Affordable Care Act – Page 4 – The National Academy for State Health Policy

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Mental Health and Opioid Crisis Programs Win Funding Hikes, Efforts to Stabilize Insurance Markets Fail

March 27, 2018/in Policy Blogs Behavioral/Mental Health and SUD, Chronic and Complex Populations, Chronic Disease Prevention and Management, Health Coverage and Access, Medicaid Expansion, Population Health, State Insurance Marketplaces /by NASHP Staff

The new $1.3 trillion budget bill that finances the federal government through September increased funding for a number of health programs that directly impact states, including rural programs to combat the opioid crisis. There were no appropriations made to stabilize Affordable Care Act (ACA) insurance markets.
Under the budget, the Department of Health and Human Services (HHS) receives $78 billion, a $10 billion increase, and the Centers for Medicare & Medicaid Services (CMS) receives $4 billion for administrative expenses, the same as in 2017. Below is a summary of key health related spending in the federal budget.
Opioid crisis: Funding to combat the opioid crisis received a $2.55 billion hike to reach $3.6 billion. The Substance Abuse and Mental Health Services Administration (SAMHSA) received a $1.3 billion increase, bringing it to $5 billion. The legislation maintains the ban on using federal funds for the purchase of syringes and needles, but allows communities with marked increases in HIV and viral hepatitis infection rates to use federal funds for services such as substance-use counseling and treatment referrals.
The SAMHSA budget includes $1.9 billion for the Substance Abuse Block Grant, similar to last year’s appropriation, an $11 million increase in criminal justice funding (bringing it to $89 million, which includes $70 million for drug courts), and $1.7 billion to address opioid and heroin abuse (an increase of $1.5 billion), including $500 million for the state opioid response grants authorized in the 21st Century Cures Act, along with funding for programs authorized in the Comprehensive Addiction and Recovery Act.
One of the new initiatives was $105 million to expand the National Health Service Corps (NHS) to offer opioid and substance use disorder treatment in rural and underserved areas. NHS substance use disorder counselors will be eligible for loan repayment. About $30 million will be devoted to the new Rural Communities Opioid Response initiative within the Office of Rural Health.
Mental health programs: Funding for mental health programs increased about 17 percent to $3.2 billion, which includes $100 million for Certified Community Behavioral Health Clinics. That program, midway through a two-year demonstration program at 67 centers, has been used to combat the opioid crisis.
The bill also increases funding for Mental Health First Aid to $19 million and gives first responders training to help connect people having mental health or addiction crises to community help.
According to the National Council for Behavioral Health, funding was maintained for the Primary and Behavioral Healthcare Integration program, which has provided screening and treatment for conditions like diabetes and heart disease for more than 98,000 individuals living with serious mental illness or addiction at more than 213 sites.
Among the mental health programs funded by the 21st Century Cures Act, including the Mental Health Block Grant, are the National Traumatic Stress Network, the National Child Traumatic Stress Initiative, Mental and Behavioral Health Training Grants, Assisted Outpatient Treatment, and the National Suicide Prevention Lifeline. Of the new funding, 15 percent will go to states with the highest mortality rates related to opioid-use disorders.
The Health Resources and Services Administration receives $7 billion, including $315 million for the Children’s Hospital Graduate Medical Education program, $110 million for the Healthy Start program, and $652 million for the Maternal and Child Health Block Grant.
The legislation increased funding for the National Institutes of Health (NIH) by $3 billion, bringing it to $37 billion, and the Centers for Disease Control and Prevention (CDC)’s budget increased $1.1 billion, bringing it to $8.3 billion.
Impact on ACA’s public health provisions: Much of CDC’s increase results from reallocating $801 million from the ACA’s Prevention and Public Health Fund and $240 million from its Nonrecurring Expenses Fund. The CDC’s Public Health Preparedness and Response programs will get a $45 million boost, bringing it to $1.45 billion.
New ACA oversight imposed: Congress did not fund efforts to reduce premiums through cost-sharing reduction payments, nor did it fund any reinsurance programs that would allow states to spread the financial risk for high-risk individuals across insurance markets. Congress did impose more reporting requirements on ACA programs.

CMS must now notify Congressional committees two business days before any ACA-related data or grant opportunities are released to the public.
New “transparency” language requires the Administration to publish ACA-related spending by category since its inception.
The Administration must publish information on the number of employees, contractors, and activities involved in implementing, administering, or enforcing ACA provisions.

Congressional Leaders Propose ACA Insurance Stabilization Measures in Omnibus Budget Bill

March 20, 2018/in Policy Blogs Cost, Payment, and Delivery Reform, Health Coverage and Access, Health System Costs, Medicaid Expansion, State Insurance Marketplaces /by Christina Cousart

On Friday, March 23, 2018, Congress faces an important deadline to pass an omnibus budget bill to avert a government shutdown. Measures to bolster states’ Affordable Care Act (ACA) markets are currently not in the bill, but a group of lawmakers have proposed an amendment that could strengthen and stabilize insurance markets.
Sens. Lamar Alexander and Susan Collins and Reps. Greg Walden and Ryan Costello released legislative language earlier this week that includes several significant provisions, including allocation of more than $30 billion to fund state reinsurance or high-risk pool programs.
A Congressional Budget Office analysis of the bill estimates the funding would decrease premiums on average by 10 percent in 2019 and 20 percent in 2020 and in 2021. Under this plan, middle-income consumers (earning more than 400 percent of the federal poverty level-FPL) would experience the greatest gains from the reinsurance/high-risk pool program. However, an accompanying analysis suggests the bill would lead to coverage losses due to consumers earning between 200 and 400 percent of FPL dropping their coverage as a result of federal funding for the cost-sharing reduction (CSR) program, which offers smaller federal subsidies for health insurance for this population.
Below is a summary of the major components of the Alexander-Collins-Walden-Costello proposal.
Reinsurance/High-Risk Pool Funding

Federal funding for a reinsurance or high-risk pool program. The program would allocate $10 billion per year from 2019 to 2021 to states to operate a reinsurance or high-risk pool program, and $500 million in 2018 to cover the costs of creating the program. The program would exist under ACA’s Section 1332 waiver authority, but exempts the program from budget neutrality and state matching requirements typically associated with 1332 waivers. The proposal gives states latitude to define their high-risk pool or reinsurance program, but authorizes the US Department of Health and Human Services (HHS), in consultation with the National Association of Insurance Commissioners (NAIC), to determine how funds should be allocated to states. HHS will operate a federal default program in states that do not pursue their own reinsurance or high-risk pool program. It also provides an expedited 45-day approval process for states seeking 1332 waivers to establish their program.

Changes to ACA’s 1332 Waiver Program

Streamlines administrative procedures for 1332 waivers. Extends flexibility by allowing states to pursue waivers if they secure certification from their governors (rather than securing state legislative approval.)
Loosens affordability standard for 1332 waivers. Changes the requirement that coverage under a 1332 waiver must be “as least as affordable” as coverage under the ACA. Instead, it establishes that coverage be of comparable affordability for low-income individuals, individuals with serious health needs, and other vulnerable populations.
Loosens budget neutrality requirements. Instead, mandates that the waiver should not increase the federal deficit over the term of the waiver and over the 10-year budget plan submitted in conjunction with the waiver application. It also provides flexibility so that HHS may consider the budgetary effects on other federally-funded programs (e.g., Medicaid) in assessing budget neutrality requirements.
Expedites waiver approvals: Shortens the time during which HHS must approve or deny a waiver from 180 to 120 days. Provides an expedited 45-day approval process for emergency waivers (where states are at risk of excessive premium increases or bare counties) and copycat waivers (waivers substantially similar to that approved in another state).
Extends the waiver approval period. Allows HHS to approve waivers for up to six years (as opposed to five) and allows waivers to be approved for additional six-year periods.
Limits suspension of waivers. Ensures that HHS cannot suspend or terminate waivers prior to the end of the waiver period unless the state has materially failed to comply with the terms of the waiver.
Requires HHS to develop model waiver language. Within 60 days, HHS must develop model waivers that could include plans to establish a reinsurance program or invisible high-risk pool, expand insurer participation and access to affordable plans, encourage value-based insurance design, and provide varied health plan benefit designs.
Eliminates all 1332 regulations and guidance issued prior to the enactment of this proposed law.

Funds the Cost-Sharing Reduction (CSR) Program

Appropriates funding for CSRs from 2017-2021. The appropriation would cover costs incurred under the CSR program from Oct. 1, 2017, through Dec. 31, 2021. Insurers would only be eligible for CSR payments in 2018 if the insurer did not otherwise increase its premiums to account for elimination of program funding. (Read more about CSRs.)

Extend Availability of Catastrophic (Copper) Health Plans

Removes restrictions on catastrophic health plans. Eliminates restrictions barring individuals older than age 30 from purchasing catastrophic health plans.
Merges catastrophic enrollees into a single risk pool. Ensures that catastrophic enrollees are included as part of the individual markets single risk pools.

