Federal Insurance Rule Change Proposes an Insurer/Broker Alternative to State Exchanges
Last month, the US Department of Health and Human Services (HHS) released its proposed 2022 Notice of Benefit and Payment Parameters, the annual rule that governs health insurance and the exchanges. Its most significant proposal is creation of a new option that allows a state to exclusively use direct enrollment by health insurers and brokers to enroll individuals in qualified health plans that meet all of the Affordable Care Act’s (ACA) coverage requirements, such pre-existing condition protections and essential health benefits.
By electing this option, a state would effectively eliminate use of a centralized health insurance exchange, which historically was designed to be a one-stop shop where consumers could compare all available qualified health plan (QHP) options to a private system marketing various coverage products. The exchanges also currently allow consumers to see if they qualified for Medicaid, which would be eliminated under this option.
If the federal proposal is approved, the option would be available to all states regardless of whether a state uses the federally facilitated exchange (FFE), operates its own state-based exchange (SBEs), or uses a hybrid model (SBE-FPs).
What is enhanced direct enrollment (EDE)?
The concept of direct enrollment (DE) is not new. Since the exchanges first became operational in 2014, there has always been an option allowing insurers and web-brokers to enroll eligible individuals into coverage. DE was designed to supplement the capacities of the exchanges by giving insurers and brokers a way to still reach out to individuals eligible for coverage and the federal advance premium tax credits (APTCs) and cost-sharing reductions (CSRs). In its early stages, DE was conducted by routing applicants from insurer or broker websites to the exchange, where the individual would complete an application to determine eligibility for coverage and subsidies. Once the application was complete, the individual would be routed back to the insurer or broker to complete enrollment.
In 2018, HHS established a new process for states using the FFE called enhanced direct enrollment (EDE), which allows individual seeking coverage to enroll directly with insurers or web-brokers without ever interacting with an exchange. The insurer or web-broker’s system interacts with an exchange behind the scenes, transferring the information necessary to determine an individual’s eligibility for coverage without that individual ever having to leave the insurer or web-broker website.
Since establishing the EDE option, participation by insurers and web-brokers has grown significantly. As of November 2020, 32 insurers and eight web-brokers were certified to conduct enhanced direct enrollment. In addition, three companies had been approved to serve as a DE technology vendor, providing insurers or brokers with the technology necessary to do enhanced direct enrollment. According to HHS, one-third of all FFE enrollments are conducted through a DE or EDE entity.
Development of the New EDE-Exchange Option
The proposed rule establishes a process so that a state can opt to have all enrollments go through EDE entities certified in the state, eliminating the option for residents to enroll via a health insurance exchange. The exchange (whether the state uses an FFE or SBE) would still exist in states that adopt this model, but would be limited to providing the back-end functionality necessary to determine a consumer’s eligibility for coverage, as well as maintenance of a general website with basic comparative information about the QHPs that may be available to a consumer.
This new option (referred to as FFE-DE or SBE-DE, depending if it is implemented by a state using the FFE or an SBE) would effectively eliminate the existence of a central, “one-stop shop” where applicants are presented with all available QHPs that they can compare, shop for, and enroll in. There is no requirement in the proposed rule that EDEs provide complete information about all the QHPs available to an applicant, though the proposed rule does include an inquiry from HHS about adding a requirement that web-brokers include information somewhere about the QHPs an individual cannot enroll in via its website. Further, EDEs may include information about alternative coverage products, such as short-term, limited-duration health insurance plans (short-term plans). A comparison between the model and traditional exchange are detailed in the table below.
The option to eliminate use of an exchange and adopt a model similar to the proposed rule’s FFE-DE was first proposed by Georgia and was recently approved. The Georgia Plan, called the Health Access Model, will move all “front-end functions” of an exchange (consumer outreach, customer services, and plan shopping, selection, and enrollment) to private entities, including insurers and web-brokers. These entities will interact with a state system that coordinates with HHS to determine applicants’ eligibility for federal subsidies. The federal government will then transfer subsidy payments directly to insurers with qualified enrolled individuals, as it does now.
In its application, Georgia officials state that a privatized system will provide its residents with “better access [and] improved customer service,” suggesting that competition and market incentives will drive private web-brokers to offer improved plan selection and enrollment assistance and local, customized customer service to attract the uninsured. The market incentives are primarily described as the commissions that web-brokers are paid for enrolling individuals into coverage. The state will also develop a website, which will contain information about all the health coverage options available in the state, and direct consumers as to where they can enroll in coverage including state-approved carriers and web-brokers. Georgia’s waiver was approved in November 2020.
Similar to the Georgia plan, the Centers for Medicare & Medicaid Services (CMS) states that use of EDEs through its proposed new model could enable the existence of “more curated, customized consumer experience designed to target diverse populations who need coverage.” The proposed rule also notes the ability of EDE entities to provide consumers with a “broader array” of options including ancillary products (e.g., vision, accident coverage), and alternative coverage products not sold through the exchanges, such as short-term plans. The proposed rule indicates these features may be especially important for consumers who do not qualify for federal subsidies, including individuals who are offered individual coverage health reimbursement accounts (HRAs) by their employers. (For more on individual coverage HRAs, read the NASHP blog, New Federal Health Reimbursement Proposal Adds New Variables to State Health Insurance Markets).
The proposal also would lower the user fee charged to issuers in states that opt to run the FFE-DE to 1.5 percent (the FFE fee is proposed to be 2.25 percent in 2022). The assumption is that savings from the lower user fee would be used by insurers to lower premiums or support enhancements to EDE platforms, though it is not a stated requirement in the HHS proposal. The proposed rule also suggests that states and the federal government could save money by no longer operating the full FFE or SBE models. It is assumed that instead, insurers and web-brokers would directly bear these operational costs, and may be able to do so at lower cost assuming their already enhanced technological capabilities.
