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Posts Tagged ‘Medicaid expansion’

What Trumpcare will likely look like

January 18th, 2017 Comments off

Donald Trump is following the path of every president elected before him from at least the Truman administration forward, proclaiming a public policy goal of providing medical insurance to all Americans. “We’re going to have insurance for everybody,” the soon to be president told The Washington Post last week. “It will be in a much simplified form,” he said. “Much less expensive and much better” than what’s available under the Affordable Care Act.

How will Trump bring that about? Wryly playing off then-House Speaker Nancy Pelosi’s famous statement in early 2010 that opponents of the Affordable Care Act would have to first vote for it in order to see all of its provisions, Trump similarly wants to see his Health and Human Services Secretary nominee Tom Price confirmed by the Senate before he reveals his plan.

I’ll go out on a limb and make some predictions on the rough outlines. This prediction assumes Trump will forge his own policy in this area and not necessarily conform to longstanding Republican principles that were posted to his transition website but have since been taken down. Trump’s reform plan won’t be a wholesale repeal of the Affordable Care Act. It will at least initially keep much of the omnibus reform statute intact and concentrate on scrapping Titles I and II dealing with the individual market reforms and expanded Medicaid eligibility to single adults given these components of the law have dominated the Republican reform agenda.

The Trump administration’s plan will give up on trying to make the problematic and inherently unstable individual market as it’s currently structured work with a mix of incentives and disincentives like those of the Affordable Care Act. The Trump plan will likely largely replace the nongroup market with something ironically along the lines of what Affordable Care Act designer Ezekiel Emanuel suggested last week: automatic enrollment in a catastrophic plan. Trump’s plan could offer a level of basic coverage for all working age Americans, starting when the reach their 18th birthday and lasting until they go onto Medicare at age 65 or older. As per Emanuel’s concept, there would be an option to enroll in supplemental plans for those who need or desire more generous coverage, similar to Medicare advantage plans. Most of the funding would come from new payroll and self-employment taxes. These supplemental plans could conceivably comport with Trump’s statement that his plan would offer low deductibles.

This reform of the nongroup market would also pave the way for a gradual transition away from employer-sponsored group plans. Employers would fund the aforementioned supplemental plans as an employee benefit. Or not. Either way, the dominance of employer-sponsored all inclusive medical coverage – which also dates to the Truman administration – would begin to go into decline.

As Trump stated previously, his plan will end the Title II Medicaid reforms and turn Medicaid into a state block grant program. Health savings accounts contribution limits will be increased and contributions permitted to cover supplemental plan premiums and any uncovered medical or dental expenses.

Finally, look for Trump’s plan to focus strongly on prescription drug costs to bend the medical care cost curve, creating a bidding entity or even a federal monopsony that will effectively set the prices of medications for all government programs, including the new basic health plan. Trump indicated in a news conference last week he will play hardball with the pharmaceutical industry.

 


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. 

November elections increase likelihood of California revisiting single payer

December 21st, 2016 Comments off

Various media accounts report that California of all states stands to lose the most federal funding for health care coverage under the Patient Protection and Affordable Care Act – 20 to 25 billion dollars annually – if the law’s health insurance reforms are repealed as expected next year. The large majority of that sum comes from enhanced federal cost sharing under the law’s Medicaid eligibility expansion, representing more than $18 billion this year, according to this issue brief by the State Health Reform Assistance Network. Accounting for the balance are advance premium tax credits and cost sharing subsidies to offset the cost of qualified health plans purchased on the state’s health benefit exchange, Covered California.

Other media accounts portray California’s state policymakers as circling the wagons to fight this substantial loss of federal dollars given the potential for many low and moderate income households not covered by employer group plans to lose health coverage as well as extensive fiscal damage the state budget. But they are unlikely to prevail against the political will of Washington under the new administration and Congress and will have to consider alternatives. One likely candidate would be some form of single payer coverage, perhaps utilizing an all payer Accountable Care Organization (ACO) structure to hold down rising health care costs and financed by income, payroll and self-employment taxes.

In the previous two decades, single payer failed to gain voter approval when proposed as a ballot measure or as legislation. This time, however, with a supermajority vote margin gained in the November elections, legislative Democrats along with incumbent Democratic Gov. Jerry Brown could enact a single payer measure with — or without — support from Republican lawmakers. It would represent a far more radical reform than the Affordable Care Act. However, among the states, California has a sufficiently large population base and economy to go single payer if it chooses. The Golden State may well have to if it wants to carve out its own health reform destiny in the post Affordable Care Act era.

