Tag Archives: Health Policy

Virginia Senate approves Medicaid expansion

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Virginia Senate approves Medicaid expansion

Virginia Senate approves Medicaid expansion

Virginia is on the cusp of expanding Medicaid after the Senate on Wednesday narrowly approved a budget that would allow the state to cover as many as 400,000 low-income people.

The House, which already voted in favor of expansion earlier this year, will have to vote again before the bill can go to Gov. Ralph Northam (D). Northam has made expansion one of the top priorities of his administration.

When it passes, Virginia will become the 33rd state, along with Washington, D.C., to expand Medicaid under ObamaCare.

The 23-17 vote for expansion is a major victory for Virginia Democrats and other ObamaCare advocates, who have been fighting for six years to convince enough Republicans in the state to accept federal money to pay for the expansion.

“We have the ability to move something through that’s very sure in these uncertain times,” said Sen. Emmett Hanger, Jr., (R), the sponsor of the Medicaid expansion compromise bill. “We can develop a uniquely Virginia plan. While it draws from the experience of many states that have been out there before us, it will serve our citizens.”

Northam’s predecessor, Gov. Terry McAuliffe (D), was unable to get Republicans in the state to expand Medicaid, but Democrats in the state have been gaining power and nearly flipped the state’s House of Delegates in November.

Under ObamaCare, the federal government originally covered 100 percent of the costs of states that expanded Medicaid beginning in 2014. In 2017, the federal share dropped to 95 percent; it will drop to 90 percent in 2020, but never fall below that amount.

The Virginia expansion relies on provider taxes as a way to raise money.

The expansion agreement comes at a cost for Democrats, as the state will eventually submit a waiver request to the federal government to impose work requirements and premiums on beneficiaries who earn more than the federal poverty level.

The Trump administration has made state innovation a priority and has promised to fast-track Medicaid waivers, especially those that will impose work requirements on beneficiaries.

Four states have been granted permission to do so — Arkansas, Kentucky, Indiana and New Hampshire — and six others have pending waivers.

Virginia has yet to work out the final details of the work requirement, but Senate proponents of the policy rejected arguments from expansion opponents that the requirement would be weak and unenforceable.

Northam has not said he supports work requirements, but he has said he will sign any legislation that expands Medicaid.

National Republicans have been attempting to derail Medicaid expansion in Virginia. White House Office of Management and Budget Director Mick Mulvaney in March urged Virginia not to pursue expansion, saying it was unsustainable, and that the administration is committed to addressing it.

Earlier on Wednesday, former Pennsylvania Sen. Rick Santorum (R) met with Virginia Republicans to speak about efforts in Washington to repeal ObamaCare, including the Medicaid expansion. Santorum has been working with conservative groups on a long-shot plan to keep repeal alive this year.

 

 

Providers argue against Medicaid rate cuts without oversight

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http://www.healthcarefinancenews.com/news/providers-argue-against-medicaid-rate-cuts-without-oversight?mkt_tok=eyJpIjoiTmpKa1pXWTVNVFkzWVRoaSIsInQiOiJNWHRUZHRjS2dlNkRPaGs2aFNZK0xBb05tS05iY2taMzBGZndmTGNWSWRubjFYVVNtOUhHb1N6VnlUVm40TGFyS3UyWitMM2ppc3VnVnM3eU03bHdFeTN4SFwvQktueldQUDd2YWN6dGJZZ0pBZ25OK0pcL2xrbDZoSWpuaitaRzhjIn0%3D

 

States with at least 85% of their Medicaid population in managed care could implement nominal payment cuts without assuring care.

Hospitals, particularly rural providers, would be hurt by a Centers for Medicare and Medicaid Services proposed rule that would force them to take lower Medicaid rates without a review of the impact of the cuts, according to comments made to CMS asking for a reconsideration of the plan.

Provider organizations, hospitals, the Medicaid and CHIP Payment and Access Commission, are among those asking the Centers for Medicare and Medicaid Services to rethink its proposed rule.