Invests in Marketplace Marketing and Outreach

Dedicates federal funds for federal marketplace outreach and enrollment activities. Dedicates $105.8 million collected from marketplace issuer fees for outreach and enrollment activities in 2019 and 2020. HHS may give grants to states for the purposes of fulfilling these activities.
Requires reporting on enrollment and outreach programs. Requires HHS to issue biweekly enrollment reports during the 2019 and 2020 open enrollment seasons. Requires HHS to issue annual summary reports on Navigator performance and advertising and outreach activities conducted for in 2019 and 2020.

Regulations Related to Multi-State Compacts

Requires NAIC to issue regulations under Section 1333 of the ACA. Section 1333 allows states to form “health care choice compacts” under which insurers would be permitted to sell qualified health plans to consumers in any state participating in the compact.

Short-term Limited Duration Plans

Requires consumer education about limitation of short-term plans. Requires state insurance commissioners to require short-term plan insurers prominently display the fact that short-term plans do not meet the coverage and benefit requirements of ACA-qualified health plans in marketing materials, contracts, and application materials.
Codifies state legislative and regulatory flexibility over short-term plans. Establishes that states may regulate short-term plans as long as state regulations do not interfere with federal requirements.

How Elimination of Cost-Sharing Reduction Payments Changed Consumer Enrollment in State-Based Marketplaces

March 20, 2018/in Policy Blogs Eligibility and Enrollment, Health Coverage and Access, Medicaid Expansion, State Insurance Marketplaces /by Christina Cousart

State health policymakers are eagerly waiting to see if Congress’ omnibus budget bill released this week will attempt to stabilize Affordable Care Act (ACA) insurance markets by reinstating ACA’s cost-sharing reduction (CSR) payments. An early proposal by US Sen. Lamar Alexander would fund the cost-sharing subsidies, which reduce a family’s out-of-pocket health care costs, retroactively from 2017 through 2021.
While this is a potential solution to how the federal government can subsidize health insurance for some consumers who purchase insurance through ACA markets, data collected by the National Academy for State Health Policy (NASHP) illustrates the complex interplay between marketplace subsidies and consumer decisions that states face.
States and insurers demonstrated incredible dexterity in quickly redesigning insurance plans in response to the Administration’s late-in-the-game decision to end CSR payments in October 2017. The result was that consumers faced new confusion as insurance plans were revamped and repriced in 2018, resulting in major enrollment shifts both off and within health insurance marketplaces. Below, NASHP presents 2018 enrollment data collected by state-based marketplaces (SBMs), which closely manage their own exchanges, highlight how state actions to address the loss of CSR funding influenced market decisions in 2018. Key findings indicate:

Decreased enrollment in marketplace silver plans, especially among consumers who no longer had access to CSR subsidies and who did not qualify for tax credits;
Enrollment growth in marketplace bronze plans;
Mixed enrollment growth or declines in gold plans; and
Mixed growth, and some declines in the total number of subsidized enrollees in the marketplaces.

The findings do not provide a complete picture of what has occurred in markets nationwide, as the data represent only 10 states and do not include complete information about off-marketplace enrollment patterns or full consideration of other factors that may have influenced enrollment during the 2018 enrollment period, including shortened enrollment periods and other factors influencing premium costs. However, they provide a glimpse into how states’ markets reacted to federal policy shifts and the serious ramifications of CSR changes wrought by Washington on consumer purchasing behaviors.
Background
Under the CSR program, insurers are required by federal law to cover certain out-of-pocket expenses (e.g., deductibles, copayments, coinsurance) for enrollees with incomes below 250 percent of the federal poverty level (FPL). CSRs are only available through silver-level health plans purchased on the state or federal health insurance marketplaces. Typically, silver-level plans have an actuarial value (AV) of 70 percent, meaning that the plan must cover in aggregate at least 70 percent of the health care costs received under the plan. CSRs change the AV of plans by varying amounts depending on the income of the qualifying consumer (see Table 1).

Table 1. Qualifying for CSRs
To qualify for the ACA’s CSR program, consumers must purchase silver-level health plans and have incomes between 100 to 250 percent of FPL, which in 2018 ranged from $16,642 to $30,150 for individuals and from $33,948 to $61,500 for a family of four.
CSR-Eligible Plan	Standard Silver	Silver 73	Silver 87	Silver 94
Income	Any	200-250% FPL	150-200% FPL	100-150% FPL
Actuarial Value	70%	73%	87%	94%

The ACA designed the CSR program so that insurers would be reimbursed for expenditures incurred under the program, and would be paid back whatever costs were charged to ensure that consumers who received services were only paying out-of-pocket expenses in line with the AV of their CSR-eligible health plan.
Questions about the exact language of the CSR law spurred litigation over whether it was legal for the government to issue reimbursements without an explicit appropriation for the program. Pending the outcome of this litigation, the Administration stopped issuing CSR reimbursements.
Response to Elimination of Federal CSR Reimbursements
After the Administration stopped CSR payments last October, most state regulators directed their insurance carriers to adjust their 2018 premium rates to account for CSR losses. Not responding to the issue would have left insurers exposed to the lost federal funding, possibly resulting in insurers opting to not participate in markets. As CSR payments most directly affected silver-level plans sold on the marketplaces, most states and carriers opted to load premium increases onto silver-level plans offered through their insurance marketplaces. The Congressional Budget Office (CBO) estimated that silver plan premiums increased by 10 percent on average in 2018 in response to elimination of CSR funding. Among the states that operate their own marketplaces, only three did not load the increases onto their silver plans. These included:

Colorado, which advised its insurers to distribute premium increases across all metal levels to mitigate the effect on silver-level plans;
Vermont, which similarly distributed premium increases across all metal levels due to uncertainty over the effects of the changes on its uniquely-merged individual and small group markets; and
Washington, D.C., which calculated that elimination of the CSR payments would have minimal effect on its market due to low enrollment of CSR-eligible individuals.

CSR Loading Had Differing Impacts on Subsidized and Non-subsidized Consumers
Silver-loaded premiums shifted the affordability and value of plans offered through marketplaces, distorting costs and participation in the markets. For consumers who were eligible for premium tax credits to subsidize their coverage (82 percent of marketplace consumers in 2017), some coverage options became even more affordable. This is because the tax credit is calculated based on the second-lowest-cost silver plan available to a consumer. As a result, as silver premium costs increased in response to CSR elimination, so did the total amount of tax credit a qualifying consumer could receive. This increase in tax credits — combined with more marginal increases in premiums for bronze- and gold-level plans than for silver plans — meant that both bronze and gold plans became more affordable for these consumers. Availability of these more affordable plans may have attributed to the enrollment increases seen in some states’ marketplaces.
While the silver-loading strategy served the important purpose of insulating lower-income consumers from CSR losses, it resulted in increases costs for consumers who were ineligible for tax credits. The increased premiums escalated affordability concerns and forced many of these consumers to seek cheaper options, either by enrolling in lower-value bronze plans or by disenrolling from marketplace coverage entirely. These changes had important repercussions for both consumers and insurers participating in the markets.

Distorted market competition and enrollment. CSR payment elimination had disproportionate effects on marketplace insurers as they adjusted premium rates differently based on the proportion of CSR-eligible consumers enrolled in their plans. Insurers with a greater proportion of CSR-eligible individuals increased premiums by a higher amount than those with fewer CSR-eligible enrollees. In California, for example, CSR-induced premium rate increases ranged from 8 percent to as much as 27 percent. This lead to a distortion of premium prices between insurers and generated shifts in market share as consumers switched to insurers whose plans had smaller premium growth.
Increased consumer susceptibility to out-of-pocket spending. The lower-cost bronze plans, which offer less coverage, enticed more consumers to purchase them. While this lowered consumers’ annual spending on premiums, the lower AV of bronze plans means that these consumers are at greater risk of higher out-of-pocket spending. This is especially true for consumers who were once CSR-eligible but switched from silver to bronze plans without considering the resulting out-of-pocket costs.
Complete disenrollment from individual market coverage. While the total impact of CSR changes on enrollment cannot be known without additional data about off-marketplace enrollment, it is highly probable that premium increases and confusion over the changes in premium costs spurred some non-subsidized consumers to drop insurance coverage altogether. These drops in coverage led to altered market risk pools and premium increases.

