Tag Archives: Medicaid

The Medicaid Agency of the Future: What capabilities and leadership will it need?

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Medicaid’s scale and complexity are unprecedented. State Medicaid leaders will need to innovate if they are to develop the capabilities that will enable them to steer their agencies into the future.

Since its inception in 1965, Medicaid has grown to have an expanded role in state governance—it is usually the first- or second-largest state program. Nationwide, Medicaid agencies manage about $574 billion in annual spending.1In an average-sized state, Medicaid directors are the single largest purchaser in the health sector, overseeing about $10 billion each year in payments to providers (roughly 17% of the state’s economy).2The agencies typically serve nearly one-quarter of their state’s population3and, in our experience, procure the largest IT infrastructure projects in state government.

Recently, demands on state Medicaid agencies have grown. Increasingly, Medicaid agencies are playing a multi-part role, fulfilling their traditional responsibilities (i.e., payer-purchaser, operator) and taking on new ones (i.e., market shaper and innovator). And while they are doing this, the agencies must address an array of competing priorities, as well as uncertainty about future funding levels. To perform well in these new roles, the agencies must develop new, next-generation capabilities so they can address the needs of their state’s citizens—even those not enrolled in Medicaid.

We believe the roles played by state Medicaid agencies will continue to evolve, but the agencies—in conjunction with the state government leaders they work with—can choose their strategic path forward (primarily, the extent to which they want to be market shapers). Those that pursue this path aggressively will be the first of their peers to evolve into a Medicaid Agency of the Future.

As we discuss below, all state Medicaid agencies will need to strengthen their capabilities if they are to meet the demands of the future—an issue that has important implications not only for the agencies themselves but also for state government leaders, managed care organizations (MCOs), local providers, and others. However, agencies focused on becoming market shapers will need to double down on capability building if they want to succeed on their chosen path.4

Trends shaping Medicaid

A number of trends are shaping what Medicaid agencies need to do to prioritize the direction of their efforts.

Spending growth is putting pressure on state budgets. Medicaid is putting continued cost pressure on state budgets. Program spending (including federal and state funding) increased from 20.5% of state budgets in 2008 to 29.0% in 2016.5The continued increase in Medicaid spending could have funding implications for other state programs, such as elementary and higher education, public assistance, and transportation. The cost pressures resulting from Medicaid spending are expected to continue regardless of what, if any, changes are made at the federal level.

Medicaid programs can lead to payment inno­vation. As program costs have risen, Medicaid directors have increasingly tried to slow the medical cost trend. One lever available to them is transitioning from fee-for-service reimbursement to payment innovations that include meaningful levels of provider risk-sharing. New payment models that reward providers for delivering high-quality care at lower cost have been shown to improve care quality and reduce costs by 5% to 10% when rolled out across the full spending base.6In several states, Medicaid programs have led multi-payer efforts to achieve payment inno­vation across the state.7

Medicaid plays an important role as both a payer and a convener. In the aggregate, Medicaid is the country’s largest payer in terms of covered lives and, in many states, is the largest purchaser of healthcare ser­vices.8Thus, Medicaid agencies are uniquely positioned to facilitate change. In addition, the agencies can often bring together multiple stakeholders to help align on improvements that would affect not only Medicaid but also the entire healthcare market.

Recognition of Medicaid members as consumers is increasing. Some Medicaid agencies are beginning to approach Medicaid members as consumers. For example, they are offering members technological tools, such as apps and patient portals, that empower greater decision making (e.g., about choice of provider, care setting, or treatment). If well utilized, these tools can improve member experience and encourage higher-value care.

Awareness of social determinants is rising. Increasingly, states are turning their attention to non-health factors, such as housing, education, and transportation, that influence Medicaid members’ ability to maintain their health and adhere to treatment. Some programs are beginning to address these determinants head on (e.g., by providing housing or transportation vouchers). Experimentation in special needs care is underway. Integrated models typically deliver better quality and cost outcomes. For example, integrated behavioral and physical healthcare approaches for high-needs patients have been shown to reduce emergency department and inpatient visit spending by 10% to 25%.9The successes to date are paving the way for further innovation in other special needs areas.

Analytics is playing an increasing role. Advanced analytics and big data can help Medicaid and other public health officials better understand state needs, design programs, and target interventions to maximize the impact of limited funds. The emergence of new national data-sets, such as the Transformed Medicaid Statistical Information System (T-MSIS, which includes states’ comprehensive claims and enrollment data) and CMS’ online database of state waivers and state plan amendments, may enable states to draw on experiences elsewhere when designing new programs.10

In short, state Medicaid agencies are facing an increasingly complex and difficult set of challenges at a time when the expectations of multiple stakeholders—members, families, and advocates; providers and MCOs; the federal government, state leaders, and other state agencies—are rising. If Medicaid agencies are to address these challenges successfully, the role they play must evolve.

Introducing the Medicaid Agency of the Future

In the future, some state Medicaid agencies may opt to follow the path set by previous state leaders. In other cases, they may want to respond to the trends just discussed by taking the lead in transforming healthcare delivery in their programs and their states. These Agencies of the Future will have to be able to chart a strong strategic direction and execute the activities that follow both efficiently and effectively. To accomplish those goals, they will need to use a data-driven approach to program management, build new capabilities, and improve their organizational health (Exhibit 1).

Agencies that opt to follow a more traditional path would also benefit from strengthening their operational performance and organi­zational health, but the level of improvement needed is lower for them than for the Agencies of the Future. Both sets of agencies, however, will want to prioritize their strategic investments once they have chosen their path forward.

 

Hospital Impact—Medicaid on the chopping block in 2018

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Filling out job application

Medicare and Medicaid have always been a “work in progress,” as they’ve evolved from entitlement programs for the elderly and the poor in the 1960s to the largest health insurers—public or private—in the nation.

Medicaid is the more controversial program of the two, as its original intent was to provide temporary, safety-net health coverage for the poor and not as a permanent entitlement. This issue has been politicized by both parties as of late with little attention paid to the impact that nonclinical determinants—such as genetics, socioeconomics, environment and lifestyle choices—have on healthcare outcomes and life expectancy.

Democrats support expanding Medicaid under the Affordable Care Act to every state for everyone within 138% of the federal poverty level. Republicans favor increasing beneficiary responsibilities to take greater control and responsibility over their own healthcare and are encouraging states to pursue waivers to experiment with different Medicaid models designed to optimize quality, drive down costs and enable beneficiaries to move toward greater economic self-sufficiency.