Comments were due this week.

CMS proposed the rule in March to allow states that have a comprehensive, risk-based Medicaid managed care enrollment that is above 85 percent of their total Medicaid population to get around network adequacy rules when implementing “nominal” rate changes.

States had raised concern over the administrative burden associated with the current requirements, particularly for states with high rates of Medicaid managed care enrollment.

For states proposing nominal cuts below 4 percent a year or 6 percent over two years, the rule amends the process for them to document whether Medicaid payments in fee-for-service systems are sufficient to enlist providers to assure access to covered care and services.

These states would be exempt from access monitoring requirements and they would not need to seek public input on the rate reductions.

America’s Essential Hospitals said, “Requiring states to ensure, through monitoring, that rate reductions do not diminish access to needed services is particularly important now, as access monitoring reviews are the only vehicle left for providers to challenge state payment rate decisions.”

The Federation of American Hospitals contends that the rule would allow for more than nominal rate changes. If finalized, FAH said, the rule would allow for an estimated 18 states to implement a rate reduction of up to 12 percent over a period of four years or 16 percent over five years, without going through requirements for ongoing monitoring of the impact of the rate changes.

This would disproportionately impact vulnerable Medicaid beneficiaries and subject providers with unsustainable rate reductions, FAH said.

Most states, even those with very high rates of managed care enrollment, often exclude certain categories of particularly vulnerable groups from managed care plans, the organization said. People with physical, mental or intellectual disabilities or who are elderly, largely get services through fee-for-service, FAH told CMS Administrator Seema Verma.

The Medicaid and CHIP Payment and Access Commission said it did not find the states’ argument of administrative burden compelling enough given the federal government’s obligations to oversee state performance and assurances related to access.

“Moreover, exceptions to reporting may introduce gaps in oversight,” MACPAC Chair Penny Thompson said. “In short, the need for states to maintain resources and tools to monitor access as an ongoing element of state program administration and decision making outweighs the limited savings states would achieve as a result of these changes.”

 

‘What The Health?’ Campaign Promises Kept, Plus ‘Nerd Reports’

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https://khn.org/news/podcast-khns-what-the-health-campaign-promises-kept-plus-nerd-reports/

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President Donald Trump managed to fulfill — at least in part — two separate campaign promises this week.

To the delight of anti-abortion groups, the administration issued proposed rules that would make it difficult if not impossible for Planned Parenthood to continue to participate in Title X, the federal family-planning program. And Congress cleared for Trump’s signature a “right-to-try” bill aimed at making it easier for patients with terminal illnesses to obtain experimental medications.

Also this week, the National Center for Health Statistics and the Congressional Budget Office issued reports about Americans both with and without health insurance and the cost of subsidizing health insurance to the federal government.

And May’s “Bill of the Month” installment features some very expensive orthopedic screws.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Margot Sanger-Katz of The New York Times, Sarah Kliff of Politico and Alice Ollstein of Talking Points Memo.

Among the takeaways from this week’s podcast:

  • The Trump administration’s proposed rule to cut Title X reproductive health funding for groups that perform abortions was designed to meet demands from the president’s religious supporters, but it could backfire by mobilizing liberal voters.
  • The changes being considered might also open the door for some religious-based groups that don’t support abortion — or perhaps even contraception — to get federal Title X funding.
  • Conservatives’ campaign to get a “right-to-try” bill through Congress has been driven in large part by individual patient stories.
  • New data released by the Centers for Disease Control and Prevention this week shows the uninsured rate did not grow in 2017, despite a number of changes that the Trump administration made to the marketplace and federal promotion of it.

Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too.

 

What Barbershops Can Teach About Delivering Health Care

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What Barbershops Can Teach About Delivering Health Care

Image result for barbershop poll

Heart disease is the most common killer of men in the United States, and high blood pressure is one of the greatest risk factors for heart disease. Despite knowing this for some time, we have had a hard time getting patients to comply with recommendations and medications.