 


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. 

Federal study finds Medicaid expansion improves individual risk pool, reduces HIX plan premiums

August 27th, 2016 Comments off

The HHS analysis uses 2015 data on HealthCare.gov plans and enrollment to assess how Medicaid expansion affects Marketplace premiums. It controls for differences across states in demographic characteristics, pre-ACA uninsured rates, health care costs, and state policy decisions other than Medicaid expansion, finding a 7 percent difference in Marketplace premiums holding these factors fixed.

States that expanded Medicaid coverage under the ACA have Marketplace risk pools comprised largely of individuals with incomes above 138 percent FPL, while non-expansion states have Marketplace risk pools that include more individuals below 138 percent FPL. Because lower-income individuals on average have poorer health status than those with higher incomes, a state’s decision not to expand Medicaid affects the Marketplace risk pool and, ultimately, Marketplace premiums. Issuers have noted that Medicaid expansion is one way that states can strengthen their Marketplaces.

Source: Medicaid expansion lowers Marketplace premiums by 7 percent

The upshot of this analysis is the actuarial health of the statewide individual health insurance risk pools would be improved taking into account the correlation between socio-economic status and health status and removing households earning between 100 and 138 percent of federal poverty from the pool by making that cohort eligible for expanded Medicaid.

Given that some health plan issuers have withdrawn from state health benefit exchange marketplaces citing lower population health status — and higher risk — than anticipated, it would be interesting to see if there’s a correlation between states that opted not to expand Medicaid eligibility and states where plans have exited exchanges for plan year 2017.

 


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. 

ACA’s welfare-based means testing adds program complexity, risk for error

October 23rd, 2015 Comments off

According to a Government Accountability Office report released Thursday, some individuals received subsidies to help them purchase exchange coverage while they were also enrolled in Medicaid. According to Carolyn Yocom, a director of health care studies at GAO, the duplicate coverage could mean the federal government is “paying twice — subsidizing exchange coverage and reimbursing states for Medicaid spending — for individuals enrolled in both types of coverage.”The House is expected to hold a hearing on the issue on Friday (Pear, New York Times, 10/22).The report noted that an estimated seven million U.S. residents have changing incomes that likely qualify them for Medicaid at some times and for the ACA’s subsidies at others. According to the report, it is difficult for the federal government to differentiate between the eligibility groups (Howell, Washington Times, 10/22). Further, the report noted that CMS “does not have procedures to automatically terminate subsidized exchange coverage when individuals are determined eligible for Medicaid.”

Source: GAO Finds Federal Gov’t Paid for Duplicate Coverage Under ACA – California Healthline

While broadening health coverage for Americans under age 65 not covered by predominant employer-sponsored health coverage, the Patient Protection and Affordable Care Act is not exactly seamless in its approach, leading to the kinds of problems the GAO identified. Largely because of its complexity in using monthly household income — the traditional means test for state welfare eligibility — and siloed forms of coverage.

The first seam is at 100 percent of household federal poverty level (FPL) — the minimum income in order to be eligible to purchase subsidized coverage on state health benefit exchanges. Then come six income tranches that determine the amount of the subsidy, topping out at another seam — 400 percent of FPL — above which subsidies are no longer available. Overlaying these at the lower household income range is yet another seam in states that have opted to expand Medicaid — a household income of 138 percent of FPL. With many lower income households frequently moving back and forth across this seam, it’s easy to see how state health benefit exchanges would be hard pressed to keep track to ensure these households are in the correct program at all times.

 


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. 

Growing Medicaid enrollment poses potential fiscal threat to state health benefit exchanges

June 24th, 2015 Comments off

The biggest threat to the future financial sustainability of the state health benefit exchange marketplace may be declining economic prosperity and the resulting polarization of household income strata, particularly in the states that have elected to expand Medicaid eligibility to households earning up to 138 percent of federal poverty and to single adults.