Consumers Shifted Purchasing Patterns in 2018
While it is not possible to determine the absolute effect of CSR elimination on consumers’ behavior, initial data collected by the 10 SBM states indicate that state and insurer decisions to silver-load influenced consumers’ choices in 2018. Key patterns that emerged include:

Disenrollment in silver-level health plans, especially among unsubsidized consumers: While the majority of consumers from these states continued to select silver-level health plans, there was an almost a universal drop in the proportion of enrollees selecting silver-level plans (exceptions include Colorado and Vermont, which did not silver-load, and Minnesota, whose Basic Health Program for consumers earning up to 200 percent FPL offset the effect of CSR losses.) As expected, shifts away from silver plan selections were more common among individuals who did not receive tax credits.
Growth in enrollment in bronze plans: There was almost universal growth across all states in the proportion of enrollees who selected bronze plans, with the exception of Minnesota and Vermont, which only saw marginal reduction in bronze plan selections.
Varied growth or disenrollment in gold plans: Changes in gold selections vary across states, from Colorado where the proportion of gold enrollments dropped by nearly one-third to Maryland where gold enrollments increased nearly four-fold.

Different trends in enrollment among subsidized and unsubsidized consumers in these states indicate that CSR policies did not by themselves drive shifts in enrollment. It is also likely that the total effect of the CSR issue varied greatly across all states, depending on several factors including:

The proportion of unsubsidized marketplace consumers in the state — especially those enrolled in silver plans who were most susceptible to silver-loaded premiums; and
Baseline premium prices of bronze or gold alternatives for consumers seeking to shift away from silver plans.

Investments in education and outreach also affected how consumers responded to CSR-loading in various states. The Massachusetts’ Health Connector, for example, was among several states that took extensive steps to urge its unsubsidized silver-plan enrollees to seek more affordable options either on or outside the marketplace. Connector officials reported that they were successful in moving 82 percent of affected enrollees into new coverage plans. This meant that 18 percent of unsubsidized consumers remained in silver plans, despite its aggressive outreach efforts to inform consumers about the availability of more affordable options.
Outlook for States and Markets Pending Federal Action
While this information provides a snapshot of enrollment patterns in 2018 from 10 states, it indicates that responses to the CSR funding elimination had diverse effects on states’ markets and consumers. Similarly, if CSR funding is reinstated, the effect will reverberate differently across states’ markets and consumers. Significant changes could mean another year of disruption for insurers, who will need to adapt products and rates based on shifting federal policy, and consumers, who may need to once again actively shop around and switch plans next year. The CBO estimates that 500,000 to 1 million consumers would become uninsured from 2020 to 2021 if CSR funding was reinstated. These would mostly impact consumers with incomes between 200 to 400 percent FPL who would no longer would benefit from tax credits, which are larger than CSR subsidies.
While states and insurers rapidly responded to the Administration’s decision to end the CSR program in 2017, an absence of clear policies and continuous last-minute changes will spur unrest in markets. Without sustainable policies to stabilize the individual market, consumers will face higher costs, confusion, and anxiety about whether insurance coverage will be available when they need it.
While CSR funding remains a concern to some states, states are also seeking solutions that could bring immediate stability to markets, such as federal reinsurance funding. Whatever policies are implemented this spring, time is of the essence as state regulators are already in active negotiations with their insurers for 2019 offerings, with rate filings expected in some states as early as May. Ideally, future federal policies will grant states sufficient time and flexibility to respond to policy changes in a manner most appropriate for their markets.

Click here to view a chart comparing marketplace enrollment by metal level in California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Minnesota, Rhode Island, Vermont and Washington State.

Federal Promotion of Short-Term Health Insurance Plans: How Will These Plans Impact State Insurance Markets?

March 6, 2018/in Policy Blogs Essential Health Benefits, Health Coverage and Access, Medicaid Expansion, State Insurance Marketplaces /by Christina Cousart

Last month, the departments of the Treasury, Labor, and Health and Human Services released a proposed rule that changes the definition of short-term, limited-duration insurance (STLDI) plans to make it easier to sell the plans, which do not have to adhere to Affordable Care Act (ACA) requirements, such as covering people with pre-existing conditions.
This proposed rule is the latest federal action to implement President Trump’s Executive Order promoting “health care choice and competition” in the United States. The cumulative effect of this proposed rule plus elimination of the individual mandate penalty and increased availability of association health plans under another pending rule is expected to significantly affect states’ insurance markets in 2019.
STLDI is insurance that individuals can purchase on a short-term basis, particularly consumers who need to fill a gap in coverage — such as when they change jobs and need interim coverage until their new employers’ insurance kicks in. Short-term plans are largely unregulated and exempt from many federal regulations, including several enacted under the ACA, including:

Guaranteed issue: Requires insurers to cover individuals regardless of pre-existing conditions;
Community rating: Prohibits insurers from charging consumers more for coverage based on their health rating;
Annual and lifetime limits: Prohibits insurers from setting annual and lifetime dollar limits on the amount of their plans’ coverage;
Medical-loss ratio: Requires insurers to spend at least 80 percent of premium dollars received on health care services; and
Essential health benefits: Requires all plans to cover certain benefits within 10 defined categories, including hospitalizations, maternity care, mental health and substance use disorder services, and prescription drugs.

Often, short-term plans are designed as low-cost, low actuarial value products targeting healthy individuals. States can impose their own laws and regulations over STLDI policies – even stricter than federal regulations. However, currently states have differing levels of regulatory oversight over STLDI. Given the federal government’s proposal to enhance the sale of these plans, some states are now reviewing and tightening their legislative reach over these short-term plans to make sure the consumer protections they want are in place in their markets.
Major Rule Changes Proposed
The proposed rule includes several changes aimed at expanding the availability and access to STDLI plans. The rule:

Allows for short-term plans to be sold to consumers covering a period of less than 12 months;
Allows for individuals to reapply for short-term plans, which had been prohibited under prior federal regulation;
Stipulates that consumers who purchase these plans must be informed that these short-term plans may not comply with ACA requirements; and
Continues to allow federal and state governments to not enforce STLDI regulations codified in 2016 insurance regulations.

The rule would be effective 60 days after enactment of the final rule, meaning that short-term plans meeting these parameters could be sold as early as this year.
This rule contrasts with a 2016 rule that stipulated that short-term plans could only be sold for a period of three months and limited consumer’s ability to renew STLDI coverage. The 2016 rule was designed to limit any negative impact that short-term plans could have on premium costs and risk mix of plans sold by state ACA marketplaces.
Effect of STDLI on State Insurance Markets
There is no question that the proposed rule will have a significant impact on most state markets. While short-term plans provide consumers with low-cost insurance options, the coverage is expected to provide limited benefits with high deductibles, putting consumers at risk of large out-of-pocket costs if they need to use comprehensive health services. Moreover, increasing the availability of short-term plans will draw consumers out of the individual market risk pool and could raise the risk of adverse selection—or unhealthy risk mix-in other individual market plans, including plans offered by state and federal health insurance marketplaces.
If enacted this year, the rule could lead to insurer instability in 2018. These carriers are locked into contracts and pricing that depended on a defined risk mix of customers – including a mix of healthy individuals and those with costly health care needs. Insurers could experience financial losses if healthy consumers leave these plans and enroll in STLDI plans this year. The rule will also lead to premium increases for individual market coverage offered in 2019 and beyond. The proposed rule estimates that 100,000 to 200,000 individuals will drop out of marketplaces to enroll in short-term plans in 2019.
Enrollment in short-term plans will be exacerbated by the elimination of the individual mandate penalty passed in the December 2017 Tax Reform Bill. Without a mandate requiring people to purchase “minimum essential coverage” (insurance that meets federal regulatory standards), consumers will be free to purchase de-regulated coverage options like STLDI. A recent Urban Institute analysis estimated that 4.2 million individuals would enroll in STLDI plans in 2019 if the rule were enacted as proposed. The report also estimates that individual market premiums will increase by an average of 16.4 percent in 2019 due to the cumulative effect of the loss of the individual mandate penalty and the enactment of the STLDI rule. See The Potential Impact of Short-Term Limited-Duration Policies on Insurance Coverage, Premiums, and Federal Spending for state-by-state estimates.
State Actions to Address STLDI
States have authority to impose their own regulations over short-term plans sold in their markets. Some have explicitly exempted short-term policies from benefit and other requirements imposed on other health insurance products. This enables issuers to offer low-cost options in certain states that serve as insurance protection against catastrophic events, but do not provide comprehensive coverage. Others have heighted restrictions over the sale of short-term plans in order to:

Preserve a healthier risk mix in their individual markets; and/or
Protect consumers against misleading marketing tactics practiced by some STLDI issuers and exorbitant out-of-pocket costs that might result.