President Donald Trump’s proposed budget last May recommended $800 billion in Medicaid cuts as well as cuts in nutritional assistance ($192 billion) and welfare programs ($272 billion). With the passage of the Tax Cuts and Jobs Act adding $1 trillion to the federal deficit, Republicans are making cuts to Medicaid a priority for 2018.

The rise of work requirements

Last month, the Trump administration announced that it would grant states the right to impose work requirements for able-bodied Medicaid recipients. Pregnant women, full-time students, primary caretakers of children under 19, disabled adult dependents and frail elderly individuals would be exempt from these requirements.

There are many complex issues that arise from this proposal, including:

  • The likelihood that it will be challenged in federal court (as is already the case in Kentucky)
  • The impact that denial of coverage would have on healthcare costs with elimination of preventive healthcare services, treatment for opioid addiction and job restrictions for those with chronic addictions
  • The requirement that states would bear the burden of job training, child care, transportation to work sites and other administrative costs with limited resources.

Democrats responded that this proposal violates the Medicaid statute as well as the original intent of the state waiver program. They also pointed out that the majority of Medicaid beneficiaries who can work do work, and often carry more than one low-paying service job that does not permit them to afford commercial health insurance coverage.

Many Republican governors support the proposal, as they would like to see a greater number of Medicaid beneficiaries receive health insurance through an employer rather than through the state. Earlier this month, Kentucky became the first state to receive approval to impose job requirements as a part of its Medicaid program, followed in short order by Indiana.

Cost-sharing considerations

Another approach to reducing Medicaid costs is cost-sharing, which is already permitted under federal law. Like the job-requirement proposal, children, pregnant women and others are partially waived from this requirement with lower premiums and cost-sharing limits.

In addition, states may impose higher premiums and cost-sharing limits for the option to purchase brand as opposed to generic prescription drugs and the nonemergency use of emergency departments as determined by a medical screening exam under the Emergency Medical Treatment and Labor Act.

All about the execution

There is no question that the United States cannot sustain the current unfunded liabilities that include Medicaid, Medicare and Social Security. In addition, cuts to the Medicaid program are supported by a significant number of Americans. However, doing this successfully will be complicated by the fact that those receiving this coverage deeply appreciate its benefits and that many studies support the positive economic value of Medicaid expansion.

Imposing work requirements and cost-sharing on Medicaid beneficiaries will only work if the jobs available to them are not minimum-wage service jobs and provide employer-based insurance. Thus, the main question is: Can states invest in the infrastructure necessary to help get their most vulnerable populations on their feet in an economically meaningful way? Or is the intent to merely withhold healthcare services to compensate for federal and state budgets that have spiraled out of control?

 

Senate poised to approve budget redistributing state Medicaid funding

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http://www.tampabay.com/florida-politics/buzz/2018/02/07/senate-poised-to-approve-budget-redistributing-state-medicaid-funding/

 

The Senate proposal, which would funnel away higher state Medicaid payments to hospitals with a large fraction of Medicaid patients, would need to be reconciled with the House’s budget preserving the current policy.

Safety net hospitals in Florida could see their state Medicaid payments decrease by $170 million under a proposal in the budget the state Senate is poised to approve Thursday. The proposal, which would target about $318 million in payments that currently go to 28 hospitals with a higher percentage of Medicaid patients, would funnel those funds into the base rates paid to all hospitals instead.
The reshuffling in the Senate budget would largely affect safety net hospitals, which include public and teaching hospitals, while for-profit hospitals could gain more than $63 million, according to the Safety Net Hospital Alliance of Florida.
Miami’s Jackson Memorial Hospital would lose $59 million, Broward Health would lose about $17 million and Tampa General would lose $14 million, according to Safety Net’s analysis. Nicklaus Children’s Hospital in Miami and Johns Hopkins All Children’s, which each see about 70 percent of patients covered by Medicaid, would lose $10.5 million and $5 million respectively. In contrast, for-profit chain HCA could see its reimbursements rise more than $40 million.
Senate Health and Human Services Appropriations Chairwoman Anitere Flores, R-Miami, said the new system would more fairly distribute funds to all hospitals, which she said also provide charity care like the 28 hospitals that currently meet the 25 percent threshold of Medicaid patients to receive automatic rate enhancements.
“We’re making sure that the dollars actually follow the patient that is being served,” she said.
Flores contended that the new proposal corrects an “arbitrary” formula that set the higher payment rates in past years, and that the hospitals that had been reimbursed at a higher rate would be able to recoup their losses through federal Low Income Pool funding, which reimburses hospitals for charity care serving the uninsured.
But Lindy Kennedy, vice president of the Safety Net Alliance, told the Senate Democratic Caucus that the policy is needed because Medicaid rates do not cover the cost of care. Those 28 hospitals, which largely comprise public or not-for-profit private institutions in the state, lose proportionately more money because a larger slice of their patients are covered by Medicaid, she said.
“If Medicaid would pay these costs and if didn’t go into the red for every Medicaid patient we had, we wouldn’t need this policy,” she said. “This puts us back to status quo.”
“These hospitals cannot afford this type of cut,” she added.

Lidia Amoretti, a spokeswoman for Jackson Health System, called the Senate’s plan “alarming,” though she added “it is still early in the process.”

“We trust that the Miami-Dade delegation will fight fiercely – as it always does – to protect the people who rely upon Jackson for world-class care,” she said in a statement. 
Sen. Jose Javier Rodriguez, D-Miami, proposed an amendment that would revert the Senate proposal to match the House’s version this year, though it was rejected on the floor.
Tony Carvalho, president of the Safety Net Hospital Alliance, said that the Senate plan would also cut $94 million from three of the four largest teaching hospitals — UF’s Shands in Gainesville, Jackson Memorial and Tampa General.
“All hospitals lose money, and I appreciate that, but the average annual margin for the three largest teaching hospitals is $57 million over the last five years…for the operation of in-patient out-patient services in hospitals,” he said. “The Senate bill would cut them $95 million — that’s $30 million more than their operating margin in the last five years.”
By contrast, he said, HCA makes an operating margin, on average over the last five years, of $868 million per year.
Carvalho said one of the biggest cuts to hospitals are employees and this would be “damaging some of your premier medical institutions.”
“Their slogan is the money follows the patient,” he said. “That would be pertinent if all hospitals were paid their cost of care or all hospitals did the same percentage of Medicaid. That’s not the case. If you are going to pay hospitals way below the cost of care, our position is — and it has been the legislative position for years — is that you make a special adjustment when one of four of their patients are in the Medicaid pool.”
The Senate is expected to pass its budget tomorrow, setting up a clash with the House, whose version of the budget preserves the higher reimbursement system. The Senate’s plan also includes $130 million in nursing home funding, which differs from the House plan.