The rule also indicates the potential for greater efficiency if consumers are allowed to enroll through various EDE entities available in a state rather than the “choke points” that may occur when a consumer only has access to one enrollment vehicle. However, because eligibility would still be conducted by exchanges, albeit on the backend, it is unclear how much efficiency could actually be attained through this method. It should also be noted that nothing currently prohibits an FFE state from having operational EDEs, and states could continue to function with EDEs and the exchange working in tandem.
As detailed in the table below, EDEs are required to meet many of the basic requirements similar to an exchange, including provisions to display accurate and complete information about the QHPs sold through their websites. However, none are required to clearly display all QHP options available to a consumer, and may only display some QHP options or even purposefully direct consumers away from QHP options. This is the case even if the consumer may be eligible for a state’s Medicaid program or federal subsidies that would help them to purchase an ACA-compliant QHP. In a report issued by the Center for Budget and Policy Priorities, several DEs were found to use tools that directed consumers away from QHPs and towards short-term plans. Such alternative forms of coverage do not meet all the coverage requirements enacted under the ACA, including guaranteed protections for individuals with pre-existing conditions, limits on cost-sharing, and provisions of essential health benefits (EHB). But, brokers, on average, are paid higher commissions for enrollment in short-term coverage than QHPs, which may influence DE practices.
If finalized as proposed, states looking to explore the new FFE-DE or SBE-DE option may decide to enact legislation or regulation to more strictly regulate EDEs, including prohibitions on practices that may divert individuals into coverage that may not best suit their financial, health, or family needs. States may also wish to consider policies to assure that EDEs do not negatively alter their risk pools by, for instance, diverting healthier individuals into alternatives that do not participate in insurer risk pools such as short-term plans.
The chart below provides additional details about the differences between the DE models and the health insurance exchanges. Comments on the rule are due by Dec. 30, 2020 and can be submitted here.
| Health Insurance Exchange (Traditional) | Direct Enrollment (DE) | Enhanced Direct Enrollment (EDE) | |
| Definition | Enrollment platform through which individuals may shop, apply for, and enroll in qualified health plans (QHPs). | Process that allows individuals to enroll in a QHP directly through a DE entity (insurers or web-brokers), though eligibility applications are still completed and processed by an exchange. | A process that allows individuals to enroll in a QHP directly through a DE entity (insurers or web-brokers) without directly interacting with an exchange. |
| Operated by: | States (SBEs), federal government (FFE), or both (SBE-FPs) | DE entities (either a CMS-approved QHP issuer website or CMS-approved web-broker website) | DE entities – either a CMS-approved QHP issuer website or CMS-certified web-broker website. |
| Accountability and auditing | FFE and SBEs must comply with regular federal audits. In addition, many states conduct separate audits of their SBEs to ensure accountability. | DE entities must complete CMS certification before selling exchange products. | EDE entities must complete CMS certification before selling exchange products. Certification includes enhanced process for certifying compliance with privacy and security standards for transfer of enrollee data, as well as compliance with annual audits. |
| Eligibility and Enrollment Process | |||
| For private insurance coverage | An individual shops for and applies for coverage through the exchange. The exchange determines eligibility for QHPs, APTCs, and CSRs. If eligible, the individual may select and enroll in a QHP. | The individual shops for coverage through the DE partner. Upon applying, the individual is transferred to the exchange, where they complete their application to determine eligibility for QHPs, APTCs, or CSRs. Once completed, the individual is redirected back to the DE entity to select and enroll in a health plan. | Individual shops for and applies for coverage through the DE entity. If eligible, the individual may select and enroll in a QHP though the DE website. The DE entity’s system interacts “behind the scenes” with an exchange. The latter conducts the determination of eligibility for APTCs, CSRs, or QHPs. |
| For Medicaid coverage | An exchange determines applicant’s eligibility for Medicaid; provides “no wrong door” portal for eligible individuals to enroll in Medicaid. States using the FFE may opt to have the exchange only assess an applicant’s eligibility for Medicaid, after which the applicant is directed to the state Medicaid agency to enroll. | When the individual is transferred to the FFE, the FFE will assess or determine the applicant’s eligibility for Medicaid. If eligible, the FFE will send a notification to the applicant, the DE partner, and the state Medicaid office. Individual is not automatically enrolled in Medicaid coverage and may be directed to alternative coverage options. | The exchange will assess or determine the applicant’s eligibility for Medicaid as it processes the applicant’s information sent via the DE partner. If eligible, the FFE will send a notification to the applicant, the DE partner, and the state Medicaid office. Individual is not automatically enrolled in Medicaid coverage and may be directed to alternative coverage options. |
| Plans that can be displayed or sold through this platform: | |||
| All available QHP options | Yes | No | No, the proposed rule suggests a new requirement that web-brokers would have to identify to consumers QHPs not sold through it platform. |
| Display non-QHP options (including short-term plans) | No | Yes, non-QHP products must be displayed on a separate section of the website than QHPs. | Yes, non-QHP products must be displayed on a separate section of the website than QHPs.
