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.
While the Supreme Court Appears Likely to Uphold the Affordable Care Act, States Still Face Uncertainty
Last week, the US Supreme Court heard oral arguments in the case of California v. Texas about the constitutionality of the Affordable Care Act’s (ACA) individual mandate to purchase health insurance coverage, which some states are challenging because Congress eliminated the tax penalty associated with the mandate.
Based on the justices’ questions during oral arguments, many legal analysts consider it unlikely that the entirety of the ACA will be struck down. However, exactly how the Supreme Court will rule cannot be predicted — as evidenced by the court’s 2012 decision in NFIB v. Sebelius that made the ACA’s Medicaid expansion a state option. With a decision not expected until spring 2021, states must operate their health programs under a veil of uncertainty in the coming months and be prepared for a range of possible rulings.
Background
Spearheaded by Texas, 18 Republican-led states and two individuals are challenging the ACA’s constitutionality, and the Trump Administration’s Department of Justice (DOJ) is also supporting the challenge. Their main argument centers on a change that was made through the 2017 enactment of the Tax Cuts and Jobs Act (TCJA), which included a provision to reduce the ACA’s individual mandate penalty to zero dollars. They contend that because the 2012 Supreme Court case NFIB v. Sebelius upheld the constitutionality of the ACA based on Congress’ taxing power, now that there is no revenue associated with the mandate penalty, it can no longer be considered a tax and consequently the individual mandate is unconstitutional. The plaintiffs also argue that because the individual mandate is so crucial to the ACA, the entire law should be ruled unconstitutional.
Defending the ACA is a group of Democratic attorneys general from 21 states and the Democratic-led US House of Representatives.
- For a detailed report on the background and evolution of the case, read the Kaiser Family Foundation’s report, Explaining California v. Texas: A Guide to the Case Challenging the ACA.
- For information about the potential implications for state health policy if the entire ACA is struck down, read this National Academy for State Health Policy (NASHP) blog, You Can’t Unring a Bell – Implications for States if the Supreme Court Upends the Affordable Care Act and view/download this slide deck, A Review of the ACA’s Key Provisions and the Potential Implications of the Supreme Court’s Overturning the Law.
Key Questions before the Supreme Court
- The court must first determine if at least one state or individual plaintiff has standing to bring the lawsuit.
- If they do, then the court will decide whether or not the individual mandate is constitutional — and if the justices decide it is, then the ACA will stand.
- If a majority of the court rules that the individual mandate is unconstitutional, then its next decision relates to severability.
- The court will decide whether the individual mandate can be severed, leaving the rest of the ACA in effect without the mandate.
- Or, if a majority of justices decide it cannot be severed, then they will determine whether only parts of the law or all of it must be struck down. (It also is possible that the Supreme Court could send the issue of severability back to the lower courts to determine.)
Key Points from Oral Arguments
Do plaintiffs have standing? A number of the justices’ inquiries focused on the question of standing — specifically whether the challengers have a legal right to sue because the mandate as it exists now causes substantial harm to them. The challengers’ argument is that the 18 states have standing because of increased costs associated with the mandate, such as when more individuals enroll in Medicaid to comply with it and the administrative costs of filing paperwork needed to meet the ACA’s reporting requirements. The two individual plaintiffs contend they have standing because they believe they are obligated to purchase health coverage due to the mandate and incurred costs in doing so.
As noted in SCOTUSBlog’s analysis of the oral arguments, the justices appeared somewhat divided on the issue of the challengers’ claim of standing, and their discussion centered on the Trump Administration’s additional argument that the plaintiffs have standing because they are injured by other parts of the ACA that are directly connected to the mandate. As noted by Justice Elena Kagan, given that Congress often passes legislative packages that cover many different issues, it would be significant “…if you can point to injury with respect to one provision and you can concoct some kind of inseverability argument, then it allows you to challenge anything else in the statute.”
Speaking on behalf of the states defending the ACA, California Solicitor General Michael Mongan argued that the two individual plaintiffs lack standing because, without an enforcement mechanism, the mandate no longer compels them to purchase insurance. Regarding whether the 18 state challengers’ have standing, Mongan argued they have not demonstrated that they have faced greater costs due to the mandate.