U.S. Pays Billions for ‘Assisted Living,’ but What Does It Get?

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WASHINGTON — Federal investigators say they have found huge gaps in the regulation of assisted living facilities, a shortfall that they say has potentially jeopardized the care of hundreds of thousands of people served by the booming industry.

The federal government lacks even basic information about the quality of assisted living services provided to low-income people on Medicaid, the Government Accountability Office, a nonpartisan investigative arm of Congress, says in a report to be issued on Sunday.

Billions of dollars in government spending is flowing to the industry even as it operates under a patchwork of vague standards and limited supervision by federal and state authorities. States reported spending more than $10 billion a year in federal and state funds for assisted living services for more than 330,000 Medicaid beneficiaries, an average of more than $30,000 a person, the Government Accountability Office found in a survey of states.

States are supposed to keep track of cases involving the abuse, neglect, exploitation or unexplained death of Medicaid beneficiaries in assisted living facilities. But, the report said, more than half of the states were unable to provide information on the number or nature of such cases.

Just 22 states were able to provide data on “critical incidents — cases of potential or actual harm.” In one year, those states reported a total of more than 22,900 incidents, including the physical, emotional or sexual abuse of residents.

Many of those people are “particularly vulnerable,” the report said, like older adults and people with physical or intellectual disabilities. More than a third of residents are believed to have Alzheimer’s or other forms of dementia.

The report provides the most detailed look to date at the role of assisted living in Medicaid, one of the nation’s largest health care programs. Titled “Improved Federal Oversight of Beneficiary Health and Welfare Is Needed,” it grew out of a two-year study requested by a bipartisan group of four senators.

Assisted living communities are intended to be a bridge between living at home and living in a nursing home. Residents can live in apartments or houses, with a high degree of independence, but can still receive help managing their medications and performing daily activities like bathing, dressing and eating.

Nothing in the report disputes the fact that some assisted living facilities provide high-quality, compassionate care.

The National Center for Assisted Living, a trade group for providers, said states already had “a robust oversight system” to ensure proper care for residents. In the last two years, it said, several states, including California, Oregon, Rhode Island and Virginia, have adopted laws to enhance licensing requirements and penalties for poor performance.

But the new report casts a harsh light on federal oversight, concluding that the Centers for Medicare and Medicaid Services has provided “unclear guidance” to states and done little to monitor their use of federal money for assisted living.

As a result, it said, the federal health care agency “cannot ensure states are meeting their commitments to protect the health and welfare of Medicaid beneficiaries receiving assisted living services, potentially jeopardizing their care.”

Congress has not established standards for assisted living facilities comparable to those for nursing homes. In 1987, Congress adopted a law that strengthened the protection of nursing home residents’ rights, imposed dozens of new requirements on homes and specified the services they must provide.

But assisted living facilities have largely escaped such scrutiny even though the Government Accountability Office says the demand for their services is likely to increase because of the aging of the population and increased life expectancy.

That potential has attracted investors. “Don’t miss out on the largest market growth in a generation!” says the website of an Arizona company, which adds that “residential assisted living is the explosive investment opportunity for the next 25 years.”

Carolyn Matthews, a spokeswoman for the company, the Residential Assisted Living Academy, said: “Unfortunately, there has been elderly abuse in this business. We are trying to change the industry so the elderly have better quality care and we are not warehousing them.”

The government report was requested by Senator Susan Collins of Maine, a Republican who is the chairwoman of the Special Committee on Aging; Senator Orrin G. Hatch of Utah, a Republican who is the chairman of the Finance Committee; and two Democratic senators, Claire McCaskill of Missouri and Elizabeth Warren of Massachusetts.

The Trump administration agreed with the auditors’ recommendation that federal officials should clarify the requirement for states to report on the abuse or neglect of people in assisted living facilities. The administration said it was studying whether additional reporting requirements might be needed.

“Although the federal government has comprehensive information on nursing homes providing Medicaid services, not much is known about Medicaid beneficiaries in assisted living facilities,” the report said.

Assisted living was not part of the original Medicaid program, but many states now cover it under waivers intended to encourage “home and community-based services” as an alternative to nursing homes and other institutions.

The report said that assisted living could potentially save money for Medicaid because it generally cost less than nursing home care. Under the most common type of waiver, Medicaid covers assisted living only for people who would be eligible for “an institutional level of care,” in a nursing home or hospital.

 

 

No Car, No Care? Medicaid Transportation At Risk

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No Car, No Care? Medicaid Transportation At Risk

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For over 50 years, the program for the poor and sick has been required to ferry certain clients to and from medical appointments. Though California is not among the states out to cut this service, it could feel the pinch if the feds slash Medicaid funding overall.

This  special series examines the reach and the role of Medicaid, the federal-state program that began as a medical program for the poor but now provides a wide variety of services for a large swath of America.

EVERETT, Wash. — Unable to walk or talk, barely able to see or hear, 5-year-old Maddie Holt waits in her wheelchair for a ride to the hospital.

The 27-pound girl is dressed in polka-dot pants and a flowered shirt for the trip, plus a red headband with a sparkly bow, two wispy blond ponytails poking out on top.

Her parents can’t drive her. They both have disabling vision problems; and, besides, they can’t afford a car. When Maddie was born in 2012 with the rare and usually fatal genetic condition called Zellweger syndrome, Meagan and Brandon Holt, then in their early 20s, were plunged into a world of overwhelming need — and profound poverty.

“We lost everything when Maddie got sick,” said Meagan Holt, now 27.

Multiple times each month, Maddie sees a team of specialists at Seattle Children’s Hospital who treat her for the condition that has left her nearly blind and deaf, with frequent seizures and life-threatening liver problems.

The only way Maddie can make the trip, more than an hour each way, is through a service provided by Medicaid, the nation’s health insurance program started more than 50 years ago as a safety net for the poor.

Called non-emergency medical transportation, or NEMT, the benefit is as old as Medicaid itself. From its inception, in 1966, Medicaid has been required to transport people to and from such medical services as mental health counseling sessions, substance abuse treatment, dialysis, physical therapy, adult day care and, in Maddie’s case, visits to specialists.

“This is so important,” said Holt. “Now that she’s older and more disabled, it’s crucial.”

More than 1 in 5 Americans, about 74 million people, now rely on Medicaid to pay for their health care. In California, one-third of the population — about 13.5 million people — are enrolled in the state’s Medicaid program, called Medi-Cal.