A recent study shows that the means of communication may be as important as the message itself, maybe even more so. Also, it suggests that health care need not take place in a doctor’s office — or be provided by a physician — to be effective.

It might, as in this study, take place in a barbershop, an institution that has long played a significant social, economic and cultural role in African-American life. A setting that fosters both confidentiality and camaraderie seems like a good place to try reaching men to talk about hypertension.

Years ago, researchers ran an experiment in which they trained barbers to check blood pressure and refer people with high levels to physicians. One group received this intervention; a control group received pamphlets handed out by barbers. Blood pressure values were only minimally improved in the intervention group. This was thought to be because even when patients were referred to primary care physicians, those doctors rarely treated their condition appropriately.

The more recent study went further, removing physicians almost entirely from the process. The control group consisted of barbers who encouraged lifestyle modification or referred customers with high blood pressure to physicians. In the intervention group, barbers screened patients, then handed them off to pharmacists who met with customers in the barbershops. They treated patients with medications and lifestyle changes according to set protocols, then updated physicians on what they had done.

The results were impressive. Six months into the trial, systolic blood pressure (the higher of the two blood pressure measures) in the control group had dropped about 9 mm Hg (millimeters of mercury) to 145.4, which is still high.

In the intervention group, though, blood pressure had dropped 27 mm Hg to 125.8, which is close to “normal.” If we define the goal of blood pressure management to be less than 130/80, more than 63 percent of the intervention group achieved it, compared with less than 12 percent of the control group.

It gets better. The rate of cohort retention — measuring how many of the patients remained plugged into the study and care throughout the entire process — was 95 percent.

The barbershop customers were part of a population that is traditionally hard to reach. More than half of participants lived in households earning less than $50,000 a year, and more than 40 percent in households earning less than $25,000. On average, they were overweight or obese, about a third smoked, and more than a fifth had diabetes. Yet the improvement in blood pressure was more than three times that of the average of previous pharmacist-based interventions seeking to improve blood pressure, and many of those had focused on populations easier to reach.

One reason this trial succeeded where others failed is that it adapted its intervention to overcome barriers. When barbers weren’t consistently screening customers by measuring their blood pressure, pharmacists stepped in to do that. When labs slowed things down, pharmacists brought measuring tests to the barbershops.

The larger implications of this study shouldn’t be ignored. Getting barbers involved meant health messages came from trusted members of the community. Locating the intervention in barbershops meant patients could receive care without inconvenience, with peer support. Using pharmacists meant that care could be delivered more efficiently.

Of course, this study is limited by the usual sorts of questions. Who will pay for this in the real world? Who would do the training necessary to scale it up? Who would be responsible?

But those concerns reflect the shortcomings of our current health care system, not those of the study. Health care reimbursement in the United States usually focuses on the clinical encounter, at a physician office or hospital. This reflects a belief that care is best offered there, even when evidence says otherwise. Coverage and payment focus on the individual patient, not on the community, even when research shows that the latter is more effective. Care often requires the participation of a physician, even when studies prove that it can be delivered well in many cases by midlevel practitioners.

It’s important to remember that we have the health care system we do because of history and economics, not because of studies that show it’s optimally designed. Changes are most often made within the current framework; those that buck the system are usually met with more resistance.

Retail clinics may provide better access, but many professional organizations oppose them. Lifestyle changes may do more to improve health than drugs. But getting the system to recognize that diet and exercise might prevent diabetes, for example — and to pay for that intervention — requires huge efforts and decades of time.

If we really want to improve health on a large scale, especially with populations distrustful of the health care system, it seems we need to go to where they are; to use people they trust to deliver messages; and to allow care to occur without much of the infrastructure usually demanded for billing. Such efforts may not be traditional, but they may deliver much better results.