Proposed rule suggests a new requirement that EDE entities build three distinct sections of their websites, one for the sale of on-exchange QHPs, one for the sale of insurance products sold off-exchange (which may also include QHPs), and one for excepted benefits products (e.g., vision, long-term care). |
| Display of ancillary products (e.g., vision, accident insurance) | No | Yes | Yes |
| Required health plan details that must be displayed | |||
| Estimated premiums (total and net, including APTCs/CSRs) | Yes | Yes (for QHPs) | Yes (for QHPs) |
| Summary of benefits | Yes | Yes (for QHPs) | Yes (for QHPs) |
| Provider directory | Yes | Yes (for QHPs) | Yes (for QHPs) |
| Health plan metal level | Yes | Yes (for QHPs) | Yes (for QHPs) |
| Quality ratings | Yes | Yes (for QHPs) | Yes (for QHPs) |
| Enrollee satisfaction surveys | Yes | Yes (for QHPs) | Yes (for QHPs) |
| Shop and compare tools (sorting by premium, deductible, etc.) | Yes | Yes (for QHPs) | Yes (for QHPs) |
| Marketing and outreach requirements | |||
| Marketing requirements | Exchanges (FFE or SBE) are required to conduct marketing and outreach to consumers. | Exchanges conduct marketing and outreach. The DE entity may supplement as it chooses. | EDE entities are expected to conduct marketing and outreach. There are no direct requirements governing EDE marketing other than a prohibition that brokers
“refrain from marketing or conduct that is misleading, coercive, or discriminatory.” |
State-based Marketplace Strategies for Insurance Market Stabilization and Improvement Submitted to the Biden Transition Team
The National Academy for State Health Policy (NASHP), in consultation with state-based health insurance marketplaces leaders, has submitted a list of priority strategies to President-elect Biden’s transition team to improve marketplace operations.
These “action items” are designed to lower costs, stabilize individual and small group health insurance markets, improve access to coverage, and enhance the consumer’s experience when purchasing small group or individual market coverage.
NASHP is home to the State Health Exchange Leadership Network, a consortium of state leaders and staff dedicated to operation of the SBMs. These recommendations draw upon the experience of SBM leaders who have spent the past decade building and operating successful platforms for the procurement of health insurance coverage.
NASHP Outlines Priorities for the Biden Transition Team to Improve Health Insurance Markets
President-elect Biden has pledged to build on the Affordable Care Act (ACA) to provide more insurance choices, reduce costs, and make the health care system less complex and more accessible.
Since launching in 2013, more than a dozen state-based health insurance marketplaces (SBMs) have had the flexibility to develop efficient and cost-effective strategies to serve more than 4 million Americans.
Drawing on its years of experience working with SBMs, the National Academy for State Health Policy (NASHP) has developed a list of priority actions that the incoming Biden Administration could take to address its goals of providing high-value, affordable, and accessible coverage to Americans.
SBMs have become tested sources of innovation, leveraging a variety of strategies to more efficiently and effectively deliver coverage options to consumers through:
- Strategic and targeted marketing and outreach campaigns, and
- Development of tools, resources, and policies tailored to the needs of local consumers and insurance markets.
NASHP is sharing the SBMs’ lessons learned with the Biden transition team in an action item report. They are summarized below.
Immediate Actions to Address the COVID-19 Crisis
As COVID-19 surges across the country, Americans continue to reel from the impact of the pandemic, including income fluctuations, unemployment, and loss of once-secure benefits, including employer-sponsored insurance (ESI). At a time of continued financial uncertainty and when many individuals must navigate unfamiliar coverage options and eligibility processes, it is unreasonable to also impose roadblocks or penalties that hinder consumer’s ability to obtain or maintain needed coverage.
Flexibility from the Internal Revenue Services (IRS) to ensure that consumers are not unduly penalized during tax season because of inaccurate income reporting estimates could provide needed relief to families already experiencing financial hardship (read the NASHP blog, State-Based Marketplace Leaders Ask for Federal Reinforcement of Insurance Markets during COVID-19). Broadening special enrollment periods (SEP) to make it easier for individuals to enroll in coverage in the event of job or income loss could also ease the burden on individuals and families who lose ESI and need coverage. As evidenced by the hundreds of thousands of individuals who enrolled during SEPs in 2020, consumers are seeking open access to coverage and will need flexible enrollment channels as circumstances continue to fluctuate.
Simplifying and streamlining enrollment for qualified individuals:
While insurance subsidies, including advanced premium tax credits (APTC), are available to most individuals who earn between 100 to 400 percent of the federal poverty level (FPL), many are not able or are reluctant to access these benefits because of barriers that hinder access due to confusing eligibility and enrollment rules, often perpetuated by complex federal policies. These policies feature discrepancies between how eligibility is determined for various federal programs, including APTCs and Medicaid, as well as policies that deter qualified legal immigrants from enrolling in programs, such as the public charge rule. Additionally, complications in assessing the affordability of employer coverage — either for families that fall into the family glitch or those that are interested in exploring the use of health reimbursement arrangements (HRAs) — limit the ability of both employers and families to fully explore coverage options that can or should be available to them. Simplifying or rescinding policies that add to enrollment complexities will ensure that more individuals accurately receive the benefits that they qualify for.
Initiatives to prevent market segmentation:
Health insurance markets function most efficiently when they have a robust pool of enrollees across which to balance costs and risk. To generate this mix, the ACA consolidated the market, requiring all individual market plans to be sold in one risk pool (similarly, small group coverage must also operate using a single risk pool). However, recent actions taken by the Trump Administration have enabled the proliferation of alternative forms of coverage, including short-term, limited-duration, and association health plans, and health care sharing ministries. These alternatives are usually not required to meet the same rules as traditional insurance, including guaranteed coverage of certain benefits or protections for those with pre-existing conditions, nor are they required to participate in the single insurance risk pool. Yet, they do compete with insurance products, drawing individuals (often young and healthy) out of the insurance risk pool.
This latter competition may be exacerbated by the growth of direct enrollment entities – third-party enrollment entities that may opt to direct consumers to coverage alternatives. Issues may also arise from the federal government’s recent reinterpretation of the “guardrails” governing Section 1332 state innovation waivers, which opened the opportunities for waivers that allow for coverage alternatives.