Nationally, the numbers have grown dramatically since the program expanded in California and 31 other states, plus the District of Columbia, to cover prescription drugs, health screening for children, breast and cervical cancer treatment and nursing home care.

With a Republican administration vowing to trim Medicaid, Kaiser Health News is examining how the U.S. has evolved into a “Medicaid Nation,” where millions of Americans rely on the program, directly and indirectly, often unknowingly.Medicaid’s role in transportation is a telling example. Included in the NEMT coverage are nearly 104 million trips each year at a cost of nearly $3 billion, according to a 2013 estimate, the most recent, by Texas researchers.

Citing runaway costs and a focus on patients taking responsibility for their health, Republicans have vowed to roll back the benefits, cut federal funding and give states more power to eliminate services they consider unaffordable.

Already, states have wide leeway in how to provide and pay for the transportation.

In California, Medi-Cal members in managed care get transportation through their health plans, while fee-for-service enrollees can arrange for the service through their counties, said Amber Christ, a Los Angeles-based staff attorney for Justice in Aging, a legal advocacy group.

Medi-Cal transportation is a “lifeline” for the low-income seniors she works with, she said.

“Most of them cannot afford a car, or if they have a car they can’t afford to keep gas in that car, or they can’t use public transportation,” she said. “Medicaid transportation is the only way they are going to their doctor appointments.”

California has not proposed cutting this service, but should the federal government slash Medicaid funding overall, “you could see where states would feel the pressure to make cuts, and this might be one of the first places to do that,” Christ said.

Proponents of limiting NEMT say the strategy will cut escalating costs and more closely mirror private insurance benefits, which typically don’t include transportation.

They also contend that changes will help curb what government investigators in 2016 warned is “a high risk for fraud and abuse” in the program. In recent years, the Centers for Medicare & Medicaid Services (CMS) reported that a Massachusetts NEMT provider was jailed and fined more than $475,000 for billing for rides attributed to dead people.

Last year, a public interest law office in Los Angeles sued a company contracted to provide transportation to Medicaid enrollees in California and other states for allegedly failing to provide “safe, reliable and timely transportation” to fragile patients — some with brain injuries and amputations. That caused them to miss appointments, the suit alleges.

Two ambulance programs in Connecticut paid almost $600,000 to settle claims that they provided transportation for dialysis patients who didn’t have medical needs for ambulance transportation. And the mother of a Medicaid patient who was authorized to transport her child for treatment billed Medicaid for trips that didn’t take place. She was sentenced to 30 days in jail and ordered to pay $21,500.

Last March, Rep. Susan Brooks, an Indiana Republican, introduced a resolutionthat would have revoked the federal requirement to provide NEMT in an effort to provide states with “flexibility.” That effort stalled.

Another Republican proposal in 2017 would have reversed the Affordable Care Act’s Medicaid expansion and reduced federal funding for the NEMT program. It failed, but other efforts by individual states still stand.

Former Health and Human Services Secretary Tom Price and CMS Administrator Seema Verma encouraged the nation’s governors to consider NEMT waivers, among other actions, in a March letter to them.

“We wish to empower all states to advance the next wave of innovative solutions to Medicaid challenges,” they wrote. The Trump administration has used state waivers to bypass or unravel a number of the Obama administration’s more expansive health policies, and has granted some states’ requests.

At least three states, Iowa, Indiana and Kentucky, have received federal waivers — and extensions —allowing them to cut Medicaid transportation services. Massachusetts has a waiver pending.

Critics of the cuts worry the trend will accelerate, leaving poor and sick patients with no way to get to medical appointments.

“I wouldn’t be surprised to see more of these waivers in the pipeline,” said Joan Alker, executive director of the Georgetown University Center for Children and Families.

Because medical transportation isn’t typically covered by the commercial insurance plans most Americans use, it’s unfamiliar to many people and could be seen as unnecessary, said Eliot Fishman, senior director of health policy for Families USA, a nonprofit, nonpartisan consumer health advocacy group.

Formerly a Medicaid official in the federal government, Fishman called the transportation program “vital” not only for children with severe disabilities, but also for non-elderly, low-income adults.

CMS released results of a 2014 survey of Medicaid users, which found that lack of transportation was the third-greatest barrier to care for adults with disabilities, with 12.2 percent of those patients reporting they couldn’t get a ride to a doctor’s office.

“This is not something to be trifled with lightly,” Fishman said. “We’re talking about a lifesaving aspect of the Medicaid program.”

About 3.6 million Americans miss or delay non-emergency medical care each year because of transportation problems, according to a 2005 study published by the National Academy of Sciences.

That same study analyzed costs for providing NEMT to patients facing 12 common medical conditions and found that providing additional transportation is cost-effective. For four of those conditions — prenatal care, asthma, heart disease and diabetes — medical transportation saved money when the total costs for both transportation and health care were tallied.

Medicaid is required to provide NEMT services using the most appropriate and least costly form of transportation, whether that’s taxis, vans or public transit.

Most states rely on NEMT brokers or managed-care organizations to administer the transportation services. Other states run the service directly, paying providers on a per-ride basis, while some use local ride services and pay independent taxi firms to shuttle patients.

Proponents of revamping NEMT note that disabled children like Maddie and other people with serious disabilities are in little danger of losing services. In Iowa and Indiana, Medicaid transportation remains available to several groups of patients, including those classified as “medically frail,” though the definition of who qualifies can vary widely.

In addition, one managed-care provider, Anthem, continues to transport Indiana Medicaid patients, despite the waiver that was first enacted in 2007.

Still, Medicaid clients like Fallon Kunz, 29, of Mishawaka, Ind., are often stuck. Kunz, who has cerebral palsy, migraine headaches and chronic pain, uses a power wheelchair. When she was a child, she qualified for door-to-door service to medical appointments, she said.

Today, she lives with her father, whose home is outside the route of a Medicaid transit van. Getting to and from medical appointments for her chronic condition is a constant struggle, she said. Taxis are too expensive: $35 each way for a wheelchair-enabled cab.

“The only way I can get rides to and from my doctor’s appointment is to ride the 2 miles in my wheelchair, despite all kinds of weather, from my home, across the bridge, to the grocery store,” she said. “Right outside the grocery store is the bus stop. I can catch the regular bus there.”

Sometimes, she’s in too much pain or the Indiana weather — warm and humid in the summer, frigid and windy in the winter — is too much to battle and she skips the appointment.

“Today I didn’t go because it was too cold and my legs hurt too much,” she said on a December Tuesday. “I didn’t feel like getting blown off the sidewalk.”