Is the individual mandate constitutional? The state challengers’ main argument is that because the Supreme Court’s 2012 decision centered on whether the mandate was a valid exercise of Congress’ taxing power, with the mandate no longer generating federal revenue, it is now unconstitutional. Also, the challengers argued that the specific language used in the text of the mandate obligates individuals to purchase coverage, despite the fact there is no longer a penalty for not buying health insurance.
In contrast, the ACA’s defenders argued that the mandate is not a command to purchase health coverage, and that because Congress removed the financial penalty associated with the individual mandate, it is “toothless” and effectively inoperative. Mongan noted that Congress has “routinely created inoperative provisions … And they haven’t been viewed as constitutionally problematic because they don’t alter legal rights or responsibilities or bind anyone.”
Justice Kagan cited the court’s 2012 ruling that the mandate was constitutional, and that with the TCJA’s removal of the mandate’s financial penalty, “…Congress has made the law less coercive…” She added that because of this, it does not seem valid to now deem the mandate unconstitutional.
Is the individual mandate severable from the ACA? The challengers argued that even though there is no enforceable penalty now, the text of the ACA indicates that the individual mandate is inextricably tied to its functioning. Some of the justices appeared to agree with this assessment, noting that in the 2012 case, the ACA’s defenders contended that the mandate was essential for ensuring successful operation of the ACA.
In response, the ACA’s defenders highlighted the ACA’s carrot-and-stick approach — noting that even though the financial penalty (the stick) has been nonexistent since 2019, enrollment in the health insurance marketplaces has remained relatively stable, most likely due to the “carrots” (the marketplace subsidies and insurance protections) emerging as more effective than originally anticipated. Additionally, they noted that the Congressional Budget Office (CBO) determined in 2017 that the ACA’s insurance markets would continue to function the same regardless of whether Congress chose to reduce the penalty amount to zero or fully eliminate the mandate provision.
Noteworthy because of their potential to side with the court’s three liberal-leaning justices, Chief Justice John Roberts and Justice Brett Kavanaugh appeared to question the argument by the challengers that the elimination of the mandate penalty effectively invalidates all of the ACA. They emphasized that it did not seem that Congress intended the entire ACA to fall when it zeroed out the mandate penalty under the TCJA considering it chose not to repeal the full law at that time. Justice Kavanaugh also commented that the court’s prior decisions related to severability could serve as an argument for not striking down the entire ACA if the mandate is found to be unconstitutional, saying, “I tend to agree with you that it’s a very straightforward case for severability under our precedents, meaning that we would excise the mandate and leave the rest of the act in place…”
Next Steps
A decision may not come until the end of the court’s term in June 2021 and there are a range of potential outcomes. However, as a Health Affairs analysis of the oral arguments pointed out, it appears likely that if even if the court decides the individual mandate is unconstitutional, many of the justices’ comments related to the severability of the mandate appear to indicate that the court could decide to keep the rest of the ACA in place.
As states await the outcome, state-based marketplaces and Medicaid programs are focusing on enrolling individuals in coverage, while also continuing to respond to the challenge of increasing COVID-19 cases and preparing for the distribution of an eventual COVID-19 vaccine. The incoming Biden Administration will need to be poised to work with states to respond to the implications of the court’s ruling if parts or all of the ACA are struck down.
The Biden Health Plan and States: Opportunities for Collaboration
As he launched his Covid-19 Task Force this week, President-elect Joe Biden moved quickly to turn his health care campaign promises into policies in preparation for entering the Oval Office in January. In addition to ending the pandemic, Biden plans to build on the Affordable Care Act (ACA) by expanding access to and affordability of insurance coverage, creating a public option, and lowering Medicare eligibility to age 60.
Biden also proposes to lower drug costs, end surprise medical billing, address long-term services, expand mental health services, increase funding to community health centers and state Medicaid programs, address maternal mortality and its impact on Black women, improve rural health care, work with providers to improve health outcomes and quality, and protect consumers against price increases resulting from provider consolidation. But his ambitious agenda will likely face some stiff headwinds.
First, the Supreme Court today began hearing oral arguments in Texas vs. California, which may lead to the overturning of all or portions of the ACA. While many court observers doubt the entire law will be scuttled, the future of the ACA will not be certain until the Supreme Court rules, which could come as late as June 2021. The court’s 2012 decision in NFIB vs. Sebelius is a reminder of the challenges of trying to predict how the court will rule. In that decision, the court upheld the constitutionality of the ACA but surprised the health policy community by nullifying the law’s mandate for Medicaid expansion, making that decision a state option. The uncertainty about the court’s action on the current ACA case will weigh on the Biden Administration, which must be ready for whatever results.