Limiting the avenues by which these unregulated products can cut into or harm insurance markets will support the development of healthier, balanced markets and thereby lower costs to consumers.
Restoring and enhancing equal access to coverage and services:
Policies set in place under the ACA sought to ensure equal access to coverage and health services regardless of health status or other traits commonly used to discriminate against consumers, including race, sex, age, or national origin. Recent federal actions rolled back some of those protections, including actions that rescinded protections against discrimination based on gender identity and sexual orientation, as well as steps to improve language accessibility. Other actions reduced protections for consumers by providing an avenue for insurers to deny new enrollments in the case of enrollees who owe outstanding premium payments.
Individuals are given only limited windows in which to enroll in coverage, and barriers that prohibit them from enrolling during that time restrict their access to critical coverage. This is especially troublesome at a time when financial hardships from COVID-19 may have caused delays in timely premium payments. To enable access to coverage and better protections for consumers, it is important to reinstate or enhance consumer protections that improve access and safeguard against discriminatory practices.
Preserving market stability:
Above all, markets require consistency, otherwise insurers act to compensate for both real and perceived changes to their markets, especially ones that are expected to reduce enrollment or drive up costs. A drastic example of this was seen in 2017 when the federal government ceased payments to issuers to support to the cost-sharing reduction (CSR) program, followed closely by Congressional repeal of the individual mandate penalty. Premiums inflated, as insurers sought to offset predicted losses. Several states intervened, instituting policies to mitigate the effect of CSR losses, and in some cases passing their own individual mandates. To maintain market stability and avoid premium spikes, future policies (e.g., changes to the CSR program, premium adjustments, actuarial value calculators, or the poverty threshold) must be designed to minimize market impacts if they are enacted.
While many of these actions relate to reinforcement of federal requirements to ensure access to and stability of insurance markets, states will undoubtedly continue to lead as innovators and regulators of their markets. States will need the maximum flexibility available to them to continue to experiment and make changes to their markets to accommodate the evolving needs of their consumers and insurance markets. This includes continued flexibility over SBM operational functions, like open enrollment windows, as well as broader opportunities to innovate, like flexibility available through Section 1332 state innovation waivers (as conceived prior to the recent reinterpretation of the waiver guardrails). As new federal leadership emerges, NASHP will continue to monitor the actions of states and the federal government as both work to build better, stronger, health care systems.
Implications for States if SCOTUS Overturns or Upends the ACA
The Supreme Court decision in the California vs. Texas case challenging the Affordable Care Act (ACA) could impact all or just a few of its policies and programs with far-reaching consequences for states. This NASHP slide deck describes the ACA’s major provisions, state implementation of the act, and potential implications if the ACA is overturned or revised. Read a related blog, You Can’t Unring a Bell – Implications for States if the Supreme Court Upends the Affordable Care Act, and read/download the slide deck.
You Can’t Unring a Bell – Implications for States if the Supreme Court Upends the Affordable Care Act
For more than a decade, states have been at work implementing the Affordable Care Act (ACA). Today, to varying degrees, its provisions are hardwired into all states. If the ACA fails to survive the objections raised in the US Supreme Court case California vs. Texas, states will face significant challenges and new costs.
Next week’s oral arguments before the nation’s highest court could lead to a decision to end the ACA, depending on how broadly the court rules, and create significant disruptions in states.
The court may reaffirm its 2012 ruling that upheld the constitutionality of the mandate that individuals must have insurance coverage or pay a penalty. It could also conclude that the individual mandate is in fact unconstitutional and strike down some but not all the law, or it could end the law altogether. Of course, the most profound impact such a decision would have is on the more than 20 million Americans now covered through ACA’s coverage expansions. Most states, now confronting severe budget constraints due to COVID-19, would be unable to replace the federal dollars that now support that coverage through Medicaid expansion and tax subsidies.
But there are more implications – some mundane but substantial – at stake here for states should the court significantly alter or eliminate the ACA. This blog and the accompanying slide deck outlines the far-reaching effect of states’ health insurance programs stripped of the ACA.
For starters, the ACA required states to significantly alter how Medicaid eligibility and enrollment is conducted and changed how financial eligibility is determined for many Medicaid enrollees. It required a single application to be used for multiple health coverage programs and streamlined how eligibility is conducted. Federal dollars supported the buildout of new technologies and other administrative apparatus to support the new, consolidated eligibility and enrollment systems and to link Medicaid to health insurance exchanges. This work was transformative and is now well established in all states, but without the ACA:
- Would states be required to again retool all their systems and do it without the federal money that helped build them?
- Would states face federal penalties for noncompliant eligibility determinations as they transitioned Medicaid expansion enrollees off coverage and revamped their systems to once again administer traditional Medicaid programs?
- What about the cost and ensuing confusion as children of state employees, now eligible for the Children’s Health Insurance Program (CHIP) and ACA funding, lose that coverage and revert back to their parents’ health coverage?
If the ACA’s expanded coverage to fill the Medicare Part D’s “donut hole” is eliminated, how will states protect low-income Medicare beneficiaries who are dually eligible for Medicare and Medicaid, and at what cost?
Importantly, the ACA set national standards for insurance regulation, particularly for small group and individual markets. Before the ACA, insurers used crude tools to lower costs and maximize revenue, imposing annual and lifetime limits on claims, refusing to cover pre-existing conditions, using discriminatory rating practices, denying renewals, and rescinding coverage while shifting more and more costs to out-of-pocket expenses for consumers. The ACA prohibited such practices and imposed medical loss ratios on all markets to limit what insurers could charge in overhead and administration.
