Tag Archive: Arkansas

Arkansas proposes overhauling Medicaid program to emphasize employer-sponsored coverage

Arkansas is asking the U.S. Department of Health and Human Services to sign off on an overhaul of its Medicaid expansion program to make it into more of an employment expansion program based on employer-sponsored coverage rather than a traditional state insurance program for low income earners. The state is proposing federal Medicaid funding go toward defraying the cost of premiums for employees and also subsidizing small employer plans.

Source: 20160215 ArkWorks Summary_JM – 20160215_ArkWorks_Summary_share.pdf

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Arkansas State Health Exchange Paused by Governor

LITTLE ROCK, Ark. — During an afternoon meeting at the capitol Thursday, Governor Asa Hutchinson — explaining why he’s pushing pause on a key tenant of health care reform in the state. Under the Private Option, passed in 2013, Arkansas received a $90 million federal grant to establish a state based, online health insurance marketplace where individuals can shop and compare plans.

“We’re not as a state convinced that’s going to be needed in the direction that we go,” Hutchinson said.

The state is currently using a federal version of the exchange through which 62,000 Arkansans are getting coverage.

“There’s less risk going with the exchange that we know rather than an exchange we don’t know,” he said.

Still, the governor says the state will continue working on an online marketplace for businesses which set to be functional next year.

Source: Arkansas State Health Exchange Paused by Governor

Arkansas’s move would put the state in a category with Utah. Utah operates its own Small Business Health Options Program, Avenue H, with the federal government operating the state’s exchange for individual health plans.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Medicaid managed care plans could be sold on state health benefit exchanges

With Medicaid enrollments strongly outpacing commercial individual plan enrollments in state health benefit exchanges, a number of factors are aligning to set the stage for policymakers to allow Medicaid managed care plans be offered on the exchanges alongside individual Qualified Health Plans (QHPs). They include:

  • A rulemaking issued in June by the federal Center for Medicare & Medicaid Services that would apply requirements similar to those for commercial individual and Medicare Advantage plans to Medicaid managed care plans, including allowing plan issuers to advertise products offered across the Medicaid and exchange markets (Click here for a summary of the proposed regulations posted at the Health Affairs blog);
  • The need to assure operational sustainability among state health benefit exchanges, particularly in states that have expanded Medicaid eligibility standards to households earning up to 138 percent of federal poverty levels and single childless adults. Beginning in 2015, federal establishment grant funding began drying up, leaving exchanges reliant on generating fees from participating plan issuers. Adding Medicaid managed care plans to commercial QHPs assessed exchange participation fees would bolster exchange revenues and reduce fiscal uncertainty;
  • The success of the Arkansas “private option” in expanding coverage under a federal Section 1115 waiver permitting adults that would have otherwise been eligible for expanded Medicaid coverage under the Affordable Care Act to purchase exchange QHPs;
  • Substantial and ongoing difficulties fully integrating exchange eligibility and enrollment IT platforms with legacy state Medicaid eligibility and enrollment systems to meet the Affordable Care Act’s mandate of a single application process for QHP and Medicaid eligibility determinations and enrollment;
  • Financial considerations in the distribution channel: insurance producers are wary of enrolling households eligible for Medicaid since they earn commissions only on commercial individual plans sold on and off the exchanges. The role of brokers and agents relative to Medicaid enrollments is currently under evaluation by California’s exchange, Covered California.

Sections 1301(a) and 1311(c) of the Patient Protection and Affordable Care Act defining a QHP eligible for sale on the exchanges would appear to allow Medicaid managed care plans be deemed QHPs in the exchanges provided the plan issuer also offers individual plans on the exchange that also meet state requirements (The Affordable Care Act requires a minimum of one silver and one gold level plan be offered). Indeed, the QHP requirements set forth in Section 1311(c) have some overlap with those proposed for Medicaid managed care plans in the June CMS proposed rulemaking, including provisions requiring provider network adequacy standards, plan quality improvement programs and clinical care quality management.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Arkansas could be leader state on ACA Section 1332 waiver — but must act quickly

If Arkansas wishes to opt out of Patient Protection and Affordable Care Act requirements governing individual and small group health insurance market reforms and propose an alternative plan under Section 1332 of the law, it must act quickly in order to have such a plan in place by January 1, 2017 as allowed under Section 1332, a consultant’s report recommends. On that date, Arkansas’s existing federal waiver allowing it to use expanded Medicaid eligibility funding to subsidize the purchase of qualified health plans on its health benefit exchange expires at the same time it plans to launch a state-based exchange. The 1332 waiver could also be combined with a new Medicaid Section 1115 waiver as part of an omnibus reform plan as permitted by federal rules, depending on how the state chooses to provide medical coverage to its low income and medically frail residents.