Many of Biden’s proposals require Congressional action and budget approval in a particularly challenging economic and political environment. Should Republicans maintain their Senate majority following the two Senate run-off elections in Georgia, the Biden Administration can expect resistance to many of its proposals. While the President-elect and new Congress will undoubtedly work to address the nation’s first priority of curbing the ongoing pandemic and in so doing so jumpstarting the economy, the new Administration is expected to fight as hard for health care reforms that Biden promoted on the campaign trail.
As the debates unfold and Congressional roadblocks arise, states will have new opportunities to advance health care reforms and innovations – giving the new Administration a temporary safe harbor from the headwinds of Congressional opposition. The Biden Administration can, through regulatory reforms, Medicaid and 1332 state innovation waivers, and discretionary funding, enable states to implement some of his proposals and invest in other innovative health policies and programs as states continue to serve as the nation’s laboratories of innovation
Access to Affordable Coverage
State and federal marketplaces: Biden proposes to strengthen the ACA by:
- Eliminating the “cliff” that makes individuals with incomes exceeding 400 percent of the federal poverty level (FPL) ineligible for advanced premium tax credits (APTC);
- Limiting what people spend on health insurance to 8.5 percent of their incomes; and
- Making the benefit plan richer, basing APTC tax credits on gold plans instead of less robust silver plans.
The Biden Administration may provide greater funding for outreach and extend open enrollment and special enrollment periods – now offered by only state-based marketplaces – throughout the federal marketplace (healthcare.gov).
Medicaid enrollment: The federal Public Health Emergency, now set to expire Jan. 20, 2021, is expected to be extended, and with it the mandate enabling states to maintain their current Medicaid enrollment. Biden may use the Public Health Emergency’s authority to temporarily increase APTCs, though that raises questions about the impact on consumers and carriers when the emergency ends. Biden is also expected to seek to help state and local governments by increasing federal funding for Medicaid.
Complementary state strategies: Prior to the pandemic, several states had increased insurance premium subsidies available to consumers, but current revenue shortfalls make that unlikely in most states in the near future. However, the federal government can move quickly to overturn regulations and other guidance that has impeded state-based marketplaces and new coverage initiatives. In the next week, the National Academy for State Health Policy (NASHP) will release a comprehensive document, developed with input from state-based marketplaces, that outlines regulatory fixes that the Biden Administration could implement, including:
- Immediate changes that would protect consumers from Internal Revenue Service penalties during the pandemic and restore anti-discrimination protections;
- Remove enrollment disincentives for legal immigrants;
- Eliminate the double-billing requirement for non-Hyde abortions;
- Protect the integrity of the individual insurance market; and
- Rescind 2018 federal guidance on 1332 waivers to ensure that all coverage available through the waivers is as comprehensive and affordable as the ACA’s.
Public option: Biden proposes a federal public option, offered through the health insurance marketplaces, that would have the purchasing power to ensure affordable prices and be available to the individual market and employees for whom employer coverage is too costly. The public option would auto-enroll individuals with incomes up to 138 percent of the FPL. States that have expanded Medicaid would have the option of moving individuals into a premium-free public option plan or keeping them in Medicaid.
Complementary state strategies: Washington State has enacted a public option, which is offered on its exchange, that is currently being phased in. New Mexico and Colorado have attempted the same. At issue is how to make sure the plans provide a competitive pricing advantage. NASHP has developed a hospital cost tool to help state officials easily evaluate hospital finances. The tool also provides information to inform discussions about how to set hospital prices as a percent of Medicare under a public option. The Biden Administration has broad authority to use funding through the Center for Medicare & Medicaid Innovation to advance public options and approve 1332 or Medicaid waivers that could support different models, including a Medicaid buy-in initiative.
Impact on Prescription Drug Pricing
Negotiate Medicare drug prices: The Biden plan seeks legislative authorization to use Medicare’s purchasing power to negotiate drug pricing using a model similar to Germany’s, in which insurers and manufacturers negotiate ceiling prices based on comparative effectiveness research or else face binding arbitration.