In Maddie Holt’s case, she was shuttled to Seattle Children’s on a rainy Tuesday morning in a medical van driven by Donavan Dunn, a 47-year-old former big-rig trucker. He works for Northwest Transport, one of several regional brokers that manage NEMT services for Washington state.

Dunn said he received special training to transport patients like Maddie, who is loaded onto a motorized platform, wheelchair and all, into the van and then carefully strapped in.

“I have to drive different,” said Dunn. “I have to watch my corners, watch my starts, watch my stops. It’s always in the back of my mind that I have somebody on board that’s fragile.”

We’re talking about a lifesaving aspect of the Medicaid program.

Eliot Fishman, senior director of health policy for Families USA

The transportation service can be used only for medical visits to the specialists who treat Maddie’s condition, which is caused by mutations in any one of at least 12 genes. If Meagan Holt needs to pick up prescriptions or get groceries, she leaves Maddie and a second daughter, Olivia, 3, at home with their dad and takes the bus or walks to her destinations.

Caring for a severely disabled child is not the life she expected, Meagan Holt said, but she cherishes time with Maddie, who has learned to communicate through tactile sign language spelled into her hand.

“She knows about 100 words. She knows the alphabet,” Meagan said. “She likes Disney princesses. She loves ‘Frozen.’”

Maddie is one of hundreds of NEMT-eligible children transported to Seattle Children’s each month. Last September, for instance, more than 1,300 clients made more than 3,600 trips at a cost of more than $203,000, according to the Washington Health Care Authority, which oversees the state’s Medicaid program called Apple Health.

The need is so great, in fact, that the hospital created a transportation will-call desk to help organize the comings and goings.

“When we realized how much transportation is a barrier to getting to your appointment, we decided to do something about it,” said Julie Povick, manager of international exchanges and guest services at Seattle Children’s.

“The majority of our patients are in survival mode,” Povick added. “You need a lot of handholding.”

But Verma, the architect of Indiana’s Medicaid overhaul plan, has suggested that too much handholding might be “counterproductive” for patients — and bad for the country.

In a 2016 Health Affairs essay, Verma noted that early analysis of the effects of curtailing NEMT in Indiana showed that more Medicaid patients with access to the program said transportation was a primary reason for missed appointments than did members without access.

“Moreover, 90 percent of [Healthy Indiana Plan] members report having their own transportation or the ability to rely on family and friends for transportation to health care appointments,” she wrote.

But Marsha Simon, a Washington, D.C., health policy consultant who has tracked NEMT for years, said Medicaid is the option of last resort. People who are able to get rides on their own already do.

“If 90 percent can and 10 percent can’t, what about the 10 percent?” Simon said.

It’s a question that haunts Kunz every day.

“I’m a college student, I have a cat,” said Kunz, who is studying psychology online at Southern New Hampshire University. “I’m just a regular human trying to do things, and the inaccessibility in this area is ridiculous.”

 

How Trump may end up expanding Medicaid, whether he means to or not

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Republican lawmakers in a half-dozen states are launching fresh efforts to expand Medicaid, the nation’s health insurance program for the poor, as party holdouts who had blocked the expansion say they’re now open to it because of Trump administration guidelines allowing states to impose new requirements that program recipients work to get benefits.

In Utah, a Republican legislator working with the GOP governor says he hopes to pass a Medicaid expansion plan with work requirements within the year. In Idaho, a conservative lawmaker who steadfastly opposed Medicaid expansion in the past says the new requirements make him more open to the idea. And in Wyoming, a Republican senator who previously opposed expansion — a key part of President Barack Obama’s health-care law — says he’s ready to take another look at fellow Republicans’ expansion efforts in his state.

Moderate Republicans in North Carolina, Virginia and Kansas are similarly renewing calls to take up Medicaid expansion, though it’s unclear if there will be quite enough conservative support or whether Democrats would consider voting in favor of work requirements.

If successful, though, the efforts could make hundreds of thousands of Americans newly eligible for health coverage, while also opening the door to Medicaid changes that could kick some current beneficiaries out of the program and reduce its benefits to recipients — broadening the program’s reach into red states but with a decidedly conservative bent.

The arguments for and against Medicaid work requirements

The Trump administration is calling Medicaid work requirements a positive “incentive” for beneficiaries, but critics say they’re a harmful double standard.

“All of a sudden, we’re seeing some flexibility that allows us to do it our way, and that gives it a much better chance,” said Wyoming state Sen. Ogden Driskill, a Republican who helped defeat Medicaid expansion in a close vote in 2015. “Without the heavy hand of the government forcing it down our throats, many of us will take a much deeper look at it.”

The Trump administration earlier this month said states could apply to add work requirements to their state Medicaid programs, a first in the program’s history. Ten states have already filed requests for such waivers, and the Trump administration has approved a Kentucky plan to add work requirements and premiums to its program.

The new Trump administration rules may also shake up the balance of power in state-level struggles over Medicaid expansion. Thirty-two states and the District have expanded Medicaid since the Affordable Care Act was enacted, giving health care to approximately 13 million additional people. (Maine voters approved a Medicaid expansion in a November ballot referendum, but it has not yet taken effect.)

The other 17 states are overwhelmingly GOP-dominated. In many, Democrats and some moderate Republicans repeatedly have attempted expansions, hoping to take advantage of federal funding available to provide health insurance for low-income patients. But they’ve seen their efforts thwarted by conservative lawmakers and governors, who argue that expansion would give health care to “able-bodied” Americans and explode state budgets.

Now, moderate Republicans hope to win over their conservative colleagues by packaging the expansion with work requirements or other limits on who is eligible for the program, under what circumstances and for how long.

Their chances of success vary widely depending on the state. In Utah, a Republican lawmaker who has opposed a more generous Medicaid expansion is working with a supportive governor and leaders in the state’s House and Senate on a version that would include work requirements.

Under the new rules, “we think that there may be a window of opportunity to revisit the idea of Medicaid expansion,” Utah Gov. Gary R. Herbert (R) said in a statement to The Washington Post. Utah has 46,000 residents who could gain insurance under Medicaid expansion, according to the Kaiser Family Foundation, although the plans being discussed would probably cover a lower number.

Utah state Rep. Robert M. Spendlove (R) is spearheading a plan to expand Medicaid that would impose work requirements on some residents. Spendlove has wanted to craft this kind of package for years, but says he was told by Obama administration officials that the federal government would stop an expansion proposal that included work requirements.

To make the changes, states would need a waiver from the Trump administration’s Department of Health and Human Services. For the first time, that option is available.