Section 1332 provides for state innovation giving states the flexibility to opt out of most Affordable Care Act individual and small group health insurance market reforms including the requirements to have a health benefit exchange, that plans provide specified essential health benefits as well as advance tax credit premium subsidies and reduced cost sharing for those households meeting income criteria. Also waivable are the individual and employed shared responsibility provisions.

To qualify for a waiver from the federal government, states must demonstrate their programs would ensure individual and small group plans would offer coverage at least on a par with plans providing the 10 essential health benefits prescribed by the ACA. State programs would also have to ensure individuals and small employers would have access to coverage with affordable premiums and protections against “excessive” out-of-pocket costs (such as annual maximums) like those for ACA plans and cover a comparable number of residents as existing ACA plans.

States granted Section 1332 waivers are eligible for “pass through” federal funding operating like an annual block grant. The funding would cumulatively represent what state residents would otherwise receive under ACA rules for premium tax credits, cost-sharing reductions and small business credits.

Given the complexity of assessing various policy and waiver options and preparing and vetting the application, the report prepared by Public Consulting Group recommends Arkansas enact the required authorizing legislation to seek the waiver by June 2015 and to submit the waiver application to the federal government by October 2015. (H/T to Elizabeth Osius of Manatt, Phelps & Phillips, LLP for writing about the report).

“Section 1332 Waivers are new territory in state and federal healthcare policy. No such waiver has been applied for, denied, or approved as of the date of this writing,” the April 6, 2015 Public Consulting Group report notes. “Interpreting and negotiating what is permissible under Section 1332 will gain its first precedents in the months ahead. This paper serves to help assess options and plan activities should Arkansas wish to be the first, or among the first, to submit an application.”

According to the report, some of the policy options Arkansas could implement under a Section 1332 waiver include:

  • Continuous enrollment for individual plans instead of annual open enrollment periods;
  • Offering Medicaid plans on the state health benefit exchange;
  • Allowing employers to issue tax exempt vouchers to employees to purchase individual coverage;
  • Reduced penalties for large employers offering “skinny” plans that do not meet ACA employer shared responsibility requirements for minimum affordable coverage;
  • Liberalized eligibility requirements for those wishing to purchase catastrophic plans with less than 60 percent actuarial value.
 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Arkansas exploring creating alternative state health plan

Arkansas, which pioneered the so-called “private option” to use expanded federal Medicaid funding under the Patient Protection and Affordable Care Act to subsidize commercial insurance plans sold on the state’s health benefit exchange, is also out front among states when it comes to preparing to potentially exercise an Affordable Care Act option to opt out of key requirements of the law starting in 2017 and set up its own plan to provide health coverage to low and moderate income households.

The Arkansas Health Reform Legislative Task Force created by Act 46  signed last month by Gov. Asa Hutchinson will work on developing an alternative health care coverage model by the end of this year, replacing the private option as of Jan. 1, 2017.

“Notwithstanding any other rule, regulation, or law to the contrary, the Department of Human Services may submit and apply for any federal waivers or authority necessary to transform the Arkansas Medicaid Program into a program with maximum state flexibility in the use of the funds for innovative and cost-effective solutions for the provision of healthcare services,” Act 46 states. Among the options to be studied is obtaining a federal block grant to fund the alternative program.

Section 1332 of the Affordable Care Act titled Waiver for State Innovation allows states to petition the U.S. Department of Health and Human Services for a waiver to opt out of key ACA requirements beginning in 2017 including the state health benefit exchange, premium tax credit subsidies and cost sharing reductions for plans sold on the exchange as well as the individual and employer “shared responsibility” mandates. States receiving a Section 1332 waiver would be eligible for “pass through” funding operating like an annual block grant. The funding would cumulatively represent what state residents would otherwise be eligible to receive under ACA rules for premium tax credits, cost-sharing reductions and small business tax credits if they are ineligible for them under the state programs.

The Section 1332 waiver comes with some provisos. States opting out of the ACA rules would have to demonstrate their programs would ensure individual and small group plans offer coverage at least on a par with plans providing the 10 essential benefits prescribed by the ACA. State programs would also have to cover a comparable number of residents as well as ensure individuals and small employers have access to coverage with affordable premiums and protections against “excessive” out-of-pocket costs.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

GAO report points to low Medicaid reimbursements as impetus for “Arkansas plan”

A recent critical assessment of Arkansas’s use of federal Medicaid dollars to subsidize the purchase of commercial individual health plans by low income people through the state’s health benefit exchange indicates a lack of health care providers willing to accept standard Medicaid reimbursement played a key role in the move. The repurposing of the Medicaid funding was authorized under a 3-year-long demonstration project waiver issued in the U.S. Department of Health and Human Services (HHS) in 2013.