Limit launch prices for drugs without competition or that are abusively priced. An independent review would determine the value of specialty, high-cost drugs and recommend a price similar to those found in other countries. Medicare, private plans operating in the marketplace, including the public option, would have access to these prices
Limit price increases for bio-similars and generics to medical care inflation rates. Manufacturers would need to adhere to the limits or pay a tax penalty.
Support drug importation from Canada. President-elect Biden supported state initiatives to import drugs. Currently, six states (VT, FL, CO, ME, NM, and NH) have enacted importation laws.
Complementary state strategies: Recently issued federal rules authorizing importation require some revision to support state implementation efforts. Also, states would benefit from federal assistance in communicating with the Canadian government.
NASHP has developed model state laws that mirror the Biden proposals. One uses international pricing to set a ceiling that applies to what commercial payers in a state would pay for certain high-cost drugs and has already been introduced in Pennsylvania. Other states are expected to follow. Should the Biden Administration succeed in pegging Medicare rates to international prices, states could benchmark to those rates.
Another NASHP model law uses the Institute of Clinical Effectiveness Research’s (ICER) list of unsupported drug price increases and establishes tax penalties for manufacturers whose drug prices are not supported by clinical evidence, according to ICER. A third model law gives authority to state attorneys general to take legal action in cases of generic drug price gouging. All three state model laws have been developed with legal guidance but would benefit from collaboration with the US Department of Justice and other federal agencies.
These Biden proposals would significantly expand access to affordable coverage and curb drug prices, but they are expected to face strong headwinds as the new Administration works to manage the pandemic, awaits the Supreme Court’s decision on the future of the ACA, and confronts a possible Senate majority that could oppose much of the Biden agenda.
State actions alone cannot replace nationwide, consistent policy as proposed by the President-elect, but their initiatives and innovations can begin to plant the seeds should the Administration be unable to immediately overcome political and stakeholder opposition, and state efforts can help build momentum for future federal reforms.
As SCOTUS Considers ACA’s Future, State Marketplaces Enroll Consumers amid COVID-19
As the Supreme Court hears oral arguments today about the fate of the Affordable Care Act (ACA) in the case of California vs. Texas, state-based health insurance marketplaces (SBMs) are actively connecting consumers to health insurance coverage during the annual open enrollment period that launched Nov. 1.
While the court case casts a shadow of uncertainty over the ACA, COVID-19 and the ensuing economic crisis have increased the need for affordable coverage and forced SBMs to alter their consumer engagement strategies. Using lessons learned from their recent special enrollment periods (SEPs) to meet consumers’ coverage needs, SBMs are adapting outreach and enrollment efforts in recognition of social distancing standards.
Targeted Messaging to Promote Affordability and Accessibility
Recognizing the severe economic challenges many Americans face because of the pandemic, SBMs are carefully framing messages showcasing the affordability and accessibility of qualified health plan (QHP) coverage. As job and income losses make more individuals eligible for premium subsidies available through marketplaces, SBMs have adopted simple, straightforward messaging.
- California’s open enrollment slogan, “This way to health insurance” conveys the exchange is available to provide a path to coverage for all consumers.
- Minnesota’s promotion acknowledges the confusion that consumers may experience as they move from employer-sponsored insurance (ESI) and into the individual market with this targeted message: “UNsure about health insurance options? BEsure. MNsure.org.”
SBMs leaders recognize that access to high-quality, comprehensive health coverage is crucial to maintaining the health of individuals and communities, especially as thousands continue to be affected by COVID-19. SBMs are employing the following strategies to remind consumers that health coverage can provide peace of mind and critical care in the midst of the pandemic.
- Washington, DC has distributed masks printed with the message, “Get Covered, Stay Covered” to existing customers, contact tracers, and community leaders to emphasize that both forms of “coverage” — masks and health insurance – are necessary to maintain health during a pandemic. DC Health Link branding will also be incorporated into social distancing signs across the district.
- Massachusetts is highlighting that COVID-19 testing and treatment is covered by most marketplace plans and is promoting the “security” that comes when individuals know they and their families have coverage in the event of an emergency.
In addition to targeting messages to the uninsured, SBMs leaders recognize their existing customers may be vulnerable to losing coverage, especially because of changes in income or life circumstance that may change the amount of subsidies they are eligible for. This includes extreme fluxuations due to changes in employment status and changes in unemployment insurance (UI) payments. To ensure that customers remain enrolled in a comprehensive health plan, SBMs have utilized targeted email blasts, social media advertisements, and text messages to encourage consumers to update any change in their income or employment status — which could result in increased financial assistance or eligibility for Medicaid. SBMs are also encouraging consumers to remain in contact with their marketplaces as their circumstances change to ensure that the enrollees remain properly enrolled in coverage.