As described in the Urban Institute’s report, Massachusetts, New Jersey, New York, Oregon, Vermont, and Washington currently have laws that would prevent an expansion of STLDI. Michigan and Nevada have laws to “limit STLD policy expansion.”
A few state legislatures have taken up STLDI insurance legislation during their current sessions. Proposed legislation in Missouri (HB 1685) and Virginia (SB 844) will conform state STLDI policies with those under the proposed federal rule, specifically to allow the sale of short-term plans that cover up to 364 days. Additional legislation is pending in Missouri (SB 860) to exempt STLDI from meeting requirements imposed on other health insurance products while also enforcing specific disclosure notices that STLD issuers must provide to consumers to inform them about the limited scope of this coverage.
Legislation in New Jersey and Vermont would state tighten regulation over STLDI. New Jersey’s (S 1210) legislation would require STLDI policies to meet the standards of other health insurance products. Vermont’s (H 892) would institute the 2016 federal regulation requirements by restricting the sale of products to only three months and limiting the renewability of short-term plans.
The release of this proposed rule carries additional weight for states that are currently in the midst of negotiating 2019 health insurance rates with their carriers. Absent strong state regulations, some states may have to set rates without knowing what will be enacted in the final rule.
The National Academy for State Health Policy (NASHP) will continue to monitor state actions during the current legislation session and rate-filing season to share critical information about the impact of these policies on states. Comments on the proposed rule are due April 23.

When It Comes to Selling Health Insurance, State Control Matters

March 6, 2018/in Policy Blogs Essential Health Benefits, Health Coverage and Access, State Insurance Marketplaces /by Corinne Alberts

According to data released by the National Academy for State Health Policy (NASHP), states that closely manage their Affordable Care Act (ACA) marketplace operations and outreach led the nation in enrolling consumers. State-based marketplaces (SBMs) that used carefully-crafted marketing campaigns achieved stability and increased enrollment by 0.2 percent, while states with federally-managed marketplaces saw enrollment fall by 5.3 percent.
During 2017, there was intense consumer confusion about health insurance due to Congressional debate over repeal-and-replace of ACA, the elimination of federal marketing dollars, and shorter enrollment periods in many states. SBMs had to design their consumer outreach to cut through the confusion and provide clear and accurate information to their constituents.
The 12 SBMs and five SBMs that control their operations but use the federally-facilitated marketplace and website (SBM-FP) are in charge of the entire enrollment process. They shepherd consumers through the application and health plan shopping process, and explain how consumers can fully utilize their coverage. As the “coverage facilitator,” state marketplaces play an essential role in educating consumers about their health insurance choices to ensure they choose the best plan to meet their needs. SBMs coordinate with other state entities, including Medicaid and leaders in their communities, use data to accurately target uninsured and disadvantaged populations, and effectively communicate relevant information about health insurance.
Bottom line: SBMs had strong enrollment because of their understanding and involvement in their communities and their effective marketing.

SBMS Prepared Consumers for Shorter Enrollment Periods
This year, the federal government halved the previous open enrollment period for the marketplaces from 92 days (Nov. 1-Jan. 31) to 45 days (Nov. 1-Dec. 15). Ten SBMs used their flexibility and extended their enrollment periods, including three SBMs that maintained the same enrollment period as last year. This meant that many states had different enrollment timetables from years past, and in some cases, there was a significant difference in the SBM enrollment timelines from the 34 states that used the federally facilitated model (FFM). SBM state officials aptly anticipated that the varying deadlines would cause confusion, and that customers who were not aware of reduced timeframes would miss enrolling. Following months of federal repeal-and-replace debate and chipping away at coverage, many states focused on early marketing and consumer education to broadcast exactly when their open enrollment periods would occur.
To get a jump-start on marketing in a shortened open enrollment period, Rhode Island’s marketplace Healthsource RI began their promotion campaign in September, a full month earlier than the prior year. Its “We Work for You” campaign stressed that the marketplace was still open and that they were available to help consumers find a low-cost, high-value plans that worked for them. Phase 1 of its outreach plan focused on building awareness of the marketplace and the enrollment timetable. Phase 2 concentrated on educating consumers about the website’s “decision support tools” available to consumers who were actively shopping for insurance.

Nevada Health Link is an SBM that used the federal platform and as a result was bound to the federal 45-day sign-up period. The state focused on raising awareness of new enrollment deadlines by saturating the media with strong television and radio ads to remind consumers of the importance of buying health insurance and of the fast-approaching deadlines. Nevada Health Link focused on the message: “You can’t afford not to be insured” throughout its shortened enrollment window.
SBMs Used Data to Market Smart
The individual market serves 15 percent of the total US population, including those without insurance, compared to 49 percent of Americans who have coverage through their employers. This makes prospective marketplace consumers one of the smaller groups to target in an insurance marketing campaign. Designing a cost-effective marketing strategy for this population was important. Nowhere was that more apparent than in Kentucky. For the first time this year, Kentucky and other SBMs that used the federal platform had access to detailed data about their targeted enrollment population from the Centers for Medicare & Medicaid Services (CMS).
The Kentucky Health Benefit Exchange compared enrollment data from 2016 to 2017 to develop marketing aimed at consumers who had dropped out of marketplace coverage. Kentucky also used this data to conduct a highly targeted, direct response texting campaign. It texted consumers reminders about enrollment deadlines and information about in-person assistance available in geographic regions across the state.
Marketplaces also used data to identify areas of consumer confusion and, in response, developed improved educational resources and messages to dispel misinformation and attract consumers. Over the last two years, Covered California held 46 focus groups in five languages and surveyed more than 4,000 people in order to identify effective outreach strategies. Covered California learned that while awareness of the marketplace was high (96 percent of those surveyed were aware of the marketplace), continued education about the availability of financial assistance was needed. It discovered that 73 percent of uninsured, subsidy-eligible people didn’t know they would qualify for tax credits that would lower their insurance costs. The marketplace used this information to shape its 2018 campaign and intensified messaging about the availability of financial assistance.
SBMs Used Community Partnerships to Reach More Consumers
Over the last five years, SBMs have built relationships with community leaders, organizations, and local agents and brokers. Through these partnerships, SBMs reached consumers through “trusted influencers” in their own communities and expanded the number of experts providing enrollment assistance.
This year, Access Health CT (AHCT) once again collaborated with local elected officials and community leaders and influencers to host outreach events during open enrollment. In total, AHCT conducted over 60 events in the seven-week period. In a state like Connecticut, which had an uninsured rate of 3.5 percent in 2016, community-based enrollment assistance is important in order to reach a very small and increasingly difficult–to-reach uninsured population. The marketplace also worked to improve the use of in-person “storefronts,” using “heat maps” of uninsured populations and current membership to strategically identify locations for these facilities. AHCT opened 10 storefronts to provide in-person assistance near those communities.
Your Health Idaho trained more than 900 agents and brokers, expanded broker-support hours, and deployed a new data access portal that allowed consumer connectors to view eligibility history and results for tax credits. Idaho is a rural state, so the exchange focused on sending the message that no matter where consumers lived, local enrollment assistance was available. More than 70 percent of Idaho’s enrollments were made through an agent or broker, reflecting the state’s strong engagement with the broker community.
MNsure, Minnesota’s state marketplace, used its network of 1,900 assistors as an echo chamber for their statewide advertising efforts. Anticipating public confusion over the state’s enrollment deadline, the assistor network shared messaging that warned consumers about important dates and the availability of in-person assistance.
Anticipating Future Challenges, SBMs Continue to Improve Marketing and Outreach
While the 2018 enrollment period has closed, SBMs continue to be active coverage facilitators for their insurance products. They perform a critical role in educating consumers about their coverage and, where appropriate, continue to provide opportunities for consumers to enroll via special enrollment periods.
Through targeted messaging, community engagement, and direct outreach, SBMs continue to work with people in the individual market to ensure that they make the right choices when buying insurance. The confusion and instability that marketplaces faced this year may continue, as the repeal of the individual mandate and new, restrictive federal rule-making lead many to expect that premiums may increase and insurers may withdraw from the individual market. SBMs will be able to learn from their recent successes and refine and improve their marketing and outreach strategies in the future.

Considering a State Individual Mandate? What Policymakers Can Learn from Massachusetts’ Experience and Maryland’s Proposal

February 20, 2018/in Policy Blogs Health Coverage and Access, State Insurance Marketplaces /by NASHP Writers

As states reach the midway point of their 2018 legislative sessions, many are looking for ways to stabilize their insurance marketplaces now that Congress has effectively eliminated the individual mandate that required all residents to be insured or pay a penalty. Without guaranteed participation by healthier consumers, marketplaces risk having more high-cost consumers in their pools, which will drive up premiums and destabilize markets.

How would a state individual mandate work?
View the Feb. 7, 2018, webinar featuring Massachusetts officials explaining how they did it here.

Several states are considering implementing a state-based mandate, with bills proposed in Hawaii, Maryland, New Jersey, Vermont, and Washington. Connecticut recently released a study about the effect of a mandate and a Washington, DC, working group has adopted a recommendation to implement a mandate. Policymakers are looking carefully at how Massachusetts, which has the lowest uninsured rate in the country, implemented its mandate 11 years ago.
Key Lessons Learned from Massachusetts
Earlier this month, the National Academy for State Health Policy (NASHP) hosted a webinar to explore implementation of a state-based mandate. During the event, Massachusetts officials described their mandate and identified three key elements that state policymakers should consider. (View Massachusetts’ webinar slides here.)