The U.S. Government Accountability Office (GAO) issued a report earlier this month criticizing the waiver as contrary to HHS’s policy of requiring such waivers not incur costs beyond existing state Medicaid program expenditures. The report concluded that $4 billion HHS approved for the demonstration project was approximately $778 million more than the state would have spent for adult beneficiaries under its then-existent Medicaid program. HHS disagrees with the report’s conclusion, contending GAO too narrowly analyzed HHS’s budget neutrality policy governing Medicaid demonstration programs and Arkansas’s Medicaid cost data and failed to take into account the effect of Medicaid program expansions.

The stated policy intent of the demonstration is to ensure access to care and continuity of coverage since individuals could stay enrolled in the same health plan regardless of whether their coverage is financed through Medicaid or federal subsidies. The GAO report noted that according to Arkansas’s waiver application, the state’s network of Medicaid providers was at capacity. “By purchasing [exchange qualified health plan] coverage for newly eligible [Medicaid] beneficiaries, the state suggested it could improve access to care because beneficiaries would have access to expanded provider networks” through commercial plans sold on the exchange.

The GAO report takes issue with “questionable assumptions about provider payment rates,” noting the demonstration program projected the cost of expanding Medicaid without the demonstration assumed Arkansas would have had to pay its Medicaid providers rates comparable to private insurance payment rates—significantly higher rates than the rates the state was paying its [Medicaid] fee for service (FFS) providers—to ensure access for newly eligible beneficiaries.

For example, the report noted, the state assumed that it would have to pay 67 percent above its Medicaid reimbursement rate for primary care services and 10 percent above Medicaid reimbursement rates for higher-cost services such as inpatient and long-term care. “HHS approving officials told us that they thought the state’s underlying concern about the insufficient capacity of the state’s Medicaid provider network was valid given a projected 25 percent increase in the number of individuals covered under the state’s Medicaid program,” the GAO report states.

HHS has approved similar demonstration waivers for Iowa and Pennsylvania, allowing those who would otherwise be eligible for Medicaid coverage to purchase coverage through those state’s health benefit exchanges. Interest has also been shown by New Hampshire and active negotiations underway between HHS and Utah.

“Arkansas’s demonstration may prove an important test of whether using Medicaid funds to finance coverage offered through exchanges will improve access to care and continuity of coverage for the adult population that the demonstration aims to cover,” the GAO report concludes. “However, the increasing use of demonstrations has shifted a significant portion of federal Medicaid funds into financing care that is not subject to all of the federal Medicaid requirements. While HHS policy requires that demonstrations be budget-neutral and therefore not increase the costs to the federal government, we have had long-standing concerns about the Department’s ability to ensure budget neutrality given HHS’s flexible approach towards approving spending for new demonstrations.”

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Medicaid beneficiaries likely to get coverage in some state exchange marketplaces

Medicaid beneficiaries appear increasingly likely to participate in health benefit exchanges in at least some states in 2014.  Two Medicaid-eligible populations may end up getting commercial health insurance via the exchanges:  those whose incomes fluctuate above and below Medicaid eligibility levels and those residing in states that have opted not to expand the Medicaid eligibility cutoff to 133 percent of federal poverty guidelines.  Both scenarios require waivers from the Center of Medicare and Medicaid Services (CMS).

The first group would be offered exchange products called Medicaid bridge plans authorized under guidance issued by CMS on December 10, 2012.  This is the so-called “Tennessee Plan” since that state originated the concept and is designed to ensure continuity of medical care of Medicaid beneficiaries so they don’t have to change plans and providers as their incomes rise and fall.

The second population would participate in the exchange marketplace under the so-called “Arkansas Plan” in states that have not chosen to expand Medicaid eligibility to those earning up to 133 percent of federal poverty as authorized by the Patient Protection and Affordable Care Act.

In California, legislation that would expand that state’s Medicaid eligibility has failed to advance for nearly two months amid state fiscal concerns over the long term cost share impact and to what extent counties should participate in the cost share.  Legislation authorizing Medicaid bridge plan products for those earning up to 200 percent of federal poverty, SBX1-3, has passed the Senate and awaits action in the state Assembly.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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