Modernizing Advertising and Media Campaigns
SBMs have total autonomy over their marketing and outreach campaigns, allowing them the flexibility to adjust their advertising based on shifting consumer behavior. As in years past, SBMs will advertise open enrollment through television ads, radio spots, out-of-home signage and branding, and targeted social media marketing. As individuals spend more time at home than ever before, SBMs have pivoted their advertising campaigns to account for new consumer patterns. With fewer commuting to work, several SBMs have transitioned their advertising away from the radio to digital streaming services like Spotify and Pandora. Similarly, many SBMs have diversified their digital media buys across streaming platforms like Hulu, YouTube, and Connected TV to reach consumers who are missed by traditional television campaigns.
- Idaho has shifted its advertising budget slightly to allocate more funds to digital media, which generates more website traffic than traditional media. However, Idaho will still invest significant resources into traditional media sources to reach consumers in rural areas who have limited access to internet services.
- Washington State has collaborated with local newspapers to create customized and regionally relevant content. These media partners will feature articles, dedicate newsletter content, and display advertisements to draw attention to open enrollment.
Adjusting In-Person Outreach for a Socially Distanced World
To adhere to social distancing restrictions, SBMs have transitioned most of their outreach efforts to virtual platforms and now offer very limited in-person events and consumer assistance. SBMs will offer virtual outreach events through Zoom, Facebook Live, and YouTube to help familiarize consumers with the coverage options and financial assistance available through the marketplace. To focus attention to these events, SBMs have leveraged partnerships with government agencies, faith-based groups, schools, and community organizations that have served as direct community touch points throughout the pandemic.
To maximize their outreach efforts, several states have elected to use consumer data to identify and reach consumer groups that would most likely benefit from marketplace coverage.
- Washington State has partnered with its Department of Financial Management to develop a map identifying communities with high rates of uninsurance to help inform the exchange about where outreach is needed.
- In Minnesota, demographic data is utilized to target social media advertisements and website banners to reach individuals who are most likely to be uninsured.
- Maryland’s Easy Enrollment program, which allows consumers to use the marketplace to estimate eligibility for coverage, has produced a list of over 40,000 consumers who have indicated that they are interested in learning more about coverage through the marketplace.
SBMs have also worked closely with their navigators and community partners to develop strategies to provide secure virtual enrollment assistance. Direct consumer assistance has been proven to significantly increase the likelihood that an individual will complete the enrollment process — particularly among low-income individuals and people of color. SBMs have adopted the following strategies to provide personalized enrollment assistance in a COVID-19 environment.
- Connecticut is hosting several virtual enrollment fairs during October and November. During these events, a representative helps consumers walk through the enrollment process with a screen-share feature so both can view enrollment forms together.
- Massachusetts has allocated additional funds to enable navigators to offer limited in-person assistance in place of walk-in centers. While navigators are not able to accept and process documents and payments, they can help customers with the application process.
- Nevada is scheduled to host a series of Facebook Live events with staff available to answer consumer questions and provide real-time enrollment assistance.
- In anticipation of their first open enrollment period as SBMs, New Jersey and Pennsylvania tripled their navigator programs to ensure that consumers would have the accessible support they need to navigate the new platform.
Strategies to Connect with the Recently Unemployed
With millions of Americans losing employment due to the pandemic, SBMs have taken steps to connect with individuals who have lost employer-sponsored insurance (ESI) coverage. A recent Commonwealth Fund study found that as of June 2020, 7.7 million Americans lost jobs with ESI as a result of the pandemic. Experts expect that unemployment and uninsurance will continue to rise as job losses become permanent and temporary policies, like grace periods granted to those unable to pay their monthly insurance premiums, expire. The SBMs officials acknowledge that many consumers who have lost ESI may be exploring coverage options on the individual market for the first time. To ease confusion and stress, SBMs have utilized the following strategies to connect the recently unemployed to coverage.
- New Jersey’s SBM has coordinated with the Department of Labor (DOL) to include a link to the SBM website within DOL’s consumer portal so individuals are reminded of their health coverage options when they check the status of their unemployment claims.