Coverage standards: What is the minimum standard of coverage that individuals must purchase in order to be considered insured and avoid a penalty?
Affordability standards: Are there limits that should be put in place to exempt consumers from having to purchase coverage that is unaffordable?
Penalties/exemptions: What should the penalty be for individuals who do not purchase coverage? What exemptions should be offered to avoid the penalty? How should penalty revenue be used?

State officials also discussed operational considerations when crafting a mandate, including:

Cost and governance: What agencies should have authority over monitoring and enforcement, and at what cost?
Outreach and education: What educational and outreach efforts are required to ensure that consumers are adequately informed about the mandate? When and how should educational efforts occur?

Massachusetts officials described the mandate as an “integral” part of their overall coverage strategy. They explained that the mandate has provided many indirect benefits to their state. Notably, the detailed information the program has provided about consumers who lack coverage has enabled the state to design effective policies and fine-tune outreach strategies to reach these consumers and enroll them in affordable programs.
Officials also described the benefits of instituting a common benefit “floor” for coverage, which has helped Massachusetts:

Provide a quality standard of coverage that benefits all consumers; and
Insulate the state’s insurance market from detrimental fragmentation, and consumer gaming that can be exacerbated by the existence of limited coverage options.

Such system gaming may be of particular concern pending recently proposed federal actions to grant greater flexibility over short-term and association health plans.
Massachusetts officials acknowledged the difficulty of measuring the direct impact of the mandate on reducing the number of uninsured. The state’s mandate evolved over time and did not occur in isolation. It was part of a package of reforms designed to improve affordability and access in Massachusetts. Collectively, these policy decisions have resulted in Massachusetts achieving the lowest uninsured rate in the country (currently at 2.5 percent). Recent data released by Massachusetts’ Health Policy Commission show that Massachusetts has the second-lowest average premium costs for benchmark plans sold through its exchange, a clear sign of market stability.
Ultimately, any state considering a mandate must decide how to balance each of these considerations based on its intent to:

Improve affordability and stability;
Establish a quality standard for required coverage; and
Ensure the program is not overly burdensome on consumers or state systems.

Maryland’s Proposed Health Insurance Escrow Fund
Democratic state legislators in Maryland have sponsored legislation (SB 1011/HB 1167) that would use Maryland’s health insurance exchange to automatically enroll individuals in health insurance plans. The proposal is based on a concept developed by Stan Dorn, a senior fellow at Families USA, under which Maryland would institute an individual mandate and imposepenalties for lack of coverage. Under this model, consumers could use the penalties they owe to purchase future coverage. As described by Dorn, the intent of this proposal is to ensure that penalties are used to help individuals purchase coverage to the maximum extent possible. During NASHP’s webinar, Dorn outlined four phases of this plan:

Open enrollment “pre-payment:” During the open enrollment season, consumers would come into the exchange and estimate the amount of penalty they would owe during their next tax filing for not purchasing coverage. The consumer can then opt to “pre-pay” this penalty to the exchange, and apply that payment toward the purchase of insurance coverage.
Tax season: Upon filing tax returns, consumers would be asked to self-identify whether or not they were insured on their tax form. If they were uninsured and owed a penalty, consumers could choose to have the penalty used to purchase insurance. At this point, the exchange would check to see if the consumer was eligible for coverage at zero-cost, meaning that when tax credits and the penalty are applied, the consumer would owe zero in monthly premiums for the plan. If a zero-cost plan is available, the consumer would be automatically enrolled in that plan.
Post-tax season: If consumers do not qualify for a zero-cost plan, their penalty would be held in escrow until the next open enrollment period. At that point, consumers can apply the penalty toward the purchase of coverage for the following year.
Continuation of coverage: If consumers decide to drop coverage before the full year, the state keeps any amount of the penalty left after payments are made to insurers for whatever months the consumer was covered. Any penalty funds collected would be used to finance operation of this program, and to help fund a reinsurance program to help defray the cost of insuring high-cost consumers.

The Maryland proposal raises questions about consumer behaviors, underscoring that successful implementation requires the development of sufficient tools and resources to ensure that consumers can adequately make decisions about whether to use of their penalty toward the purchase of coverage. The legislation proposes an ambitious timeline for implementation, mandating that it become fully operational by Jan. 1, 2020. The Maryland exchange have not officially taken a position on the model, though legislators are consulting with them to assess the feasibility of the plan.

Overview: How the President’s Proposed FFY 2019 Budget Impacts Critical State Health Programs

February 13, 2018/in Policy Blogs Behavioral/Mental Health and SUD, CHIP, CHIP, Chronic and Complex Populations, Chronic Disease Prevention and Management, Cost, Payment, and Delivery Reform, Health Coverage and Access, Health Equity, Health System Costs, Infant Mortality, Maternal Health and Mortality, Maternal, Child, and Adolescent Health, Medicaid Managed Care, Medicaid Managed Care, Population Health, Social Determinants of Health, State Insurance Marketplaces /by NASHP Staff

On Monday, the Office of Management and Budget released the president’s FFY 2019 budget request that proposes $68.4 billion for health programs administered by the U.S. Department of Health and Human Services (HHS) – which is $17.9 billion less than 2017 funding levels. The budget proposal included an addendum designed to align the proposed White House budget with the recently passed Bipartisan Budget Act.
The following highlights some of the key components of the president’s budget proposal that could impact state health programs.
Affordable Care Act (ACA) and Insurance Markets
The proposed budget recommends the following changes to the ACA and insurance markets:

Replace the ACA with the Market-Based Health Care Grant Program: This would be a block grant structure that state could use to implement their own insurance reforms, which was originally proposed by Sens. Graham, Cassidy, Heller, and Johnson. Under the Graham-Cassidy-Heller-Johnson bill, $1.176 trillion would be appropriated from FFY 2020 to FFY 2026 for states to explore experimenting with a variety of insurance reforms or affordability programs. The bill would allow greater flexibility over enrollment in copper (catastrophic health) plans in 2019 and provide greater flexibility over health savings accounts. (For more details see, NASHP’s summary).
Phase out the federally-facilitated marketplace (FFM): Related to its proposed ACA repeal, the budget includes funding for “critical functions” and “wind down” of the FFM.
Increase funding to support Association Health Plans (AHPs): Funding would be directed to the Employee Benefits Security Administration to develop policy and enforcement capacity to expand access to AHPs, which would not have the consumer protections that ACA plans currently have and may be exempt from state regulation. This reflects recently-proposed regulations designed to increase flexibility over the formation of AHPs.
Fund the cost-sharing reduction (CSR) program: Funding would be available to cover CSR expenses from October 2017 through December 2019. The Administration discontinued payments to the CSR program in October 2017.
Reduce the grace period for payment of health insurance marketplace premiums: This suggests that the 90-day grace period consumers are given to enact marketplace coverage be reduced to 30 days.
Allow for state certification of qualified health plans (QHPs): The change is consistent with recent actions taken by the Administration to defer oversight and certification of QHPs sold through Healthcare.gov to states.
Include mandatory funding for the Risk Corridor program: Funding would reconcile outstanding balances owed to insurers under the temporary Risk Corridor program established under the ACA.

Medicaid
The president’s FFY 2019 budget proposes:

Overall program funding cuts: Proposes to cut federal Medicaid funding by $250 billion over 10 years.
Repeal of ACA’s Medicaid expansion and targets Medicaid funding: Advocates repealing the ACA’s Medicaid expansion and supports state efforts to prioritize Medicaid dollars for the “most vulnerable” individuals.
Medicaid financing changes: Indicates support for proposals to change the structure of Medicaid financing, similar to what the Graham-Cassidy bill proposed, such as implementing per capita cap or block grant funding models, which would be trended over time by the Consumer Price Index.
Work and community engagement initiatives: Encourages state initiatives to implement community engagement initiatives for able-bodied adults enrolled in Medicaid.
Prohibit Medicaid payments to public providers: Proposes to limit Medicaid reimbursement for health care providers operated by a unit of government to no more than the cost of providing services to Medicaid beneficiaries.
Giving states the ability to change certain program elements and eligibility determination processes: Plans to provide states with additional flexibility over Medicaid benefits and cost sharing, including allowing states to use state plan authority to increase copayments for non-emergency use of emergency departments. Proposes to also allow states to make changes to Medicaid eligibility determination, such as counting savings, lottery winnings, and other assets.
Mandated coverage of medication-assisted treatment: Requires state Medicaid programs to cover approved medication-assisted treatments for opioid use disorder. These investments are expected to reduce Medicaid expenditures over time.
Resources for program integrity and data collection: Includes measures designed to address waste, fraud, and abuse, as well as forthcoming guidance from the Centers for Medicare & Medicaid Services (CMS) about improving data collection of Medicaid supplemental payments.
Medicaid Disproportionate Share Hospital (DSH) payments: Continues DSH reductions by $8 billion per year from FFY 2026 to FFY 2028 (the Bipartisan Budget Act delayed DSH cuts until FFY 2020, and then increased scheduled payment reductions for FFY 2021 to FFY 2025 to $8 billion for each fiscal year).