 

Short-Term Plans Could Bring Long-Term Risks to California’s Individual Market

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Short-Term Plans Could Bring Long-Term Risks to California’s Individual Market

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The Trump administration is considering changes to federal rules regulating short-term, limited-duration insurance (“short-term plans”) that could result in the expansion of these plans in California.

This report, written by Georgetown University’s Center on Health Insurance Reforms, provides an overview of short-term plans and the current market for these plans in California. It explains how changes to federal policy around short-term plans might affect California’s individual health insurance market and describes policies that various states are pursuing in response to these changes.

Key points include:

  • Short-term plans are exempt from the Affordable Care Act’s consumer protections. Insurers can deny coverage based on preexisting conditions, not cover certain services, and limit what they will pay for services. For example, many short-term plans currently available in California do not cover maternity and newborn care, mental health and substance use services, and outpatient prescription drugs. They also limit the total amount that plans will pay per day in the hospital and for particular services, such as surgeon fees, in addition to imposing a maximum the plan will spend toward claims covered by the policy.
  • Short-term plans are rare right now in California, but that could change. There is only one insurer currently selling approved short-term plans in California, and fewer than 10,000 policies in effect across the state. But if the Trump administration changes federal rules, and there is no change in California law, enrollment in short-term plans is likely to grow. Under these conditions, the Urban Institute projects that over 600,000 Californians would enroll in short-term plans in 2019.
  • Enrollment in short-term plans could contribute to destabilizing Covered California and increasing premiums. Short-term plans are likely to siphon off healthier and younger consumers from Covered California, which would increase premiums for those remaining in the ACA-compliant market.
  • States are taking action. Colorado, Massachusetts, Michigan, New Jersey, New York, and Rhode Island have taken steps to ensure that short-term plans don’t destabilize their individual health insurance markets. A bill is currently pending in the California legislature banning short-term plans altogether.

The full report is available under Related Materials below.

Related Materials

Short-Term, Limited-Duration Insurance and Risks to California’s Insurance Market (PDF)

 

Is it a gag rule after all? A closer look at changes to Title X funding regarding abortion.

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https://www.washingtonpost.com/news/to-your-health/wp/2018/05/23/is-it-a-gag-rule-what-changes-to-family-planning-funds-and-abortion-referrals-might-mean/

The Trump administration has released the language of a proposed rule on federal family planning funding, and abortion rights activists are raising alarm about it.

When health officials revealed Friday that they would be filing a change to which clinics would be eligible for funding, they emphasized that it was not a “gag rule.” Instead, they said they were proposing to strip away a current mandate. It requires organizations that receive Title X funding to counsel women about abortion and provide them with referrals to abortion services. Under the new rules, a provider wouldn’t have to talk about abortion at all.

This was part of a plan that would require “a bright line of physical as well as financial separation” between Title X family planning programs and ones in which abortion is “supported or referred for as a method of family planning.”

“Contrary to recent media reports,” the White House said in a statement that day, “HHS’s proposal does not include the so-called ‘gag rule’ on counseling about abortion.” The statement contrasted the new rule with a Reagan administration policy in 1988 that banned any mention of abortion.

The Department of Health and Human Services declined to make the full proposed rule available last week, but it was posted on the HHS website Tuesday. It’s consistent with the message the administration provided Friday but is more explicit about what can and cannot be said.

Page 119 states that “A Title X project may not perform, promote, refer for, or support, abortion as a method of family planning, nor take any other affirmative action to assist a patient to secure such an abortion.”

The one exception is if a woman “clearly states that she has already decided to have an abortion.” In this situation, a doctor or other provider should provide “a list of licensed, qualified comprehensive health service providers (some, but not all, of which also provide abortion, in addition to comprehensive prenatal care.)”

So is it or isn’t it a “gag rule”?

HHS’s view is that there is a difference between counseling and referrals. Counseling — as long as it is not “directive” or expressing an opinion — is allowed. It stated that referrals for abortion are, “by definition, directive” and, therefore, not allowed under its new interpretation of a 2000 regulation that pregnancy counseling be nondirective.