“I’m not Captain Ahab; I didn’t see the point in pursuing an expansion bill that wasn’t going to get approved,” said Utah’s Spendlove, adding that he is working with leadership in the state House and Senate on his proposal. “The importance of the Trump administration’s willingness to give states flexibility to manage their programs can’t be overstated.”

Kansas in 2017 came within three votes of overriding outgoing GOP Gov. Sam Brownback’s veto of a Medicaid expansion plan. Moderate Republicans are hoping work requirements would be enough to get the proposal over the finish line, but it’s unclear if Brownback’s replacement, Republican Jeff Colyer, would support a deal. “This gives us a great opportunity and something to run with,” said Republican state Sen. Barbara Bollier, who has tried pushing conservatives in her state to accept Medicaid expansion.

The Affordable Care Act sought to extend Medicaid to every American living on less than 133 percent of the federal poverty line, implementing a national standard to replace a system in which each state sets its own eligibility threshold. But the Supreme Court struck down that portion of the law, allowing states to decline the extension.

As a result, millions of residents in holdout states fall in the “Medicaid gap.” Their incomes are too high to qualify for Medicaid, but they make too little to meet the minimum threshold for federal insurance subsidies to help them buy private health insurance policies on Obamacare’s exchanges.

“It was a huge roadblock that we did not have the ability to get a waiver for work requirements,” said Idaho state Sen. Marv Hagedorn (R), who said he will talk with colleagues about potential vehicles for expansion. “I’m very optimistic now that the administration has done a 180 on that. We’ll see if we can make something happen for people we have in the gap population.”

In states where lawmakers have repeatedly battled over Medicaid, the proposals face an uphill climb.

In Virginia, where Democrats picked up more than a dozen seats in elections last fall and Republicans hold only a two-seat advantage in the state House and in the Senate, a moderate Republican is seeking a bipartisan deal to pair expansion with work requirements. But a spokesman for new Virginia Gov. Ralph Northam, a Democrat, said the governor does not support work requirements and that “very initial” conversations about expansion are ongoingwith GOP lawmakers about Medicaid expansion in 2018.

The odds may be even longer in North Carolina, where moderates are pushing to pair expansion with work requirements but even proponents are skeptical the legislature’s conservative bloc can be won over. Roy Cooper, the state’s Democratic governor, is “pleased that there is some movement” on Medicaid expansion, said spokeswoman Sadie Weiner, though she added that Cooper has concerns about work requirements.

Many Democrats share those concerns. While they’ve long sought expansion, the deals being pushed would require them to accept rules they say will cost thousands of poor Americans their insurance. Republican-led states ranging from Arizona to Indiana are asking for a range of changes aimed at reducing the generosity of the program, including new fees for emergency-room use, premium payments for the poor, and the loss of coverage for those who miss payments.

“Expanding does create the opportunity to cover more people, but if it’s done with things like work requirements, premiums and other similar policies we know reduce coverage, the gains won’t be as large,” said MaryBeth Musumeci, a Medicaid expert at Kaiser.

In other states, expanding Medicaid remains a non-starter for conservatives. Georgia Gov. Nathan Deal and South Dakota Gov. Dennis Daugaard, both Republicans, said through spokesmen that Medicaid expansion would not be on the table in their states.

“There will be state legislators who were previously skeptical of Medicaid expansion, but who now think they can get behind it,” said Akash Chougule, director of Americans for Prosperity, a right-leaning political advocacy group affiliated with the Koch brothers. “But for us, the fact remains that expanding eligibility will massively increase spending costs. That might be blunted a little bit by a work requirement, but we will continue to resist those calls to expand.”

 

Here’s how states are trying to overhaul Medicaid — without Congress

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http://money.cnn.com/2018/01/18/news/economy/medicaid-state-waiver-requirements/index.html

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Work requirements are only the beginning.

Mandating Medicaid recipients work in order to receive benefits is in the spotlight right now, but states are seeking to make a host of other changes to their programs. These include requiring enrollees to pay premiums, limiting the time they can receive benefits, testing them for drugs and locking them out if they fail to keep up with the paperwork.

Many provisions would apply to working age, non-disabled adults who gained coverage under the Affordable Care Act’s Medicaid expansion. But several states also would require some who qualify under traditional Medicaid — very low-income parents, mainly — to meet these new rules.

Trump administration and state officials say these measures will help people gain independence and prepare them to purchase health insurance on their own. Critics, however, argue states are putting additional hurdles in place to winnow down their rolls.

“The practical impact of all these proposals is that it will knock people off of coverage,” said Patricia Boozang, a managing director at Manatt Health Solutions, a consulting firm.

Republicans have long wanted to overhaul the 53-year-old Medicaid program, which covers nearly 75 million mainly low-income children, parents, elderly and disabled Americans. The broadening of Medicaid to low-income adults under Obamacare — roughly 11 million have gained coverage under the health reform law’s Medicaid expansion provision — has further spurred GOP efforts.

Congress attempted last year to revamp the safety net program, hoping to sharply curtail federal support and turn more control over to the states. Studies showed that millions would lose coverage, helping to sink the measure in the Senate.

States, however, are undeterred. They are ramping up efforts to customize their Medicaid programs through the federal waiver process.

States have long had this power, but the Obama administration rejected any waivers with work requirements and only sparingly granted requests to tighten eligibility. Many of the states that used waivers tied provider payments to performance goals or expanded mental health and substance abuse services and eligibility, for instance. A few turned to waivers to implement alternative Medicaid expansion models that include charging premiums or enrolling recipients in private insurance and covering the premiums, for example.

Indiana, for example, broke new ground in 2015 by getting permission to levy premiums on some traditional Medicaid enrollees, such as very low-income parents, and to lock out expansion recipients above the poverty line for six months if they don’t keep up with their payments.

But the Trump administration has taken a different approach. Seema Verma, who leads the Centers for Medicare & Medicaid Services, sent a letter to governors hours after she was confirmed in March asking them to file waivers that promote a path to self-sufficiency. At least 10 states have responded with waivers that include work requirements and a host of other provisions. Last week, CMS granted Kentucky’s waiver to implement work requirements, marking the first time ever a state can mandate recipients work for their benefits.

Kentucky also can start charging its Medicaid enrollees monthly premiums ranging from $1 to $15, depending on income, and suspend some of those who fall behind on payments. The state will also provide recipients with a high-deductible health savings account, which it will fund, and offer incentives to purchase additional benefits, such as dental and vision coverage.

And the state can lock recipients out of the program for up to six months if they don’t renew their paperwork on time or promptly report changes in income that could affect their eligibility — the first time the federal government has granted such a request.

