Manatt on Health Reform: Weekly Highlights - June 2016

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Oregon decides to stick with HealthCare.gov’s enrollment platform; North Dakota re-examines Medicaid expansion as 2017 sunset approaches; and Vermont establishes a special enrollment period for pregnancy.

STATE & FEDERAL MARKETPLACE NEWS:

Arkansas: State Expects to Reject Marketplace Insurers' Proposed Rate Increases

Arkansas's Insurance Commissioner said he expects to deny four insurers' proposed 2017 rate increases for individual policies sold on the Marketplace, saying that at this time there is not “sufficient justification to properly consider” the rate increases. Because the insurers have proposed rate increases—which range from 14.7% to 23.8%—that exceed 10%, they were required to submit justifications to the Insurance Department. The Insurance Department must approve rate proposals by the end of August. More than 73,000 individuals selected private plans on the Marketplace in 2016, along with 240,000 that are enrolled through the State's Medicaid expansion.

Kentucky: State Believes It Has Met CMS Milestones for Transition to HealthCare.gov

Governor Matt Bevin’s (R) administration announced that it has demonstrated adequate progress by CMS’ June 1 deadline to continue transitioning from kynect, the State-based Marketplace, to HealthCare.gov for 2017 open enrollment. The communications director for the State’s Cabinet for Health and Family Services said the State has met criteria set out by CMS, but has not provided details of these milestones. Obama administration officials are reportedly “encouraged by the progress made to date” but note that “significant work remains.” Over 85,000 Kentuckians have enrolled in qualified health plans through Kynect.

Ohio: Insurance Department to Liquidate Co-Op, Enrollees to Switch Coverage Within 60 Days

The Ohio Department of Insurance (ODI) will assume receivership and wind down operations of InHealth Mutual, the State's nonprofit Consumer Operated and Oriented Plan (Co-Op), following an ODI assessment that the Co-Op "would end the year with negative $20 million in assets if it were to continue to operate." InHealth's 22,000 policy holders, who represent approximately 9% of Ohio's Marketplace enrollees, must switch to another policy offered on HealthCare.gov within the next sixty days to retain federal healthcare subsidies.

Oregon: State Will Maintain HealthCare.gov for Marketplace Enrollment Platform

Oregon’s Department of Consumer and Business Services has decided to continue using HealthCare.gov for the State’s Marketplace enrollment platform based on its finding that switching to another state enrollment platform would cost $3 million more than the $31 million it is likely to cost to continue using HealthCare.gov. The Department compared the costs associated with a new HealthCare.gov assessment on qualified health plans (which begins at 1.5% of premiums but may increase to 3% in future years) with three vendors’ proposals to build Oregon’s second State-based Marketplace platform. Additionally, building a State-based Marketplace would require Oregon to hire a minimum of 80 additional staff to support the call center and operate eligibility and enrollment. Oregon began using HealthCare.gov after the original State-based Marketplace, Cover Oregon, was shut down.

CMS to Verify Employee Insurance Availability Through Survey

CMS is conducting an “employer verification survey” requesting information about the lowest-cost health insurance offered to employees, as reported by InsideHealthPolicy.com. The information will be used to ascertain whether employees provided accurate information about their employer-sponsored insurance (ESI) when they applied for HealthCare.gov coverage. For the first time, CMS is also sending some employers notifications this year identifying any employees who claimed that they were not offered minimal, affordable coverage and were therefore eligible for tax subsidies. Employers with more than 50 employees are subject to fines if they fail to offer minimal, affordable coverage to an employee who receives subsidized coverage on a Marketplace, or if they do not offer coverage at all.

STATE MEDICAID ACTIVITY

Iowa: Governor Approves Medicaid Managed Care Oversight

Governor Terry Branstad (R) approved a measure that will require MCOs to publically report information on enrollment, health outcomes, access to care, and program integrity, and will also add an ombudsman to provide assistance related to long-term care. Governor Branstad noted that there will be “nearly 1,000 measurable results tracking the outcomes of Medicaid patients,” making the program one of the “most transparent, outcome-focused and accountable .” Iowa's Medicaid program transitioned to managed care in April after several delays.