- Colorado has purchased targeted advertisements to reach those who search for Consolidated Omnibus Budget Reconciliation Act (COBRA) so consumers can compare cost and coverage options across programs.
- The Washington Health Benefit Exchange is telling consumers, “Filing for unemployment benefits? Visit the exchange to stay covered” to remind them to seek a new form of coverage after losing their ESI.
- Nevada includes informational pamphlets about open enrollment in direct mailers sent to individuals who have filed for unemployment. In addition, the state’s Department of Unemployment will share open enrollment information on its social media and web pages.
In addition to coordinating with their states’ labor and employment departments, several SBMs have bolstered strategies to connect with consumers who have recently been terminated by their employer. By monitoring Worker Adjustment and Retraining Notices, which require certain employers to give advance notice of mass layoffs, SBMs are able to identify employers that are about to conduct large-scale lay-offs and then work with their human resource departments to tailor an outreach strategy about marketplace coverage options. In many cases, consumers may access lower-cost coverage through the marketplace than through the COBRA coverage that employers are required to offer.
The open enrollment season for most states runs through Dec. 15, 2020, but several SBMs have extended their deadlines. Explore NASHP’s chart and interactive map, Where States Stand on Exchanges, for more information and links to SBM websites.
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.
States Need Federal Guidance to Plan for When the Public Health Emergency Ends
While the federal COVID-19 public health emergency – which allows for a range of state and federal policy flexibilities in programs such as Medicaid – was recently extended, considering the significant number of pandemic-related policies that states have implemented, officials need to begin preparing now for the eventual end of the emergency. Currently, there is little federal guidance about how states would unwind the many policy changes they have implemented in response to the pandemic.
In addition to the absence of directions detailing how states can return to pre-public health emergency (PHE) operations, states are still challenged by the economic effects of the pandemic, including significant declines in revenue that have depleted many state budgets. Meanwhile, thousands of individuals who have lost income or employer insurance coverage have enrolled in Medicaid, imposing an additional strain on state resources.
During the National Academy for State Health Policy’s 2020 annual conference and in recent discussions with leaders, state policymakers have expressed the need for ample time and federal guidance to prepare for the end of the PHE. A letter sent by the Medicaid and CHIP Payment and Access Commission (MACPAC) in late August to Department of Health and Human Services (HHS) Secretary Alex Azar echoed these concerns and also raised the issue that some state Medicaid agencies may need state legislative approval for certain program changes required to transition back to pre-PHE operations.
MACPAC recommended that federal officials should provide states with a minimum 90-day advance notice of the PHE’s termination, and that federal guidance about returning to regular processes should be provided to states as early as possible.
One of states’ key concerns is disenrolling individuals from Medicaid who may have become ineligible during the PHE. This is because the Families First Coronavirus Response Act (FFCRA) provided enhanced federal Medicaid matching funds tied to maintenance of effort (MOE) requirements that include a prohibition on terminating Medicaid coverage of individuals who were enrolled as of or after March 18, 2020. To comply with that requirement, often referred to as the “continuous coverage” provision, states are not fully processing their traditional Medicaid renewals. The purpose of this MOE requirement is to help prevent coverage disruptions, particularly at a time when consumers may be especially in need of coverage, yet also experiencing extreme fluctuations in income.
Although the increase in federal Medicaid funds provided by the FFCRA and the other MOE requirements do not expire until the end of the quarter in which the PHE ends, the continuous coverage provision ends on the last day of the month of the PHE. However, due to a number of reasons, states will not be able to immediately return to the regular processing of eligibility renewals. As noted by MACPAC, restarting these processes will require states to collect new information about enrollees’ income and other criteria to re-verify eligibility. To do so, states will need to make a number of eligibility system, policy and process changes.
States have emphasized the need for flexibility when reinstating eligibility redeterminations. For one, changes will need to be implemented within the context of strained state administrative capacity due to budget cuts, staff furloughs and reassignments to other departments to respond to COVID-19, early retirements, hiring freezes, and the need to focus on addressing increased demand for state-supported services. States also have different IT systems for determining Medicaid eligibility, each with distinctive programming challenges. This is further complicated by the fact that systems must be coordinated, and in several cases fully integrated, with health insurance marketplaces, a major vehicle through which consumers may seek Medicaid and marketplace coverage. Given these complications, states have expressed the need for a “menu of options” from the Centers for Medicare & Medicaid Services (CMS) detailing how to phase out the changes put in place during the PHE. Requirements for notifying enrollees about program and eligibility changes also vary by state, and states need time to develop notices and send out information to both individuals and providers about coverage changes.