In providing advanced premium tax credits (APTC) and health insurance exchanges to help consumers find and secure affordable, comprehensive coverage, the ACA stabilized and grew the individual markets in states. The loss of these consumer protections and subsidies will alter the dynamic of these markets and challenge states to maintain coverage. While 40 states have enacted laws to allow children to stay on a parent’s plan until age 26, some make that coverage optional for insurers, not a requirement. As the chart in this slide deck demonstrates, some states have concretized parts of the ACA in their state laws, protecting those with pre-existing conditions, limiting out of pocket exposure, and banning annual and lifetime benefits. But the majority of states have not followed suit and the loss of APTCs that make that coverage affordable will complicate state policymaking decisions.
These few examples of the data included in NASHP’s slide deck make clear that the ACA is deeply embedded in state program operations, policy and law. The elimination of the ACA would indeed create profound loss for the millions of people covered by the program, but the disruption it would cause states’ insurance markets and administrative and IT infrastructure cannot be ignored. As the court hears oral arguments and ultimately makes its decision, states must be prepared for potential upheaval as 11 years of work implementing and refining the ACA could be upended.
How States Address Social Determinants of Oral Health in Dental and Medical Medicaid Managed Care Contracts
Inequities in oral health and health outcomes are driven by upstream factors, including diet, education, transportation, and access to care. A growing number of states are working to improve the oral and physical health of Medicaid enrollees and reduce costs by addressing these social determinants of health in their managed care contracts.
Recently, states have used Medicaid managed care contracts and value-based purchasing agreements to address the education, food, and transportation needs of their enrollees. However, less is known about how states leverage their purchasing clout to improve dental care or address social determinants of health (SDOH) directly in dental contracts.
A 50-state review by the National Academy for State Health Policy (NASHP) of Medicaid dental and medical managed care contracts, requests for proposals, and other similar documents publicly available through September 2020, identified how states address social determinants of oral health. Dental contracts were reviewed for a comprehensive list of social determinants and medical contracts were analyzed for references to care coordination, community resources, food access, social determinants of health screening, and coordination with dental contractors. In total, NASHP scanned dental contracts in 19 states and medical contracts in 38 states.
Of the dental contracts, nine referenced coordination between dental plans and medical plans and 13 referenced coordination with social and community services. Other common references in dental contracts included equity/cultural competence, education, and transportation (each referenced in 10 state contracts).
All but one of the 38 medical contracts referenced coordination with social and community services. Thirty-three states referenced food in their medical contracts, 25 referenced adverse experiences (such as domestic violence and child abuse), and 15 referenced care coordination between dental and medical care. Three states (Florida, Michigan, and Virginia) referred to food in both their dental and medical contracts, while only one (Virginia) referenced adverse experiences in both contracts.
State Medicaid Program Delivery of Dental Care
While Medicaid covers some form of adult dental care in 47 states and Washington, DC, and all states cover dental care for children under 21 as part of the Early Periodic Screening, Diagnosis and Treatment (EPSDT) program, adult dental coverage is optional for state Medicaid programs. Currently, 35 states provide limited dental benefits for adults and 19 states offer extensive adult dental benefits.
States have different options for delivering dental care. Some states with managed care use a carve-in model, where the dental benefit is integrated into medical managed care programs. With a carved-in benefit, managed care organizations (MCOs) may administer the dental benefit or subcontract the dental benefit to another vendor. In carve-out dental programs, states contract with a dental MCO or dental benefits manager (DBM). Alternatively, states with Medicaid managed care medical delivery systems may have fee-for-service dental systems.
Medicaid dental and medical contracts illustrate how states can consider social determinants affecting oral health and overall health through:
- Screening, referral tracking, and follow-up;
- Educational initiatives;
- Staffing and training requirements;
- Data sharing and technology;
- Coordination between dental and medical systems; and
- Performance improvement.
Social Determinants of Health in Dental and Medical Medicaid Contracts
Almost all states scanned have some requirement for plans to refer members to community resources and social services. NASHP focused specifically on requirements that are applicable to the general population, rather than individuals designated as high risk or high needs. States use a variety of strategies to encourage investment in SDOH.
Screening for SDOH Needs
Sixteen states use routine screenings for certain social determinants, including employment status and access to food and transportation. The scan of 14 medical contracts and two dental contracts indicate that states are more likely to require medical plans to conduct needs assessments, often within a specified time frame after enrollment, than dental plans. States may also require medical plans to use this data to appropriately target interventions to meet enrollees’ needs.
While dental plans do not necessarily have the same explicit requirement to conduct a screening, some states do ask their dental plans to use SDOH data to target their educational and outreach activities.
- Michigan’s dental plan is required to use social determinants of oral health data from the state in order to target interventions, outreach, and education efforts.
- Nevada’s dental contract requires the contractor to complete a community-based needs assessment to inform their health promotion and educational activities, including ensuring that any interventions are culturally appropriate and meet the needs of the target population.
Referral Tracking and Follow-up
While screening is an important first step in identifying members’ social needs, it also raises a question of how states use the data to address social determinants. NASHP found that in almost every state with publicly available contracts, Medicaid agencies partner with community-based organizations to meet the social needs of enrollees. For example, plans may facilitate referrals to these community agencies based on information collected through SDOH screenings. States can use tracking, follow-up, and reporting requirements to ensure that referrals to community resources and organizations are effective and successful. Contractors can support these efforts by documenting “closed-looped” referrals that ensure that an enrollee is successfully connected with a community-based organization to address other health and social needs.
- In Louisiana, the Dental Benefit Program Manager is required to connect enrollees with community-based service providers and document referrals and referral outcomes in enrollees’ dental records.