All told, Kentucky is expecting about 95,000 fewer people to be in its Medicaid program by the end of its five-year waiver period.

Kentucky joins Indiana, Michigan, Arizona, Montana and Iowa in gaining permission to charge premiums. However, states such as Maine and Wisconsin — that didn’t expand Medicaid — are also looking to levy premiums on certain enrollees, primarily low-income parents or childless adults.

Wisconsin also wants to implement additional changes, including drug testing and a 48-month time limit, after which the recipient loses coverage for six months. Months during which the enrollee works or participates in training programs wouldn’t count toward the limit. Utah, meanwhile, wants to impose a lifetime limit on coverage of 60 months. Arizona, Kansas and Maine also want to set caps on the length of time residents can be on Medicaid.

Other states want to reduce the income threshold for Medicaid expansion eligibility. Arkansas and Massachusetts have asked to cover adults only up to 100% of the poverty level, or roughly $24,600 for a family of four, rather than 138%, but the states would still get the enhanced federal match. Those who would fall off would be able to sign up for subsidized policies on the Obamacare exchanges, though consumer advocates say that coverage would be too pricey for most low-income Americans.

Each of these provisions is complicated and having to comply with multiple requirements could prove too much for some recipients, said MaryBeth Musumeci, an associate director at the Program on Medicaid and the Uninsured at the Kaiser Family Foundation.

“There’s a very real risk that eligible people can lose coverage,” she said.

Top 10 challenges for healthcare executives in 2018

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Understanding the Intersection of Medicaid and Work

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https://www.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work/?utm_campaign=KFF-2018-The-Latest&utm_source=hs_email&utm_medium=email&utm_content=59811229&_hsenc=p2ANqtz–JERFINvucriGGpU1rflJEeJxuQPVDm8Wxcl7b-PGXeAoVUch8Oz-J5zdRyTzl09wIqr9zHKJO6Lrp-P6xvIdaGh3oKQ&_hsmi=59811229

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Medicaid is the nation’s public health insurance program for people with low incomes. Overall, the Medicaid program covers one in five Americans, including many with complex and costly needs for care. Historically, nonelderly adults without disabilities accounted for a small share of Medicaid enrollees; however, the Affordable Care Act (ACA) expanded coverage to nonelderly adults with income up to 138% FPL, or $16,642 per year for an individual in 2017. As of December 2017, 32 states have implemented the ACA Medicaid expansion.1 By design, the expansion extended coverage to the working poor (both parents and childless adults), most of whom do not otherwise have access to affordable coverage. While many have gained coverage under the expansion, the majority of Medicaid enrollees are still the “traditional” populations of children, people with disabilities, and the elderly.

Some states and the Trump administration have stated that the ACA Medicaid expansion targets “able-bodied” adults and seek to make Medicaid eligibility contingent on work. Under current law, states cannot impose a work requirement as a condition of Medicaid eligibility, but some states are seeking waiver authority to do so.  These types of waiver requests were denied by the Obama administration, but the Trump administration has indicated a willingness to approve such waivers. This issue brief provides data on the work status of the nearly 25 million non-elderly adults without SSI enrolled in Medicaid (referred to as “Medicaid adults” throughout this brief) to understand the potential implications of work requirement proposals in Medicaid.  Key takeaways include the following:

  • Among Medicaid adults (including parents and childless adults — the group targeted by the Medicaid expansion), nearly 8 in 10 live in working families, and a majority are working themselves. Nearly half of working Medicaid enrollees are employed by small firms, and many work in industries with low employer-sponsored insurance offer rates.
  • Among the adult Medicaid enrollees who were not working, most report major impediments to their ability to work including illness or disability or care-giving responsibilities.
  • While proponents of work requirements say such provisions aim to promote work for those who are not working, these policies could have negative implications on many who are working or exempt from the requirements. For example, coverage for working or exempt enrollees may be at risk if enrollees face administrative obstacles in verifying their work status or documenting an exemption.

Data Findings

Among nonelderly adults with Medicaid coverage—the group of enrollees most likely to be in the workforce—nearly 8 in 10 live in working families, and a majority are working themselves. Because policies around work requirements would be intended to apply to primarily to nonelderly adults without disabilities, we focus this analysis on adults whose eligibility is not based on receipt of Supplemental Security Income (SSI, see methods box for more detail). Data show that among the nearly 25 million non-SSI adults (ages 19-64) enrolled in Medicaid in 2016, 6 in 10 (60%) are working themselves (Figure 1). A larger share, nearly 8 in 10 (79%), are in families with at least one worker, with nearly two-thirds (64%) with a full-time worker and another 14% with a part-time worker; one of the adults in such families may not work, often due to caregiving or other responsibilities.

Because states that expanded Medicaid under the ACA cover adults with family incomes at higher levels than those that did not, adults in Medicaid expansion states are more likely to be in working families or working themselves than those in non-expansion states (Table 1). Adults who are younger, male, Hispanic or Asian were more likely to be working than those who are older, female, or White, Black, or American Indian, respectively (Figure 2 and Table 2). Not surprisingly, adults with more education or better health were more likely to work than others (Figure 3 and Table 2). Perhaps reflecting job market conditions, those living in the South were less likely to work than those in other areas, though similar rates of enrollees in urban and rural areas were working (Table 2). 

Most Medicaid enrollees who work are working full-time for the full year, but their annual incomes are still low enough to qualify for Medicaid. Among adult Medicaid enrollees who work, the majority (51%) worked full-time (at least 35 hours per week) for the entire year (at least 50 weeks during the year) (Table 3).2Most of those who work for only part of the year still work for the majority of the year (26 weeks or more). By definition (that is, in order to meet Medicaid eligibility criteria), these individuals are working low-wage jobs. For example, an individual working full-time (40 hours/week) for the full year (52 weeks) at the federal minimum wage would earn an annual salary of just over $15,000 a year, or about 125% of poverty, below the 138% FPL maximum targeted by the ACA Medicaid expansion.

Many Medicaid enrollees working part-time face impediments to finding full-time work.  Among adult Medicaid enrollees who work part-time, many cite economic reasons such as inability to find full-time work (10%) or slack business conditions (11%) as the reason they work part-time versus full-time. Other major reasons are attendance at school (14%) or other family obligations (14%).