Missouri: State Senate Forms a Panel to Reduce State’s Medicaid Prescription Drug Costs

A new State Senate panel aimed at curbing the State’s $1.8 billion in Medicaid prescription drug costs plans to present recommendations to the General Assembly in January 2017. Senator David Sater (R), the chair of the panel, suggested the panel will consider cost-saving measures such as step therapy, preferred drug lists and monthly prescription limits, and believes that some ideas the panel will discuss may require a federal waiver. The Department of Health proposed having a clinical pharmacist review the needs of Medicaid recipients who are on 12 or more long-term medications, noting to the panel that this measure would save an estimated $8 million to $10 million in its first year. The panel is expected to meet three to four times before sharing recommendations.

North Dakota: Legislators Likely to Review Medicaid Expansion as 2017 Sunset Nears

Representative George Keiser (R), chairman of the Interim Health Care Reform Review Committee, cited budget concerns when he announced that the State will likely re-examine Medicaid expansion in its current form as the 2017 sunset provision nears. The State currently contracts with Sanford Health Insurance to administer the program. Representative Keiser has suggested that modifications to the contract may be required, such as changes to provider reimbursement, or that the State Human Services Department may take over the program. More than 20,000 North Dakotans are enrolled in the Medicaid expansion program.

Oklahoma: Budget May Prevent Major Medicaid Provider Rate Cuts

The Legislature's approval of a FY 2017 budget that increases funding for the Oklahoma Health Care Authority (OHCA) by 2% could prevent the 25% Medicaid provider rate cuts that were under consideration, OHCA CEO Nico Gomez said. Governor Mary Fallin (R) is expected to sign the budget legislation.

South Carolina: State Proposes Streamlined Family Planning-Only Medicaid Application Process

The Department of Health and Human Services announced a proposed Medicaid State Plan amendment to streamline the application process for limited-benefit Medicaid coverage of family planning services. Prior to the ACA, South Carolina permitted individuals to use a family planning-only application if they were not seeking full Medicaid benefits, which also permitted applicants to report their own income and not that of other household members. The State proposes to reinstate their previous family planning-only streamlined application process, which the State says will allow for a more prompt decision than the current process.

STATE & FEDERAL HEALTH REFORM UPDATES

Vermont: Governor Protects and Expands Access to Birth Control Benefits

Governor Peter Shumlin (D) expanded birth control coverage options and codified existing federal mandates by signing into law H.620, which requires insurers to cover all FDA-approved forms of contraceptives without cost-sharing to insulate Vermonters from “efforts to undermine important birth control provisions in the Affordable Care Act.” Notably, the bill establishes a special enrollment period enabling women who become pregnant to sign up for health insurance on Vermont Health Connect outside of open enrollment. Additionally, the bill permits women to obtain up to 12 months of hormonal contraceptive methods following one physician visit and ensures vasectomies are available to men without cost-sharing, making Vermont the first state to extend no-cost birth control protections to men. Finally, the bill increases Medicaid reimbursement rates for long acting reversible contraceptives such as intrauterine devices. The law is scheduled to take effect on July 1.

Post-ACA Marketplace and Medicaid Enrollees Report Access to Care and Satisfaction With Coverage

A new survey from the Commonwealth Fund found that the ACA’s coverage expansions are ending long periods of uninsurance for many of the newly enrolled, with 45% of adults in Marketplace plans and 62% of adults newly covered by Medicaid having been uninsured prior to enrollment. Over half of these adults had been uninsured for more than two years. During this same period, the share of adults enrolled in employer sponsored insurance (ESI) has remained stable (56% of adults in 2013 to 53% in 2016), suggesting that the overall growth in Marketplace and Medicaid coverage is not due to substantial shifts from ESI. The Commonwealth Fund’s survey, now in its fourth wave, indicates that each year since the ACA’s coverage expansions, majorities of new enrollees have reported they are very or somewhat satisfied with their health insurance—77% of Marketplace enrollees and 88% of Medicaid enrollees according to the most recent data. Access to care has also improved. Seventy-two percent of new enrollees report using their coverage to go to a doctor or other provider or to fill a prescription; 61% of these enrollees report they would not have been able to afford or access that care prior to enrolling. The survey was based on a sample of working-age adults, roughly 18% of whom have new Marketplace or Medicaid coverage.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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