Planned Parenthood, which serves about 41 percent of the patients who receive services through Title X, and other groups that support abortion rights, beg to differ. On Wednesday, Planned Parenthood started a #NoGagRule campaign that will include a rally in front of the U.S. Capitol at 5:30 p.m.

“This is one of the largest-scale and most dangerous attacks we’ve seen on women’s rights and reproductive health care in this country. This policy is straight out of the Handmaid’s Tale — yet, it’s taking effect in America in 2018,” Dawn Laguens, executive vice president for Planned Parenthood Federation of America, said in a statement that referenced Margaret Atwood’s dystopian novel.

Georgeanne Usova, legislative counsel with the American Civil Liberties Union, said the policy is “putting the health and lives of countless people at risk in service of this administration’s extreme antiabortion agenda.”

Likewise Jenn Conti, a fellow with Physicians for Reproductive Health, said the ” ‘gag rule’ is not only unconscionable, but it undermines medical ethics by allowing health-care professionals to withhold accurate and timely medical information from patients.”

 

 

It Costs $685 Billion a Year to Subsidize U.S. Health Insurance

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https://www.bloomberg.com/news/articles/2018-05-23/it-costs-685-billion-a-year-to-subsidize-u-s-health-insurance

 

It will cost the U.S. government almost $700 billion in subsidies this year help provide Americans under age 65 with health insurance through their jobs or in government-sponsored health programs, according to a report from the nonpartisan Congressional Budget Office.

The subsidies come from four main categories. About $296 billion is federal spending on programs like Medicaid and the Children’s Health Insurance Program, which help insure low-income people. Almost as big are the tax write-offs that employers take for providing coverage to their workers. Medicare-eligible people, such as the disabled, account for $82 billion. Subsidies for Obamacare and for other individual coverage are the smallest segment, at $55 billion.

In total, the subsidies are equivalent to about 3.4 percent of the U.S. gross domestic product.

Financing Americans’ Insurance

In 2018, subsidizing health coverage will cost taxpayers almost $700 billion.

Also known as the Affordable Care Act, Obamacare reduced the number of uninsured, but 29 million people will likely go without health coverage in an average month this year, the CBO said. Thirty-five million Americans could lack coverage by 2028 as rising premiums and the elimination of the individual mandate drive more people to drop coverage.

The subsidies in the Affordable Care Act are designed to insulate people in the program from premium increases. The CBO projected that monthly premiums for a mid-range plan in the program will increase by 15 percent by 2019, and by about 7 percent annually through 2028.

One reason for the rising premiums is the actions of President Donald Trump. Last year, Trump topped funding for the cost-sharing reduction payments made to insurers under Obamacare to help Americans afford health costs.

The non-payment of those subsidies, less enforcement of a rule requiring people to have insurance and limited competition caused insurers to raise their premiums by about 34 percent in 2018, compared to 2017. That increased the cost of the subsidies to the federal government, according to the CBO.

It’s the Monopolies, Stupid!

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http://www.commonwealthfund.org/publications/blog/2018/may/drug-monopolies-pricing?omnicid=EALERT1410094&mid=henrykotula@yahoo.com

Image result for pharmaceutical monopoly

At the core of the nation’s drug pricing problem is one fundamental fact: Drug companies enjoy government-sanctioned and -enforced monopolies over the supply of many drugs.

These monopolies result from patents awarded under federal law for novel molecules. Patents allow manufacturers to prevent competitors from selling the same drug for 20 years from the time the patent is filed. Given that the process of gaining regulatory approval to market their new drug takes time, research suggests new drugs have, on average, 12 to 13 years of market exclusivity.

Once new drugs are approved by the Food and Drug Administration, the monopolies assured by patents enable pharmaceutical companies to charge any price they choose. They generally pick prices that not only cover their development costs, but also generate profits that exceed those of most other industries: for example, the average profit margin for the 25 largest software companies (which are cited as having the same high R&D investment and low production and distribution costs as pharmaceutical companies) was 13.4 percent in 2015, while the average profit margin for the 25 largest drug companies was 20.1 percent in 2015. Drugmakers are also free to raise prices whenever they want at rates they alone determine.