Nearly half of working adult Medicaid enrollees are employed by small firms, and many work in industries with low employer-sponsored coverage offer rates.  Working Medicaid enrollees work in firms and industries that often have limited employer-based coverage options. More than four in ten adult Medicaid enrollees who work are employed by small firms with fewer than 50 employees that will not be subject to ACA penalties for not offering coverage (Figure 4). Further, many firms do not offer coverage to part-time workers. Four in ten Medicaid adults who work are employed in industries with historically low insurance rates, such as the agriculture and service industries. A closer look by specific industry shows that one-third of working Medicaid enrollees are employed in ten industries, with one in 10 enrollees working in restaurants or food services (Figure 5). The Medicaid expansion was designed to reach low-income adults left out of the employer-based system, so, it is not surprising that among those who work, most are unlikely to have access to health coverage through a job.

Among the adult Medicaid enrollees who were not working, most report major impediments to their ability to work.  Even though individuals qualifying for Medicaid on the basis of a disability through SSI were excluded from this group, more than one-third of those not working reported that illness or disability was the primary reason for not working. SSI disability criteria are stringent and can take a long time to establish. People can have physical and/or mental health disabilities that interfere with their ability to work, or to work full-time, without those impairments rising to the SSI level of severity. Other analysis indicates that nearly nine in ten (88%) non-SSI Medicaid adults who reports not working due to illness or disability has a functional limitation, and more than two-thirds (67%) have two or more chronic conditions such as arthritis or asthma.3

30% of non-working Medicaid adults reported that they did not work because they were taking care of home or family; 15% were in school; 6% were looking for work and another 9% were retired (Figure 6). Women accounted for 62% of Medicaid enrollees who were not working in 2016, and parents with children under the age of 6 accounted for 17%.

Policy Implications

Under current law, states cannot impose a work requirement as a condition of Medicaid eligibility. As with other core requirements, the Medicaid statute sets minimum eligibility standards, and states are able to expand coverage beyond these minimum levels. Prior to the ACA, individuals had to meet not only income and resource requirements but also categorical requirements to be eligible for the program. These categorical requirements provided coverage pathways for adults who were pregnant women or parents as well as individuals with disabilities, but other adults without dependent children were largely excluded from coverage. The ACA was designed to fill in gaps in coverage and effectively eliminate these categorical eligibility requirements by establishing a uniform income threshold for most adults. States are not allowed to impose other eligibility requirements that are not in the law.

Some states have proposed tying Medicaid eligibility to work requirements using waiver authority that may be approved by the Trump Administration. Under Section 1115 of the Social Security Act, the Secretary of HHS can waive certain provisions of Medicaid as long as the Secretary determines that the initiative is a “research and demonstration project” that “is likely to assist in promoting the objectives” of the program. The Obama administration did not approve waivers that would condition Medicaid eligibility on work on the grounds that they did not meet the waiver test to further the purpose of the program which is to provide health coverage. The Trump Administration has indicated a willingness to approve waivers to require work.

Research shows that Medicaid expansion has not negatively affected labor market participation, and some research indicates that Medicaid coverage supports work. A comprehensive review of research on the ACA Medicaid expansion found that there is no significant negative effect of the ACA Medicaid expansion on employment rates and other measures of employment and employee behavior (such as transitions from employment to non-employment, the rate of job switches, transitions from full- to part-time employment, labor force participation, and usual hours worked per week). In addition, focus groups, state studies, and anecdotal reports highlight examples of Medicaid coverage supporting work and helping enrollees transition into new careers. For example, individuals have reported that receiving medication for conditions like asthma or rheumatoid arthritis through Medicaid is critical in supporting their ability to work.  Addressing barriers to work requires adequate funding and supports.  While TANF spending on work activities and supports is critiqued by some as too low, it exceeds estimates of state Medicaid program spending to implement a work requirement.

Implementing work requirements can create administrative complexity and put coverage at risk for eligible enrollees who are working or who may be exempt.  States can incur additional costs and demands on staff, and some eligible people could lose coverage.  While work requirements are intended to promote work among those not working, coverage for those who are working could be at risk if beneficiaries face administrative obstacles in verifying their work status or documenting an exemption.  In addition, some individuals who may be exempt may face challenges in navigating an exemption which could also put coverage at risk.

Credit rating agency, researchers give vote of confidence to health insurance sector

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https://www.fiercehealthcare.com/payer/financial-performance-a-m-best-kaiser-family-foundation-insurers?mkt_tok=eyJpIjoiTjJRNU5qUXlZVEJqWmpjNCIsInQiOiJOR2V2bEp4NkdoeVB3VndhZE43TVBjZXdaTGJcLzk1Z3hBd1wvZ05teDMrcjZ5UzJhb0tzUkpQbWlaSmVvUmJFazVDcERmajBTREhCTXJxR3BBaGtoY1MrZlVtQW5xeXRSbFwvYVhPOE44VE9uYUhNZWNnbGtoR3c3S0xHUlp5SlwvS2kifQ%3D%3D&mrkid=959610

Health insurance, pen and stethoscope

Two new reports offer evidence that policy uncertainty aside, the health insurance industry is doing just fine.

In one report, A.M. Best explains why it decided to change its outlook for the health insurance sector from negative to stable. The credit rating agency said the change “reflects a variety of factors that have led to improvement in earnings and risk-adjusted capitalization.”

While insurers have experienced losses in the individual exchange business, this market segment has improved in 2016 and 2017—in part due to consecutive years of high rate increases, a narrowing of provider networks and a stabilizing exchange population, the report said.

A.M. Best also predicted that Congress won’t make repealing and replacing the Affordable Care Act a high priority in 2018. And even if it does, health insurers will have time to make adjustments, since legislative changes won’t take effect for two or more years.

The rating agency’s findings about the individual market echo those of a new report from the Kaiser Family Foundation, which examined insurers’ financial data from the third quarter of 2017.

It found that insurers saw significant improvement in their medical loss ratios, which averaged 81% through the third quarter. Gross margins per member per month in the individual market segment followed a similar pattern, jumping up to $79 per enrollee in the third quarter of 2017 from a recent third-quarter low of $10 in 2015.

One caveat is that KFF’s findings reflect insurer performance only through September—before the Trump administration stopped reimbursing insurers for cost-sharing subsidies. “The loss of these payments during the fourth quarter of 2017 will diminish insurer profits, but nonetheless, insurers are likely to see better financial results in 2017 than they did in earlier years of the ACA marketplaces,” KFF said.

As promising as these observations about the individual market are, A.M. Best pointed out that this market segment is just a small portion of most health insurers’ earnings and revenues. In fact, health plans largely owe their overall profitability to the combined operating results of the employer group, Medicaid and Medicare Advantage lines of business.

Looking ahead, the agency predicted that Medicare and Medicaid business lines will remain profitable for insurers—though margins will likely compress for both. It said the employer group segment will also remain profitable, but noted that membership will continue to be flat.