Dental contracts are less likely to require or encourage the plan to monitor referral follow-up. However, dental plans could adopt some of the medical MCOs’ language in order to track the status of referrals, strengthen care coordination between insurance plans and community resources, and ensure individuals are receiving adequate social services that meet their evolving needs. For example, New Hampshire requires MCOs to track the effectiveness of community-based providers and resources, and Oregon requires reporting on referrals to culturally diverse social and support services.
Educational Initiatives
Healthy People 2020 identified health literacy as a component of SDOH, noting that individuals’ ability to access and understand relevant health information affects their health and health outcomes. To help improve health literacy, many states require managed care plans to implement educational initiatives. For dental plans, this includes educating members about the importance of oral health or launching community oral health initiatives designed to help eliminate barriers to dental services and improve population oral health.
- In both Nevada and Texas, the dental contractor must develop and implement programs designed to educate members about nutrition, the importance of oral health, and the relationship between oral health and overall health.
- Florida’s dental plan includes incentives for participation in health education classes. Examples of incentives members can receive that support healthy child development include clothes, food, books, safety devices, publications, and memberships in health and education clubs.
- In its response to Nebraska’s request for proposals (RFP), dental contractor MCNA referenced a program it implemented in Texas that uses the fotonovela (a comic book-style communication popular in the Latinx community) to distribute health information materials to children of migrant farm workers.
Staffing and Training Requirements
Plans may also be responsible for training their employees to better meet members’ needs. In their contracts, states can prioritize the type of training that a plan’s staff receive.
- Nebraska’s dental contract requires all staff to be trained on how social determinants (including food, housing, education, violence, and physical and sexual abuse) affect members’ health and wellness. Staff also receive training on how to find community resources and make referrals.
Both medical and dental plans also employ staff members who are responsible for care coordination, addressing social determinants, and improving access to care for historically marginalized populations.
- Nebraska’s dental contract requires the plan to employ a tribal network liaison to coordinate and expand dental services to Native Americans and connect them to community resources. Arizonaand New Mexico both require medical MCOs to employ someone to coordinate services with Native Americans.
Examples of other medical plans’ required staff positions include a community liaison in Illinois, who connects enrollees with community-based services, and a service coordination director in Kansas, who oversees quality improvement initiatives related to SDOH. Dental contractors could potentially leverage medical MCO positions and their expertise to streamline care experiences for enrollees across medical and dental systems.
Coordination between Dental and Medical Systems
To better integrate dental and medical care, dental and medical managed care use staff members to connect physical health and oral health services across contracts. These staff members also connect Medicaid enrollees to community services to meet social needs.
- In its dental contract, Tennessee requires a coordinator to work with the medical MCO and develop a system to exchange data with the MCO.
- Florida requires MCOs to have a liaison for their prepaid dental health plan to help integrate medical care, behavioral health, and long-term benefits with the dental plan.
- Iowa requires the dental contractor to send a care facilitation plan to the state with information on how the plan will facilitate coordination between dental and medical plans and providers.
Data Sharing and Technology
Eleven states require some form of data sharing between dental and medical plans, or between plans and community organizations. Requirements for integrating different agencies’ social determinant data and sharing information across systems allow medical, dental, and social services to work together to coordinate care for members and encourage referrals and follow-up tracking.
- In Tennessee, the dental benefits manager must facilitate data exchange with school-based health programs to coordinate any needed follow-up care.
- Washington State tasks its dental contractors with using health information technology and health information exchanges to coordinate care between physical health, behavioral health, and social services and other community-based organizations.
Other states are creating their own online platform or mobile applications to improve access to social services for their Medicaid enrollees. These platforms are mentioned specifically in medical managed care plan contracts, but have the potential to be used by dental contractors as well.
- Kansas developed a web-based, mobile-friendly application that connects service coordinators to community resources, such as food banks and pantries, housing, clothing, legal resources, and transportation.
- Medicaid Prepaid Health Plans in North Carolina will use a telephonic, online, and interfaced IT platform to refer members to social services and track the outcomes of these referrals.
Performance Improvement
A number of states encourage both dental and medical plans to engage in performance improvement projects (PIPs) in order to address SDOH.
- In Nevada, dental vendors are required to conduct both a clinical and non-clinical PIP every year. Non-clinical PIPs can focus on cultural competency and accessibility of services, among other SDOH.
- Oregon Coordinated Care Organizations (CCOs) must implement PIPs that address at least four of eight designated focus areas, which include addressing SDOH and equity, and integrating primary care, behavioral health care, and/or oral health care.
Through these PIPs, state managed care plans (both dental and medical) can launch pilot interventions to improve health outcomes by addressing SDOH and reducing barriers to care.
Conclusion
Research shows that addressing individual social needs leads to better oral health outcomes. Despite having different levels of funding and varying Medicaid adult dental benefits, states across the country are finding ways to invest in SDOH. While not all states have started to include SDOH requirements in their dental contracts, these examples show potential opportunities for dental plans to integrate some of the medical plans’ language and guidance into their own work. To learn more about how state Medicaid programs include SDOH-related language in their dental and medical Medicaid managed care contracts, view this interactive map.
Acknowledgements: This blog and map were made possible by the DentaQuest Partnership LLC. The authors would like to especially thank Trenae Simpson for her guidance and assistance, and Trish Riley and Jill Rosenthal for their helpful feedback. This information, content, and conclusions are those of the authors’ and should not be construed as the official position or policy of the DentaQuest Partnership LLC.
State Strategies to Address the Black Maternal Health Crisis
The inequities laid bare by COVID-19 underscore the importance of states’ efforts to develop policies and interventions to address all health disparities. Systemic racism, a driver of these inequities, also fuels disparities in maternal morbidity and mortality – Black women are four-times more likely to die from pregnancy-related causes than White women.