The existence of patents does not totally prevent competition. Often, other companies introduce drugs that are distinct enough to justify their own separate patents and accomplish the same therapeutic goal. This results in competition that lowers drug prices, but often by not enough to make the medications affordable for many patients. In addition, the makers of patented drugs — for example, Mylan’s EpiPen and the weight-loss drug Suprenza — have developed effective mechanisms to extend the lives of their patents beyond 20 years. These approaches include making minor modifications in the formulations or packaging of drugs that have no clinical significance, as well as paying potential generic competitors not to introduce generic drugs.

That said, patents eventually expire, at which point generic drug companies can manufacture the drug and sell it at a much lower price. But even generic drug competition has been weakened recently by generic drug market monopolies, as these manufacturers have bought up their competition. As a result, the prices of old and familiar drugs have risen dramatically. The price of the cardiac drug isuprel has increased more than sixfold between 2013 and 2015, and the price of the antibiotic doxycycline has soared 90-fold over the same period.

As long as drug companies (or a small group) hold monopoly (or oligopoly) power over potent new therapies, there is no free market solution to lowering drug prices. Only a countervailing nonmarket force of equal strength can bring those prices down. Other western industrial countries, recognizing this, authorize their governments to step in and moderate drug prices for the benefit of their citizenry. Some set prices by fiat, while other negotiate with drug companies. In the latter case, the negotiations are sometimes guided by comparative effectiveness analysis that estimates the value of new drugs to patients. Of course, drug companies are free to walk away from such deals, but they generally choose not to, presumably because they still make money from those sales.

Drug companies say their monopoly earnings are necessary to sustain the research and development that produce new drugs. In effect they are saying that they need to be able to charge the very high prices we now see for patented drugs so they can innovate. This raises the questions of how much money society should allocate toward pharmaceutical innovation and who should decide. Setting those questions aside for the moment, we should be very clear about one thing: As long as pharmaceutical companies have uncontested market power to set prices for many patented and generic drugs, those prices will remain a huge problem for Americans and their elected representatives.

States Take the Lead on Reinsurance to Stabilize the ACA Marketplaces

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http://www.commonwealthfund.org/publications/blog/2018/may/reinsurance-to-stabilize-marketplaces?omnicid=EALERT1408707&mid=henrykotula@yahoo.com

 

Image result for reinsurance

Recent actions by Congress and the Trump administration are likely to disrupt Affordable Care Act (ACA) marketplaces in 2019, leading to higher premiums for individuals and families. These actions include Congress’ termination of financial penalties for failing to obtain health insurance and the administration’s resistance to paying cost-sharing reductions for low-income purchasers of marketplace coverage, its encouragement of the sale of short-term policies and association health plans, and its defunding of advertising and outreach in federally facilitated marketplaces. Recent estimates suggest that there have already been small but significant declines in coverage.

A total collapse of ACA marketplaces is unlikely because of continuing federal subsidies for the purchase of insurance by individuals with incomes below 400 percent of the federal poverty level. But those not eligible for subsidies may face higher premiums in some states, and some may be forced to forgo coverage. Those who remain in the market may be sicker than average, leading to a higher-risk pool and fueling premium increases.

A key way to mitigate the adverse effects of these recent policies is by offering reinsurance, a policy that is garnering bipartisan support at the federal and state levels.

What Is Reinsurance?

Reinsurance was a critical feature of ACA marketplaces in their first three years. The marketplaces were new, and insurers faced considerable uncertainty about the health status of enrollees. The law thus offered insurers some protection against unexpectedly high claims through a reinsurance program. Reinsurance protects insurers by limiting their exposure to very high, unpredictable medical expenses incurred by their members by covering some of those expenses when they exceed a certain threshold. For example, the ACA stipulated that insurers with claims costs that exceeded a threshold amount for a particular individual — $45,000 in 2014 — qualified for reinsurance payments for 100 percent of the excess up to $250,000. The program was financed by fees on both individual and employer plans, including self-insured employers, and was thus deficit neutral. It is estimated that reinsurance reduced average premiums in the marketplaces by as much as 14 percent.