Children’s Health Insurance Program (CHIP)
Although the recent Bipartisan Budget Act along with the earlier Jan. 22, 2018, continuing resolution (CR) extended CHIP funding until FFY 2027, the president’s budget includes some suggestions for policy changes to CHIP.

Eliminates the 23-percentage point federal match rate increase earlier: Known as the 23 percent bump, the budget proposes to eliminate this entirely in FFY 2019. (This does not include the provisions that were in the Jan. 22, 2018, CR to continue the 23 percent bump in FFY 2018 and FFY 2019, phase it down to 11.5 percent in FFY 2020, and then return to the regular enhanced CHIP match rate in FFY 2021 and beyond).
Limits enhanced CHIP match rate: Proposes to cap the increased CHIP federal match rate for states by restricting this enhanced match rate only for children in families with income up to 250 percent of the federal poverty level (FPL).
Eliminates the maintenance of effort (MOE) in FFY 2019: Proposes to end the MOE that requires states to cover children with family incomes up to the same eligibility level that was in place in 2010. In contrast, the Bipartisan Budget Act continued the MOE requirements through FFY 2019 as in current law, and then through FFY 2027 for families with incomes up to 300 percent of FPL.
Transitioning children from Medicaid to CHIP: Allows states to transition children ages 6 through 18 with family income between 100 to 133 percent of FPL (known as the bright line or stair steps kids) from Medicaid to CHIP, thus eliminating the current 133 percent FPL Medicaid eligibility level floor for children.

Prevention and Public Health Issues
The HHS budget request prioritizes the opioid crisis, mental illness, and infectious diseases. This is a shift from the former HHS Secretary’s priorities of addressing opioid/substance abuse, mental illness, and childhood obesity. Some other things of note are:

Funding to address the opioid epidemic: Proposes $10 billion in funding in FFY 2019 to HHS to combat the opioid epidemic and serious mental illnesses.
Prevention and Public Health Fund (PPHF): Proposes to eliminate the PPHF but backfill PPHF-funded programs with discretionary budget authority.
Infectious diseases demonstration: Includes a $40 million request for a new demonstration program for five or more states or localities that focuses on eliminating multiple infectious diseases using screenings and referral to treatment. It would focus particularly on states/localities with infectious disease increases related to opioids.
National Strategic Stockpile: Proposes to move the National Strategic Stockpile program out of the Centers for Disease Control and Prevention and house it in the HHS Office of the Assistant Secretary for Preparedness and Response.

Health and Housing Issues/Other Programs Addressing Social Determinants of Health
Some components of the HHS budget, as well as several aspects of the U.S. Department of Housing and Urban Development (HUD) budget, could affect states’ abilities to address health through housing and other social determinants of health.

Decreases funding for HUD rental assistance programs: Proposes to reduce funding for HUD rental assistance programs by 11.2 percent over 2017. The administration maintains that this would be enough to support the currently-housed families, while shrinking the program over time. The addendum would provide $1.7 billion to maintain current levels of housing vouchers and exempt elderly and disabled households from “rent reform proposals.”
More state and local resources will be necessary to develop affordable housing: Expects states to pick up a greater share of the tab for affordable housing, and does not request funding for the Public Housing Capital Fund, indicating that the responsibility for providing affordable housing should be more fully shared with state and local governments.
Supplemental Nutrition Assistance Program (SNAP): Proposes cutting SNAP by $17 billion in FFY 2019 (and by $98 billion over the next five years), and proposes combining SNAP with a program that provides “100 percent American-grown foods” directly to households.
Social Services Block Grant: The budget proposes to eliminate the Social Services Block Grant with the justification that it funds services that are currently funded by other sources and lacks the ability to track the impact of spending.
Elimination of the Community Development Block Grant (CDBG) and Low-Income Home Energy Assistance Program (LIHEAP): Calls for the elimination of both programs.
Increases rent payment requirements for certain individuals in subsidized housing: Calls for able-bodied people in affordable housing to pay a greater share of their income (more than 30 percent) toward rent, in an effort to encourage them to work more.

Medicaid Prescription Drugs

Medicaid Drug Coverage Demonstration: Establishes a statutory demonstration authority to allow up to five states more flexibility in negotiating prices directly with drug manufacturers, rather than participate in the Medicaid Drug Rebate Program. Participating states will be required to include an appeals process so beneficiaries can access non-covered drugs based on medical need. The demonstration would exempt prices negotiated under the demonstration from best price reporting. (The budget estimates $85 million in savings over 10 years.)
Clarify definitions under Medicaid Drug Rebate program: Clarifies the Medicaid definition of brand and over-the-counter drugs, as well as drugs approved under a biologics license application, by codifying existing regulations to ensure appropriate Medicaid drug rebates. (Estimates $319 million in savings over 10 years.)

Federal Health Safety Net Programs

Health center funding: Provides $5.1 billion of discretionary funding for community health centers.
Consolidates Graduate Medical Education (GME) funding: Proposes to consolidate GME funding into a new mandatory GME capped grant program, no longer allowing categorical funding for certain medical specialties.
Reductions in nursing education funding: Proposes to reduce funding for nursing workforce development by $145 million from FFY 2018.

Proposals Affecting Individuals Dually Eligible for Medicare and Medicaid

Coordinated review of Dual Eligible Special Needs Plan marketing materials: Allows for joint state and CMS review of marketing materials for Dual Eligible Special Needs Plans.
Part D special enrollment period for dually eligible individuals: Clarifies the Special Enrollment Period (SEP) for Medicare Part D to allow CMS to apply the same annual election process for all eligible individuals, but maintain the ability for dually eligible beneficiaries to use an SEP to opt into integrated care programs or to change plans following auto-assignment.

Center for Medicare and Medicaid Innovation (CMMI)

Additional funding for CMMI: Proposes an increase of $314 million in funding for CMMI for FFY 2019.

Other Programs

Temporary Assistance for Needy Families (TANF) funding reductions: Proposes a 10 percent decrease in funding for the TANF program, and require states to use at least 30 percent of federal TANF and state maintenance-of-effort funds on the following: work, education, and training activities and work supports, including child care.
Family to Family (F2F) Information Centers: Funds the F2F Health Information Centers, however not at the same rate as the recently passed CR, which included $6 million per year in FFY 2018 and FFY 2019, and an additional $1 million per year to establish centers in the territories and for Native American tribes. Under the president’s proposal, F2F centers would receive $1 million in FFY 2018 and $4 million each in FFY 2019 and FFY 2020.
Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program: Includes an addendum that would fund the MIECHV program for FFY 2019 at the same level included in the recently passed CR at $400 million per year.
Reforms for families with more than one child enrolled in the Supplemental Security Income (SSI) Disability Program: Creates a sliding scale for multi-recipient SSI families. For families with more than one child receiving SSI disability payments, they would still receive up to the current maximum benefit for the first child, but SSI payments for additional children would operate on a sliding scale that takes into the account the number of additional children.
Paid parental leave and child care funding: Allocates money to establish a paid parental leave program, which would require states to provide parents six weeks of paid leave to new mothers and fathers and give states wide latitude to design and implement their programs. It also enhances funding for child care programs, including increasing the Child Care and Development Block Grant by $169 million over FFY 2018 levels.
Individuals with Disabilities Education Act (IDEA): Proposes maintaining current level of funding ($12.8 billion) for IDEA formula grants to states to support special education and early intervention services.
Women, Infants, and Children (WIC): Proposes maintaining current level of funding ($5.8 billion) for the Special Supplemental Nutrition Program for WIC.

State-Based Marketplaces See Enrollment Growth in 2018, Despite Roadblocks and Confusion

February 13, 2018/in Policy Blogs Eligibility and Enrollment, Health Coverage and Access, State Insurance Marketplaces /by Christina Cousart

While national enrollment in Affordable Care Act (ACA) marketplaces reached 11.8 million for 2018 – about 3.7 percent less than in 2017 — enrollment in states that have more control over their marketplaces grew by 0.2 percent. Meanwhile, enrollment fell by 5.3 percent in states that use the federally-facilitated marketplace, according to data released by the National Academy for State Health Policy (NASHP).
State control, carefully calculated outreach, and responsiveness to changing markets were key factors in enrollment increases in the 16 states and Washington, DC, that control at least some aspects of their insurance marketplaces. Eleven of these states and Washington, DC, operate their own marketplaces, known as state-based marketplaces (SBMs). These states design their enrollment websites, control outreach and marketing, and manage the health plans offered through the marketplace.
Five other state-run markets use the federal platform (SBM-FPs), including the federal website Healthcare.gov for eligibility and enrollment, but manage their own outreach strategies and oversee plan management.