The reason? Low income households that qualify for Medicaid generally cannot purchase qualified health plans (QHPs) offered on state health benefit exchanges. If the growing Medicaid eligible population isn’t able to purchase QHPs, the exchanges don’t derive fees assessed on health plan issuers – their main source of revenue as federal establishment grant funds dwindle — that are based on a percentage of premium or set amount for each “effectuated” enrollee. (In states that have opted not to expand Medicaid eligibility, households earning at least 100 percent of federal poverty are eligible to purchase exchange QHPs.)

A Rand Corporation analysis of 2013-15 health coverage enrollment trends issued in June 2015 reported 6.5 million newly enrolled in Medicaid as of February 2015, outpacing by 58 percent the 4.1 million that enrolled in exchange QHPs. According to federal data, 71.1 million Americans were enrolled in Medicaid and the Children’s Health Insurance Program as of April 2015, 12.3 million more than the average for July to September 2013.

While exchanges realize no revenue from Medicaid enrollments, they do incur expense in handling them. Under the Patient Protection and Affordable Care Act’s “no wrong door” policy, exchanges are required to process eligibility and enrollment for both state insurance programs like Medicaid as well as QHPs. It’s also easier to enroll in Medicaid coverage. Unlike exchange QHPs that limit enrollment to part of the year during open enrollment periods, those eligible for Medicaid can enroll at any time of the year.

In California, an expansion state with the nation’s largest Medicaid program serving 12.2 million or about 1 in 3 Californians, enrollment grew by 41.4 percent between December 2013 and January 2015, according to the state’s Medicaid administrator, the Department of Health Care Services. Before that, a severe economic downturn added about 1 million new eligibles to the Golden State’s Medicaid rolls between 2007 and 2010.

Enrollment in California’s Medicaid program – known as Medi-Cal – far outstrips that of QHPs sold through the state’s health benefit exchange, Covered California. According to the federal Department of Health and Human Services, there were 1.4 million enrolled in Covered California plans as of February 2015 — about the same number for plan year 2014. To put that in perspective, there are roughly 61 Medi-Cal enrollees for every 7 enrolled in a Covered California QHP.

Colorado, a Medicaid expansion state that operates a state-based exchange, has seen burgeoning Medicaid enrollment tax the finances of its exchange. The state enrolled 1.2 million in Medicaid — an increase of 433,172 or 55 percent — between late 2013 and February 2015. For 2015, the state’s exchange, Connect for Health, enrolled 27,465 people in Medicaid or CHIP. That’s nearly twice the 15,566 enrolled in commercial plans, blowing a $7 million hole in its budget for increased call center costs handling complex Medicaid enrollments and prompting the exchange to seek reimbursement from the federal government, according to The Denver Post.

 


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. 

Exclusive: States quietly consider ObamaCare exchange mergers | TheHill

May 22nd, 2015 Comments off

A number of states are quietly considering merging their healthcare exchanges under ObamaCare amid big questions about their cost and viability. Many of the 13 state-run ObamaCare exchanges are worried about how they’ll survive once federal dollars supporting them run dry next year. Others are contemplating creating multi-state exchanges as a contingency plan for a looming Supreme Court ruling expected next month that could prevent people from getting subsidies to buy ObamaCare on the federal exchange. The idea is still only in the infancy stage. It’s unclear whether a California-Oregon or New York-Connecticut health exchange is on the horizon.But a shared marketplace — an option buried in a little-known clause of the Affordable Care Act — has become an increasingly attractive option for states desperate to slash costs. If state exchanges are not financially self-sufficient by 2016, they will be forced to join the federal system, HealthCare.gov.

Source: Exclusive: States quietly consider ObamaCare exchange mergers | TheHill

The Patient Protection and Affordable Care Act provision referenced in this story is at Section 1311(f), which allows state exchanges to combine into “regional or other interstate exchanges,” subject to approval by the participating states and HHS. Another provision, Section 1333(a), would facilitate interstate exchanges by providing a mechanism for health plan issuers to pool risk and sell across state lines via “health care choice compacts” starting in January, 2016. Two or more states could enter into an agreement under which health plans could be offered in state individual markets, subject to regulation by the state in which the plan was written or issued, provided plans comply with the other states’ rules regarding market conduct, unfair trade practices, network adequacy, and consumer protection standards including standards relating to rating and handling of disputed claims.

While complex in and of itself, this might be easier to accomplish if state health benefit exchanges conducted eligibility and enrollment solely for commercial individual plans. A major complicating factor is Section 1413(c)(1) of the Affordable Care Act requiring each state to “develop for all applicable State health subsidy programs a secure, electronic interface allowing an exchange of data …that allows a determination of eligibility for all such programs based on a single application.”