The ACA legislation phased down the reinsurance program over 2014–2016 since it was assumed that as insurers gained more familiarity with enrollees, they could price their products with greater certainty. After the program ended in 2016, premiums rose in 2017 more sharply than they had in prior years, an increase that was partly attributed to the loss of reinsurance.

Industry stakeholders and health policy experts have suggested that reinsurance could stabilize the individual market. Researchers Chrissy Eibner and Jody Liu of RAND estimated that reinstating the reinsurance program could reduce premiums in the marketplaces by 3.9 percent to 19.3 percent in 2020, depending on the generosity of the program. Because lower premiums also reduce what the federal government spends on tax credits, the researchers projected federal deficit savings of $2.9 billion to $13.1 billion. However, the researchers also assume that some of those fees ultimately would be passed on to people enrolled in private plans.

Federal reinsurance programs have appeared in a number of recent Congressional bills. Last year, ACA repeal-and-replace bills included reinsurance programs for the individual market that would be financed directly by the federal government. Senators Susan Collins (R–Maine) and Bill Nelson (D–Fla.) introduced a bill with a similarly structured reinsurance program at the end of 2017. And a recently introduced bill from Senators Jeff Merkley (D–Ore.) and Chris Murphy (D–Conn.) proposing that a Medicare plan be offered through the marketplaces and by employers also includes a reinsurance program.

Some of these proposals would fund reinsurance through upfront federal expenditures, rather than charging fees to insurers. Deficit reductions could be lower under this scenario, but may still be possible because the federal expenditures on reinsurance would be offset by savings on lower tax credit expenditures as premiums fall. However, the RAND researchers find that the cost to taxpayers would be about the same under both approaches, since insurers would likely pass on fees to their customers in the form of higher premiums.

States Take the Lead

In the absence of consensus in Congress on how to strengthen the marketplaces, several states have secured, or are seeking, approval from the federal government to establish state-based reinsurance programs through the ACA’s innovation waiver program. Under the waiver program, states can make changes to their marketplaces as long as they cover at least the same number of people and maintain the same levels of affordability. Reinsurance has been the most common innovation pursued by states.

Alaska, Minnesota, and Oregon have received federal approval to establish reinsurance programs. There are notable differences in their approaches:

  • In Alaska, medical claims for individuals with at least one of 33 high-cost conditions are covered by the Alaska Reinsurance Program. The program was responsible for preventing the state’s last remaining insurer from leaving the individual market in 2017.
  • In Minnesota, the reinsurance program covers 80 percent of claims for individuals up to $250,000 once a $50,000 threshold is passed. For the 2018 plan year, insurers submitted two sets of premiums, one assuming reinsurance and one without it. The rates accounting for reinsurance were approximately 20 percent lower.
  • Oregon’s waiver application sought approval for a program that would reimburse 50 percent of claims between a yet-to-be-established threshold up to $1 million. The U.S. Department of Health and Human Services approved the proposal in October 2017.

Six more states have passed legislation or submitted applications to establish reinsurance programs.

  • On May 9, Maine became the latest state to submit a waiver application to the federal government seeking funding for a state-based reinsurance program. Earlier this year on April 18, Wisconsin also submitted a waiver application for a reinsurance program.
  • New Hampshire and Louisiana are developing similar applications, and New Jersey and Maryland passed legislation in April to establish state-operated reinsurance programs.

Experience with reinsurance programs clearly demonstrates their efficacy in reducing health insurance premiums in the private individual market. Implemented at the federal level, such programs also reduce federal spending and deficits. Though enterprising states are moving forward with these initiatives, a more comprehensive national effort to help private insurers manage unpredictable risks in individual health insurance markets has enduring appeal.