Another important issue is that because the renewal process is currently backlogged, it could overwhelm states if federal officials require them to go back and process redeterminations for individuals with renewal dates that have already passed. In anticipation of the eventual end of the PHE, some states have been continuing to send out renewal notices to enrollees to gather and assess their information. In these states, coverage for eligible individuals is extended and while no action is taken to disenroll those who appear to be ineligible, they can be identified for follow-up at the end of the PHE. But many state officials have indicated that it would be helpful if federal guidance instead allows them to focus on moving forward with a rolling renewal date process when the PHE expires.
Colorado’s Department of Health Care Policy & Financing recently sent a letter to CMS administrators requesting certain federal actions to help it plan for the end of the PHE. Specifically, the state asked that CMS provide at least 60-days notice before the end of the PHE, and allow at least 90 days after the end of the PHE to conduct redeterminations and inform enrollees and providers about the associated changes — and it indicated that even more time may be needed if the PHE is extended beyond October because Medicaid enrollment will likely continue to increase over time. Similar to MACPAC, Colorado also stressed the importance of CMS providing specific guidance about redetermination requirements, and they requested additional guidance about aligning redetermination time frames between CHIP and Medicaid. Because Colorado’s pause on processing renewals in CHIP was implemented through a state plan amendment (SPA), its CHIP policies expire on the day that the PHE ends, as opposed to the Medicaid continuous coverage provisions, which expire on the last day of the month in which the PHE ends.
Colorado’s letter also emphasized that the state has at least 40 Medicaid projects and 65 home- and community-based services items that will need to be modified when the PHE expires. Some of these efforts will involve significant changes in claims processing and eligibility systems that will take time to implement and increase the workload of eligibility technicians. Some of the other issues that the state is seeking guidance on from CMS include:
- Whether states will have flexibility to stagger redeterminations and renewals after the end of the PHE to reduce the workload burden; and
- Whether federal Medicaid funding will be available for enrollees for whom the state is conducting redeterminations on for beyond 90 days if the state needs more time, as well as through any disenrollment appeals processes.
The letter also raised an issue that has been expressed by state-based marketplace (SBM) officials in other states — that states will need time to develop messaging and provide assistance to individuals who are no longer eligible for Medicaid in order to help them enroll in marketplace coverage. Many SBM officials are concerned that once the PHE ends, they may face an unmanageable influx of individuals transitioning from Medicaid to marketplace coverage. As federal officials develop guidance, they should take this issue into consideration and also factor in the timing of SBMs’ open enrollment periods.
In addition to eligibility redeterminations, states will also need sufficient time and federal guidance to unwind other policies implemented during the PHE, such as Section 1135 waivers that eased many provider-related requirements and validations, and Medicaid and CHIP disaster relief SPAs to facilitate enrollment or waive cost-sharing requirements. Another factor is that some states may be interested in retaining certain policy flexibilities implemented under the PHE, and as identified by MACPAC this will require states to take a number of steps to make these changes permanent.
States will also need guidance about resuming many federal reporting requirements that were put on hold during the PHE. Given the pandemic’s wide-ranging effects on coverage and care access, state Medicaid and CHIP officials have expressed concerns about how to determine baseline data for quality measures and provide information for other regular program integrity assessments. They indicated that they hoped CMS would allow flexibility in 2020 and 2021 federal reporting and auditing as states make good-faith efforts to come into compliance. SBM officials have expressed similar concerns about the potential of being penalized for certain policy choices and the need for federal recognition of the unique programmatic and operational challenges created by the pandemic.
As highlighted by MACPAC, “Delayed guidance, unrealistic expectations, or short implementation time frames for eligibility redeterminations and provider revalidations could disrupt state operations, result in beneficiaries churning on and off of Medicaid coverage, and jeopardize access to care.”
Although the PHE was extended again, states still face significant challenges without sufficient information from the federal government about how to transition back to regular operations. States urgently need formal federal guidance so they can begin effective and efficient planning efforts now, both to reduce administrative burdens and minimize disruptions in coverage and care.
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. 