States are on the frontlines, working to improve maternal health outcomes and address racial disparities through strategies such as work force development, implementing policies to dismantle structural racism and address its consequences, extending postpartum coverage, collecting stratified data, and implementing quality improvement initiatives. States have developed several strategic approaches to address maternal health disparities.
Maternal Mortality Review Committees are multidisciplinary groups in states and cities comprised of health officials, obstetric, gynecological, and maternal-fetal medicine specialists, behavioral health providers, hospital association leaders, and community-based organization representatives. Cases of maternal mortality are identified in partnership with the committee, the state’s vital records office, and epidemiologists to determine whether each death was pregnancy-related and what factors contributed to the death. The data produced by these boards, often stratified by race and ethnicity, is crucial for identifying causes and for tailoring policy solutions at the state and local level. The Louisiana Pregnancy-Associated Mortality Review (LA-PAMR) recently published a new report outlining policy recommendations for changes at the structural, hospital, provider, and patient level. One of five recommendations the committee made is to identify and address racial and cultural biases across the network of care that serves pregnant and postpartum women, as well as in institutions that influence or coordinate with that network (e.g., public health and Medicaid).
Perinatal Quality Collaboratives (PQCs) are state or multi-state networks comprised of perinatal health care providers and public health professionals, such as pediatricians, obstetricians, and midwives. These collaboratives work to improve maternal and infant health by identifying health care processes that require quality improvement and offering expertise to improve these processes. Many PQCs are currently focusing on reducing racial, ethnic, and geographic disparities in health outcomes, improving identification of and care for infants with neonatal abstinence syndrome due to maternal substance abuse, and reducing preterm births. The California Perinatal Quality Collaborative (CPQC) was the founding organization of the state’s maternal mortality review committee and has multiple quality improvement projects underway that focus on health disparities, for example in preterm birth and low birthweight in newborns, and women and substance use during pregnancy. In 2018, CPQC launched the Health Equity Taskforce to achieve and improve outcomes for newborns and their families. Additional information on specific state collaboratives can be found at the Centers for Disease Control and Prevention’s webpage on perinatal collaboratives.
Person-centered maternal care models are strategies states can implement to provide high-quality care to pregnant women. Care coordination for pregnant women can help increase access and utilization of health care services and improve maternal and infant health outcomes
One care coordination model is Community Care of North Carolina’s Pregnancy Medical Home (PMH). PMHs in general provide evidence-based, high-quality care to patients and focus care management resources on pregnant women who are deemed high-risk. State Medicaid agencies are increasingly developing and deploying non-licensed, non-master’s-level treatment and support providers, such as peers and counselors, to provide a range of services to address the factors affecting maternal health. These peer support services and community-based teams are additional resources that can help improve maternity care while also addressing other social determinants of health. North Carolina and Wisconsin both have implemented the PMH model to deliver services to pregnant women.
Supporting doula services for pregnant women is another approach many states and the federal government are considering to address disparities in maternal health outcomes. A doula is a “trained professional who provides continuous physical, emotional, and informational support to a mother before, during, and shortly after childbirth to help her achieve the healthiest, most satisfying experience possible.” Currently, two states, Minnesota and Oregon, cover doula services for pregnant women enrolled in Medicaid. Doulas can improve overall health outcomes for and reduce disparities among pregnant women, for example by lowering the rates of cesarean sections and preterm births. For more information on financing doula services, read the National Academy for State Health Policy (NASHP) report, Four State Strategies to Employ Doulas to Improve Maternal Health and Birth Outcomes in Medicaid.
Postpartum Medicaid Coverage Extensions: Lapses in insurance coverage or losing insurance coverage during the postpartum period can disrupt care and result in untreated and serious health threats. More than half of pregnancy-related deaths occur during the postpartum period, and currently under federal law, pregnancy-related Medicaid coverage ends 60 days after delivery. To promote continuity of coverage and care and address maternal morbidity and mortality, many states, such as Illinois and Missouri, are turning to 1115 demonstration waivers to extend Medicaid coverage and certain benefits beyond 60 days postpartum. In one case, California used state funds to extend Medicaid coverage for women with postpartum depression. Policy options to extend Medicaid coverage can be especially beneficial for women of color, who are more likely to experience higher rates of no insurance coverage than White, non-Latinx women. For more information about this topic, explore NASHP’s interactive map highlighting States’ Efforts to Extend Medicaid Coverage to Postpartum Women.
NASHP will continue to track state efforts to address the impact of systemic racism on maternal and infant health and document how states are working to advance maternal health equity by implementing alternative payment models, addressing social determinants of health, expanding telehealth, partnering with community-based organizations, and improving data collection to improve maternal health outcomes broadly and during COVID-19.
Proposed IRS Rule Would Incentivize Health Care Sharing Ministries and Direct Primary Care Arrangements
Last week, the Internal Revenue Service (IRS) released a proposed rule that would for the first time allow tax deductions for money spent for certain health care programs and arrangements, including direct primary care arrangements and health care sharing ministries.
The changes appear designed to incentivize and promote programs that may supplement – but in some cases are misconstrued as an alternative to – health insurance. These options do not provide comprehensive benefits and lack many safeguards that ensure access to services while also protecting consumers from financial liability for excessive costs of care. Comments on the proposed rule are due by Aug. 10, 2020 and may be submitted here.
The Rise of Health Insurance “Alternatives”
Rising health care costs and coverage have made health insurance too expensive for many Americans. This has driven many Americans to seek alternate ways to access the care they need. One option that has gained popularity in recent years is health care sharing ministries, organizations whose members who share a common set of religious or ethical beliefs come together to share medical expenses. It is estimated that nearly 1 million individuals currently participate in health ministries across 29 states.