 

 

Red states find there’s no free pass on Medicaid changes

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Red states find there’s no free pass on Medicaid changes from Trump

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Red states are getting a reality check from the Trump administration in just how conservative they can remake their Medicaid programs.

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) rejected a request from Kansas to limit Medicaid eligibility to just three years.

CMS Administrator Seema Verma followed up on the Kansas decision by saying the administration will not allow any states to impose lifetime limits on Medicaid.

“We’ve indicated that we would not approve lifetime limits and I think we’ve made that pretty clear to states,” Verma said last week at a Washington Post event on health care.

The Trump administration has made state innovation a priority and has promised to fast-track Medicaid waivers, especially those that will impose work requirements on beneficiaries.

Four states have been granted permission to do so — Arkansas, Kentucky, Indiana and New Hampshire — and six others have pending waivers.

States have also been allowed to impose lockout periods if beneficiaries can’t meet the work requirements and to charge higher premiums than the Obama administration allowed.

But the decision on lifetime limits marks the first time the administration completely rejected a policy favored by conservatives and shows there is no blank check for red states.

Verma never promised automatic approvals of conservative ideas, though some might have interpreted it that way, according to Jeff Myers, president and CEO of the Medicaid Health Plans of America.

He said it’s becoming clear that what the Trump administration wants is to construct policies that will make Medicaid beneficiaries self-sufficient, but that will not take away their benefits entirely.

Verma has long argued that promoting self-sufficiency is key to any changes states make to Medicaid. In explaining the decision to reject lifetime limits, Verma noted that states only temporarily suspend benefits if work requirements aren’t met.

“An individual may not comply with a requirement around cost-sharing and they could potentially lose coverage. But we want to make sure that there’s a pathway back into the program … if they’re compliant with the requirements,” Verma said last week.

Medicaid experts said officials in Kansas and other red states were mistaken if they thought they could get the Trump administration to approve changes just because they happen to be conservative.

“Contrary to some states’ expectations, there really is a waiver approval process,” said Joe Antos, a health policy expert at the American Enterprise Forum, a conservative think tank.

“Decisions will move more rapidly than they were … [but] that doesn’t mean approvals,” he said.

Matt Salo, executive director of the National Association of Medicaid Directors, said any time there’s a change in administration, states jockey to see what policies they can get approved.

“There’s a lot of pent-up interest in pursuing flexibility and changes that the Obama administration would not entertain, [but] I don’t think anyone thought it was a blank check, do whatever you want,” Salo said.

The administration has yet to make a decision on other conservative wish list policies, such as Wisconsin’s proposal for drug testing Medicaid recipients, and partial Medicaid expansion, which would let states expand coverage for only a fraction of the population and still receive full federal funding under ObamaCare.

Salo said federal officials want to make sure that any waivers they approve will survive the inevitable lawsuits that follow.

“People are pretty savvy … if you’re just going to approve something that gets torn down in the courts, you’re wasting everyone’s time,” Salo said. “The granting of a wish list that gets trounced doesn’t do any good, and even sets the agenda back somewhat. Everyone’s better off if there’s a real rationale.”

CMS recently declined to issue a decision on a request by Arkansas to roll back the eligibility levels for Medicaid beneficiaries. The agency also declined to rule on Kansas’s request to impose work requirements, which experts have speculated could be an implicit rejection of the proposals.

Unlike the other four states that have been approved, Kansas is not a Medicaid expansion state, and the administration has not approved work requirements in any nonexpansion states.

Kansas officials indicated they were still working with federal officials.

“While we will not be moving forward with lifetime caps, we are pleased that the Administration has been supportive of our efforts to include a work requirement in the 1115 waiver. This important provision will help improve outcomes and ensure that Kansans are empowered to achieve self-sufficiency,” Gov. Jeff Colyer (R) said in a statement.