In this first of a three-part blog series, NASHP explores how the SBMs and SBM-FPs used five years of experience to develop marketing strategies to improve systems and boost enrollment in 2018.

State Marketplaces Promoted Affordable Options Amid Market Uncertainty
During the 2018 enrollment season, both state-based and federally-facilitated marketplaces contended with shortened enrollment periods, rising premiums, and consumer confusion over the availability of marketplace coverage spurred by federal debates over the repeal of the ACA. Moreover, the Administration’s decision to discontinue cost-sharing reduction payments (CSR) just one month prior to the beginning of the open enrollment period resulted in delayed premium rate setting, which gave marketplaces limited time to review and adapt their systems and outreach materials based on accurate 2018 pricing. (For more on the impact of CSRs on states and premiums, read: The Administration CSR Subsidy Payments—What Comes Next?)
In response to these changes, many SBMs redoubled their efforts, extended enrollment periods, invested in new marketing strategies and consumer tools to reassure consumers that marketplaces were open for business in 2018 and that affordable options remained available to many consumers.
A common message SBMs relayed repeatedly was the availability of lower-cost plans for residents earning between 100 to 400 percent of the federal poverty level (FPL) who were eligible for advance-premium tax credits (APTCs). Under the income guidelines, the tax credits were available to individuals earning between $12,060 and $48,240 per year, and families of four earning between $24,600 to $98,400 annually. This was especially critical after states took action to shield consumers from premium increases caused by CSR losses.
To protect lower-income enrollees from high out-of-pocket costs, insurers maintained lower deductibles and made up for CSR funding losses by raising premiums. Those increases were added as higher premiums onto silver-level health plans only (CSR benefits are only available through silver-level plans). Consumers who qualify for APTC were protected from these higher premiums as APTCs are calculated based on silver-level premiums, meaning that as silver-level premiums grew, so too did the amount of tax credit individuals could qualify for.
Maryland’s marketplace, for example, reported a nearly 68 percent increase in average APTC received by households in January 2018 over what households received in January 2017. Maryland’s marketplace also reported a 2 percent increase in plan selections made by individuals qualifying for APTC this year, despite an overall 2.7 percent decrease in total plan selections — indicating a drop in selections by individuals in the over 400 percent FPL population. This effect may also have influenced the reported drop in total plan selections in Vermont, which encouraged individuals who did not qualify for APTC to explore purchasing insurance plans through private insurers ( outside the state marketplace) where more affordable options may have been available.
State Marketplace Gains Are Notable as Uninsured Rates Hit Historic Lows
Strong enrollment is notable as many SBM states are reporting historic lows in uninsured rates, including Massachusetts (2.5 percent), Washington, DC, (3.9 percent), and Vermont (3.7 percent). As SBMs expand their coverage reach, many have shifted their focus from attracting new enrollments to retaining consumers who remain eligible for marketplace coverage.
Access Health CT of Connecticut, which saw enrollment growth of 2.3 percent this year, reports a state uninsurance rate of 3.5 percent. Access Health CT reported a 10 percent increase in re-enrollments for 2018. Minnesota and Washington saw a similar trend, reporting a 40 percent and 22 percent growth in renewals, respectively.
Other states continued to see significant growth among new enrollees, indicating effective efforts to break into new communities. This was especially evident in California, which reported 423,484 new enrollees this year, a 3 percent increase over last year.
In upcoming blogs, NASHP will explore the strategic decisions made by SBM and SBM-FPs to enhance marketing and outreach strategies and improve marketplace technology, which are credited with generating gains during this enrollment period. NASHP will also report on emerging strategies as state marketplaces and insurance departments brace for similar market uncertainty in 2019 (see State Health Watch—What’s Ahead in 2018?).

Bracing for an Uncertain 2018, States Can Apply the Flexibility and Innovation Learned in 2017

January 30, 2018/in Policy Blogs Administrative Actions, Cost, Payment, and Delivery Reform, Health System Costs, Medicaid Managed Care, Model Legislation, Newly-Enacted Laws, Prescription Drug Pricing, Quality and Measurement, State Rx Legislative Action, Value-Based Purchasing /by Anita Cardwell

The federal political and funding uncertainties that affected state health insurance coverage in 2017, including the potential repeal of the Affordable Care Act (ACA), are expected to reverberate through 2018. But this year, state health care policymakers have some lessons learned about the value of state flexibility and innovation as they navigate another tumultuous year.
Last October, several sessions at the National Academy for State Health Policy’s (NASHP) Annual State Health Policy Conference focused on states’ efforts to improve or ensure coverage in an uncertain federal political environment. Officials, representing Medicaid agencies, insurance departments, health insurance marketplaces, and executive offices, from nine states* highlighted how their states were responding in the current, challenging policy environment and described their aspirations to improve coverage and health in their states.
Below, NASHP recaps the actions that conference speakers took in 2017 that can also be used in 2018.
States proactively took action to address urgent health care issues spurred by federal uncertainty.
State officials described having to analyze various scenarios involving significant changes to their health coverage and markets as a result of federal actions – or in some cases inaction. Although Congress recently provided long-term federal funding for the Children’s Health Insurance Program (CHIP), states faced several months of uncertainty after funding for the program expired in September 2017.
To mitigate potential coverage losses, Colorado developed detailed contingency plans to inform families and stakeholders early on about possible coverage changes in CHIP. Its Department of Health Care Policy & Financing also worked closely with the state’s health insurance marketplace to craft plans to seamlessly transition CHIP-enrolled children to marketplace coverage if that became necessary.
Uncertainty over the Trump administration’s payment of cost-sharing reductions (CSRs) each month, as well as questions about the future of the ACA, posed significant challenges for state insurance regulators who were concurrently negotiating rates with insurers for the 2018 coverage year. In this confusing environment, both regulators and insurers were required to commit to coverage offerings despite the lack of key information that would influence market composition and costs.
New Mexico invoked an existing state requirement that requires insurers who provide major medical coverage to offer at least one plan statewide to ensure that consumers – including those in rural areas — would have a choice of insurance products in 2018. In Massachusetts, insurance marketplace officials communicated regularly with insurance carriers and the state’s Division of Insurance to examine options, which allowed the state to quickly implement a plan to load CSR-adjusted rates into its silver-level marketplace plans, thus mitigating the effect of CSR losses once the administration finalized its decision to cease CSR payments in October 2017.
States across the country face similar challenges as they analyzed the effect that proposed administrative actions could have on their 2019 markets, including the proposed association health plan regulation, the pending regulation on short-term insurance plans, and the administration’s decisions affecting enforcement of the individual mandate—each of which could significantly impact the stability of state individual insurance markets.
States are adaptive and take action to address the needs of their coverage markets. Knowing their regulatory authority and market characteristics, state leaders often have the best perspective about the needs of their coverage programs. In 2017, several states used their flexibility and authority to design policies or initiate programs that safeguarded their citizens and markets. Alaska has long struggled with issues of cost and providing sufficient access to coverage, intensified by the state’s geographic composition and lack of access to providers. Faced with escalating premiums and the danger of issuer exits, Alaska took the lead as the first state to use 1332 waiver authority to create a reinsurance program. The program was structured as a two-year plan, giving the state time to develop a more sustainable solution to meet its market challenges. By taking this action, Alaska maintained the number of issuers participating in its individual market and reduced proposed premium increases. Several states, including Oregon, Washington, and Wisconsin, are exploring implementing similar reinsurance programs using 1332 waiver authority in 2018.
The resources states used to respond to federal uncertainty distracted them from achieving other health policy improvements. While federal action can be necessary to address significant health care system issues, state officials point out that large-scale federal reforms also distract states and prevent them from tackling other priorities or addressing needs of greater importance to their states. Several officials noted that the time and effort needed to develop new policies and educate legislators, constituents, and other stakeholders about the potential implications of federal changes required a significant expenditure of resources during 2017. This included dedicating considerable resources to conduct analyses of “the dramatic change” that could have resulted from any of the proposed federal actions debated in 2017, including repeal of the ACA, state officials explained. Instead, officials noted they could not focus on issues like addressing the underlying drivers of health care costs, exploration of value-based purchasing models, state-based strategies to increase insurer competition and choice while maintaining quality, and initiatives to reduce pharmacy costs.
States work to build or improve bridges across a coverage continuum. State officials at the conference addressed the effect that increases in coverage—spurred by Medicaid expansion and the availability of subsidized plans through the health insurance marketplaces—have had on their populations and coverage programs. Specifically, they noted that the changes have increasingly moved their programs toward creation of a nearly seamless system of coverage options. As a result, some officials are more actively engaged in how to align, coordinate, and better leverage their programs to improve efficiency, reduce consumer confusion, and increase the number of individuals who can access coverage.
While Idaho did not expand Medicaid, the state is now seeking federal approval for a proposal that would allow individuals with incomes below 100 percent of the federal poverty level (FPL) to purchase subsidized coverage on the marketplace, while also allowing individuals up to 400 percent FPL with complex health needs to qualify for Medicaid (for more details see, Searching for New Insurance Options, States Consider Medicaid Buy-In and Other Strategies).
Medicaid and insurance marketplace agencies in Washington, DC work closely to coordinate policy and manage cases of individuals transitioning between Medicaid and the marketplace. Washington, DC now has one of the lowest uninsured rates in the nation, and officials noted the importance of interagency coordination to resolve technical issues between programs and capture individuals who may otherwise lose coverage while navigating between programs. One official said, “the closer [our agencies] work on [policies], the more effective we can be.”
As state health officials plan for 2018, they will need to continue to be nimble to balance short-term, pressing issues while focusing on long-term, forward-focused plans that promote affordable and accessible coverage.
*States represented at the sessions included Alaska, Colorado, Washington, DC, Idaho, Massachusetts, New Mexico, Virginia, Washington, and West Virginia.