Similarly, direct primary care arrangements (DPCAs) have also gained popularity. In a DPCA, a patient contracts directly with a primary care provider, or group of primary care providers, to access services at a set annual or periodic fee. These arrangements eliminate use of a third-party (a health insurer) in negotiations over care and cost, though in some cases may serve as a supplement to an individual or employer’s health insurance policy. Contracts vary as to what services might be covered under each DPCA, such as number of visits or laboratory service costs. Rarely do they include the type of specialty care services that may be necessary for treatment of diseases. More than 300,000 individuals participate in DCPAs in 48 states and Washington, DC.
Because of the limited scope of DPCA and health ministries, they are typically not classified as health insurance under state and federal laws. This means that they are exempt from many laws and regulations that govern health insurance coverage, including consumer protection laws such as mandated coverage of certain benefits (like hospitalizations) and protections for those with pre-existing conditions. These consumer laws also include financial protections like caps on out-of-pocket consumer spending and requirements that compel health insurers to spend at least 80 percent of payments they collect toward care received by members.
Proposed Regulatory Changes
During annual tax filings, individuals may opt to either take a standardized deduction or itemize their applicable deductions. Those who opt to itemize deductions may include medical expenditures as part of their deductions if those expenses total more than 10 percent of the individual’s (or household’s) income. Allowable medical expenses include payments made for:
- The diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body;
- Transportation to essential for medical care;
- Qualified long-term care services; and
- Insurance covering medical care or qualified long-term care (Internal Revenue Code § 213(d))
The rule proposes to include DPCAs and ministries as allowable medical care expenses for the purposes of tax deductions. Specifically, the rule interprets the definition of “insurance covering medical care” to include ministries and, in some cases, DPCAs. DPCAs would also qualify as payments made for “diagnosis, cure, etc. of disease”. In addition, the rule clarifies that payments made to government-sponsored health care programs, such as Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), TRICARE, and the Veteran’s Health Program, would count as payments toward insurance and so could be included as medical care deductions. These changes would take effect as for the tax year following adoption of the final rule (likely tax year 2021).
As elaborated in the proposed rule, the classification of ministries and some DPCAs as insurance relies heavily on existing regulations governing tax deductions, which broadly define health insurance to include insurance that covers medical care and contracts “for membership in an association furnishing cooperative or so-called free-choice medical service”. This definition differs from other common definitions of insurance, including the Employee Retirement Income Security Act (ERISA) and the Public Health Service Act (PHS Act), which define insurance as “benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or a health maintenance organization (HMO) contract offered by a health insurance issuer.”
The proposed rule clarifies that its definition of insurance should have no bearing on whether health ministries should be considered insurance under other state or federal laws. However, the changes have implications for how DPCAs and ministries would be treated in relation to other programs designed to support consumer spending on health care services, specifically health reimbursement arrangements (HRAs) and health savings accounts (HSAs). Because of the changes in how health ministries and DPCAs would be classified under this proposed rule:
- Health ministry participants could not contribute toward an HRA; and
- Neither DPCA nor ministry participants could contribute toward an HSA (with some narrow exceptions allowed for limited DPCAs). However, an HRA may be used to provide reimbursement for a DPCA.
Potential Impact of Proposed Changes
The changes proposed under the rule may have limited actual impact on consumers, in part because of the high threshold for spending consumers must meet to make it worth itemizing their deductions (see box). Because of this threshold, these deductions are unlikely to have any bearing for low-income earners, including those who qualify for Medicaid and CHIP and could, technically, deduct spending related to those programs as clarified under the proposed regulation. Furthermore, it is unlikely that spending on health ministries or DPCAs alone could push an individual above the standard deduction threshold. Monthly fees for DPCAs range from $50 to $200 per month. Spending on health ministries varies, with one report indicating that spending could range from a few hundred dollars to up to $1,000 per month depending on factors including age and household size.
Nonetheless, the idea of the deduction may entice more individuals to participate in these plans. While health ministries and DPCAs may serve a role in supplementing how consumers access or pay for care, there are growing concerns about their effect on consumers and health care markets when purchased in lieu of health insurance coverage. For example, these consumers will not be included in health insurance risk pools. This could result in higher premiums for those who remain in the market, as there will fewer individuals to spread risk.
Especially concerning are increasing reports of health ministries engaged in marketing practice that mislead consumers into thinking that their products are comparable to health insurance. However, because these products do not guarantee coverage of certain costs or services, they may leave consumers on the hook for high medical expenses. States, including Nevada, have issued broad warnings to consumers about health ministries and regulators in California, Colorado, Connecticut, Maryland, New Hampshire, New York, Texas, Rhode Island, Vermont and Washington State have taken aggressive actions, including issuing cease-and-desist orders, against one ministry for deceptive practices.
The National Academy for State Health Policy will monitor states’ responses to the proposed regulation. Final comments on the proposed rule are due Aug. 10, 2020. The full text of the rule can be found here.
For individuals living with complex, often chronic conditions, and their families, palliative care can provide relief from symptoms, improve satisfaction and outcomes, and help address critical mental and spiritual needs during difficult times. Now more than ever, there is growing recognition of the importance of palliative care services for individuals with serious illness, such as advance care planning, pain and symptom management, care coordination, and team-based, multi-disciplinary support. These services can help patients and families cope with the symptoms and stressors of disease, better anticipate and avoid crises, and reduce unnecessary and/or unwanted care. While this model is grounded in evidence that demonstrates improved quality of life, better outcomes, and reduced cost for patients, only a fraction of individuals who could benefit from palliative care receive it. 
