up the measure until after the July 4 congressional recess.

CBO Estimates 22 Million Would Lose Coverage Under BCRA

CBO estimates that BCRA would increase the number of uninsured by 22 million by 2026, compared to current law; CBO previously estimated that 23 million would be uninsured in 2026 under the House-passed AHCA. Approximately 15 million of the newly uninsured would have been Medicaid enrollees under current law. CBO also finds that the bill cuts $772 billion in federal Medicaid funding over 10 years, largely as a result of the reduction and termination of enhanced expansion funding and per capita caps. Although CBO cannot quantify the impact outside of the 10‐year budget window, it notes that savings from Medicaid would continue to grow and enrollment would continue to decline beyond 2026.

Medicaid Work Requirement Proposals Would Be Costly to States

Work requirements for Medicaid eligibility, like those proposed for expansion adults in nine states, would be costly for states to implement and could increase enrollment denials and coverage interruptions, according to a blog post published by The Commonwealth Fund. The work requirements proposed under the AHCA would affect 22 million Medicaid enrollees in 2018—nearly 30% of all enrollees. CMS has not yet approved work requirements in any state, though the Trump Administration has pledged greater flexibility under 1115 waivers to implement new program features, including work requirements.

Medicaid Funding Cuts and Expansion Phase-Out Would Disproportionately Impact Rural Areas

The AHCA’s Medicaid funding cuts and phase-out of Medicaid expansion would disproportionately impact individuals living in rural areas and small towns, according to a report from Georgetown University and the University of North Carolina. Under Medicaid expansion, uninsurance in rural areas dropped 11 percentage points compared to nine percentage points in metropolitan areas between 2008 and 2015.

AHCA Would Reduce Mental Health and Substance Use Disorder Coverage

An Urban Institute brief finds that the House-passed AHCA would reduce access to mental health and substance use disorder (SUD) services. Under the AHCA, states that waive essential health benefits may choose to not cover mental health or SUD treatment, eliminating the need for compliance with parity protections, which only apply to plans with mental health or SUD benefits. The AHCA also phases out Medicaid expansion and caps Medicaid funding, which would reduce the number of adults with access to coverage, including mental health benefits. Eliminating Medicaid expansion would also reduce access to buprenorphine, an effective treatment for opioid use disorder, according to a separate brief from the Urban Institute.

Governors and Stakeholders React to BCRA

Nearly a dozen Republican senators have reportedly expressed reservations with the current version of the BCRA, though most have signaled a willingness to negotiate. Meanwhile, a number of influential Republican governors and national associations are speaking out in opposition to the bill.

Governors Reactions

• Alaska: Governor Bill Walker (I) said that he is “deeply concerned about the potential effects of a one-size-fits-all approach” in Alaska.
• Indiana: Governor Eric Holcomb (R) said that he would “thoroughly examine” the Senate bill, while also noting recent insurer exits from the State’s Marketplace.
• Massachusetts: Governor Charlie Baker (R) stated, “upon a first review, this version falls short and will result in significant funding losses for our State.”
• Nevada: In a joint press conference, Nevada Senator Dean Heller (R) and Governor Brian Sandoval (R) announced their opposition to the bill. Governor Sandoval expressed particular concerns around the phase-out of Medicaid expansion, which would impact 210,000 Nevadans.
• Ohio: Governor John Kasich (R) said he has “deep concerns” with the bill’s potential impacts, particularly for those with drug addiction, mental illness, and chronic health issues.

Trade/Advocacy Associations

• AARP: “We strongly urge the Senate to reject this bill.”
• American Academy of Pediatrics: “The U.S. Senate's health care legislation, at last unveiled today, fails to meet children's needs.”
• American Cancer Society: “The proposed legislation appears to significantly weaken the ability of millions of cancer patients, survivors and those at risk for the disease to find and afford adequate, meaningful health care coverage.”
• American College of Physicians: “The BCRA does not meet—or come close to meeting— the criteria that ACP established that any reforms to current law should first, do no harm to patients.”
• American Hospital Association: “We urge the Senate to go back to the drawing board and develop legislation that continues to provide coverage to all Americans who currently have it.”
• American Medical Association: “Medicine has long operated under the precept of Primum non nocere, or ‘first, do no harm.’ The draft legislation violates that standard on many levels.”
• America’s Essential Hospitals: “Today’s Senate bill makes few material improvements to the deeply damaging House legislation, and might be worse overall.”
• Catholic Health Association: “CHA is strongly opposed to the Senate Better Care Reconciliation Act.”
• Chamber of Commerce: The bill “will provide millions of Americans outside of the employer-based system with more options for coverage at lower costs.”
• Federation of American Hospitals: “Now is the time for the Senate to hit reset and make key improvements to this legislation.”
• National Association of Medicaid Directors: “Medicaid Directors recommend prioritizing the stabilization of Marketplace coverage. Medicaid reform should be undertaken when it can be accomplished thoughtfully and deliberately… No amount of administrative or regulatory flexibility can compensate for the federal spending reductions that would occur as a result of this bill.”
• National Governors Association: “We urge [Congress] to give states sufficient time to review the legislation before proceeding.”

Changing Caseload Mix Reduced Average Per Enrollee Medicaid Spending in Expansion States

Per enrollee Medicaid spending decreased by approximately 5.1% in expansion states from 2013 to 2014, as enrollment of lower-cost expansion adults increased relative to more costly aged, blind and disabled enrollees; per enrollee spending increased by 5.1% in non-expansion states, according to an analysis of CMS’s latest National Health Expenditures Data. On average, states spent $10,986 per Medicaid enrollee in 2014, with significant variation between the highest spending state (New Jersey at $12,614) and the lowest spending state (Montana at $8,238). Total Medicaid spending increased 12.3% in expansion states and 6.2% in non-expansion states.

ACA Improved Affordability, Access and Self-Reported Health

The ACA’s coverage expansions, including the expansion of Medicaid, reduced out-of-pocket medical spending, increased access to preventive services, improved adherence to prescription drugs, increased rates of treatment for chronic conditions, and improved self-reported health, according to a literature review published in the New England Journal of Medicine. The authors did not find conclusive evidence that expanding coverage reduced mortality rates, but noted that it may take more time for the effects of expanded coverage to impact mortality rates.

State News

Colorado: $15 Billion in Federal Funding Would Be Eliminated Under Senate Bill

The rollback of funding for Medicaid expansion would lead to 628,000 fewer Medicaid enrollees in Colorado by 2030, according to the Colorado Health Institute’s (CHI) early analysis of the Senate’s healthcare bill. The State would also lose more than $15 billion in federal funding by 2030.

Ohio: State Senate Aims to Halt Medicaid Expansion Enrollment

The State budget passed by the Senate extends Medicaid expansion for one year but freezes expansion enrollment beginning July 1, 2018 and prohibits current expansion enrollees from re-enrolling if they leave the program. The Legislature will now reconcile different budgets proposed by the House and Senate, including determining the final policy on Medicaid expansion.