Congress Poised to Act on Insurance Reforms, with Major Repercussions for All States

December 19, 2017/in Policy Blogs Eligibility and Enrollment, Essential Health Benefits, Health Coverage and Access, State Insurance Marketplaces /by Christina Cousart

As Congress barrels toward the end of the year, several bills are in play that will have major and almost immediate ramifications for health insurance markets. They include:

Tax Cuts and Jobs Act (H.R. 1)
The Alexander-Murray insurance market stabilization bill
The Nelson-Collins reinsurance program bill
Temporary elimination of the health insurance tax (H.R. 4620)

The future and content of these bills remain unclear amid competing political priorities and Washington’s attempt to pass both its tax overhaul package and a continuing resolution to maintain government operations by the end of the year. However, if passed, these bills will require states to take rapid action to implement their changes, including the establishment of new programs and setting guidance in advance of 2019 insurance rate filing deadlines (typically in the spring).
Below, the National Academy for State Health Policy (NASHP) reviews the changes that may unfold if the proposed bills are passed by the end of the year.
Repeal of the Individual Mandate
As of coverage year 2019, the Tax Cuts and Jobs Act will effectively repeal the individual mandate by reducing to zero the penalty incurred by individuals who do not enroll in a qualifying health insurance plan. The Congressional Budget Office (CBO) has estimated that repeal of the individual mandate would lead to 4 million fewer insured individuals in 2019 with 13 million fewer by 2027.
Effect on individual and Medicaid markets
The anticipated coverage losses will impact states in two significant ways; while the majority of losses will come from the individual market, states can also anticipate a drop in the number of Medicaid enrollees, primarily caused by a reversal of the mandate’s “woodwork effect” that brought eligible, but not enrolled, individuals into the program. Having fewer insured individuals will affect the ability of insurers to attract a healthy risk mix and, in turn, maintain stable markets. In some cases, this is likely to cause insurers to exit markets or, at minimum, to raise rates to compensate for losses. CBO estimates individual market premiums will increase by about 10 percent. While premium tax credits will shield qualifying consumers from some of these increases (including individuals earning between 100 to 400 percent of the federal poverty level), middle-income families are likely to be most adversely affected and will lack any other source of financial relief from escalating premiums.
In anticipation of these changes, some states are considering adopting their own individual mandates. The District of Columbia Health Benefit Exchange Authority Executive Board adopted a resolution to implement an individual responsibility requirement (mandate) beginning in 2019. Massachusetts would maintain the individual mandate it enacted in 2006.
Funding for the Cost-Sharing Reduction (CSR) Program
Several Republican leaders have expressed willingness to fund the CSR program as a means to address concerns of their colleagues — most notably Sen. Susan Collins (R-ME), a critical swing vote for the tax bill — who are concerned about the instability that may be triggered in some insurance markets due to repeal of the individual mandate. Congress is most likely to adopt the CSR payment model proposed under the Alexander-Murray insurance market stabilization bill which appropriates CSR payments for 2017 , 2018, and 2019. CBO estimates the CSR program would represent $10 billion in payments to issuers in 2018. However, this may be an overestimation given the measures that states and issuers have already taken to accommodate the cessation of the payments, which raises questions about the potential positive effects in 2018 if CSRs are funded.
States must take CSR action within 60 days
After the Administration announced it would stop issuing CSR payments, states and insurers took swift action to develop strategies to protect their markets and consumers from potential disruptions and premium increases. In all states except North Dakota, this resulted in the raising of premium rates to account for loss of CSR.
Alexander-Murray requires states to develop a strategy for how they would account for CSR availability in 2018 by either:
1) Allowing insurers to reject the payments, or
2) Developing a strategy defining how insurers would reimburse consumers and the federal government for excess funds received if insurers received CSR payments after they raised premiums in anticipation of losing CSR.
Under Alexander-Murray, states must develop and submit their strategies to the US Department of Health and Human Services (HHS) no later than 60 days upon enactment of the bill.
Funding for a Two-Year Reinsurance Program
In addition to CSR funding, funding for state reinsurance programs has been universally endorsed as a critical tool to stabilize insurance markets by state leaders, industry experts, and insurance analysts. These programs have track records of protecting insurers from losses when they incur higher-than-expected risk without passing those costs directly back to consumers.
A bill, proposed by Sens. Collins and Nelson would provide $4.5 billion in funding for states to establish an invisible high-risk pool or reinsurance program, although recent reports from Collins have indicated this figure would be increased to $10 billion ($5 billion per year in 2018 and 2019) before final passage.
Establishing a state-based reinsurance program
The Collins-Nelson bill provides few parameters, and therefore gives states greater flexibility to design and implement their insurance programs, if they choose to do so at all. Interested states would need to quickly conduct analyses, pass enabling legislation, if needed, and set up any infrastructure necessary to administer the program especially if they hope to take advantage of funding available in 2018. The bill gives HHS up to 90 days to review state applications, which will affect how quickly states are able to implement the programs. Also unclear is how funds would be distributed to states, calling into question how much money would be available per state.
Flexibility of Section 1332 Waivers
Also included in the Alexander Murray bill are several changes to the Affordable Care Act’s (ACA) Section 1332 waiver program that would be implemented if the bill is passed in its entirety. These include:

Establishment of a “comparable affordability” standard for coverage;
Enabling expedited processes for waiver approval;
Extending waiver authority for six years;
Enabling states to apply for waivers without state legislation;
Redefining budget neutrality requirements to apply over the term of the waiver; and
Allowing for consideration of direct budgetary impacts of the waiver on other federal programs (e.g., Medicaid).

These changes may open new flexibility to states interested in pursuing a 1332 waiver. For example, longer waiver terms and changes to budget calculations could enable states to develop waivers that focus on longer-term goals across their coverage programs, rather than budgeting on a year-by-year basis. Administrative changes, such as the removal of a state legislative requirement and development of an expedited approval process, may give states greater ability to develop “last-minute” waivers that respond to an emerging market need (e.g., an unexpected spike in insurance rates or bare counties). Changing the current “at least as affordable as” standard to a somewhat more accommodating “comparable affordability” standard could allow for greater latitude over how cost-sharing and benefit design could be modified from what is currently defined in the ACA.
Temporary Health Insurance Tax Repeal
H.R. 4620 provides a temporary delay of the health insurance tax, a fixed tax charged across all health insurers proportional to their market share. The tax was designed as a trade-off to generate greater government revenue from insurers, assuming insurers would see greater profits from coverage expansions spurred under the ACA. While issuers have increasingly reported higher profit margins since implementation of the ACA, some initial profit shortfalls and ongoing market instability have called into question the productivity of the tax, with some in the industry suggesting that the cost of the tax has been passed on to consumers in the form of higher premiums. An Oliver Wyman analysis estimated the tax would increase premiums in 2018 by 2.6 percent, on average, and between 2.5 to 2.7 percent in subsequent years.
Role for state oversight and rate review
H.R. 4620 would suspend the tax in 2019 and could allow for insurers to receive rebates for costs incurred by the tax in 2018. Because premiums have already been established for the 2018 coverage year, the bill introduces a mechanism for “relief” by which insurers who receive tax credit reimbursements must provide rebates to enrollees, no later than April 30, 2019, to account for any excess in premiums charged because of the tax. The bill allows insurers to structure their own rebate program, which would be validated by the Secretary of the Treasury. State insurance departments may wish to monitor closely the decisions made by their issuers and subsequent effect on premiums, as they enter negotiation of rates for 2019. Moreover, the bill is vague as to oversight of the rebate program, and states may consider establishing their own mechanisms to monitor consumer rebates and ensure protections in light of the program.