This “no wrong door” policy requires the exchanges to screen households applying for coverage for income and household size eligibility criteria for both commercial Qualified Health Plans or QHPs) as well as state insurance programs such as Medicaid and the Children’s Health Insurance Program (CHIP). States have separate eligibility guidelines for these programs that won’t easily translate across state lines, especially considering a lack of uniformity among states on the Affordable Care Act’s expanded Medicaid eligibility. In addition, state operated exchanges as well as the federal marketplace have had difficulty integrating their IT systems to perform eligibility and enrollment functions fulfilling the Affordable Care Act’s “no wrong door” requirement.

 


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

March 22nd, 2015 Comments off

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. 

Burgeoning enrollment in California’s Medicaid program raises tensions between administration, lawmakers over access to care, provider reimbursement rates

March 5th, 2015 Comments off

California Gov. Jerry Brown took a cautious approach on expanding Medicaid eligibility under the Patient Protection and Affordable Care Act. It was well into 2013 and not long before the start of the new fiscal year (July 1) and the October 1, 2013 launch of open enrollment in that state’s exchange marketplace, Covered California, before Brown approved legislation authorizing the Medicaid expansion. Even though the federal government would initially be covering most of the cost of the expansion, Brown was concerned about the overall growth of the state’s Medicaid program, Medi-Cal.

With good reason. Kim Belshé, who served as Health & Human Services Agency secretary in the previous administration of Gov. Arnold Schwarzenegger, warned in 2009 that even with a $10 billion infusion of supplemental federal cost share funding provided by the American Recovery and Reinvestment Act of 2009, “California cannot afford the Medicaid program as currently structured and governed by federal rules and requirements.” In other words, it’s a budget buster.

In 2013, Brown was at odds with his fellow Democrats in the Legislature who wanted to increase reimbursement rates paid to medical providers unhappy with low reimbursement rates. Since providers can opt not to accept Medi-Cal, they argued, it’s critical that they have sufficient incentive to do so to allow Medi-Cal enrollees adequate access to health care. Brown didn’t go along with boosting provider reimbursement rates that year, reasoning the state was still on the road to recovering its fiscal health after tax revenues were severely crimped in the 2008-09 recession.

Now two years later, Medi-Cal enrollment has jumped to more than 12 million, covering nearly 1 in 3 Californians and following the pattern seen in other states where Medicaid enrollments are outpacing by 2 to 1 sign ups for subsidized commercial health plans sold though state health benefit exchanges. The burgeoning enrollment has heightened the pre-existing tensions between Brown and legislative Democrats over increasing Medi-Cal provider reimbursement rates, as the Los Angeles Times reports in this story on two measures that would reverse the recession-era cuts in provider reimbursement rates.

As The Times reports, those tensions surfaced in this blunt exchange between the chair of the Senate Health Committee, Ed Hernandez (D-West Covina), and Jennifer Kent, director of the state Department of Health Care Services, at a hearing this week. Hernandez asked Kent to respond directly as to whether Medi-Cal patients have the same access to doctors as presumably more affluent Silicon Valley workers covered by commercial health plans.

“Yes or no?” he said.

“Yes,” Kent said.

“I don’t think so,” Hernandez replied.

 


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. 

Utah: Medicaid expansion would save large employer penalties, use SHOP exchange for individual plans

December 11th, 2014 Comments off

Approval of its proposed Healthy Utah Medicaid expansion program would allow large employers of low wage workers avoid penalties when those workers enroll in subsidized individual health plans though the state’s health benefit exchange, according to a document describing the program. The proposed 3-year pilot program is pending approval of a Section 1115 waiver of Medicaid rules from the U.S Department of Health and Human Services.

Utah is served by a federally facilitated exchange (FFE) in the individual market and operates a state-based exchange (SBE) serving small employers of 1 to 50 employees under the Small Business Health Options Program (SHOP) of the federal Patient Protection and Affordable Care Act. A notable component of Utah’s proposed Medicaid expansion program is those in the expansion population would receive federal Medicaid share funding to purchase commercial plans sold via the state’s small business exchange, Avenue H, and not the FFE, healthcare.gov. Those earning more than 100 percent of federal poverty levels (FPL) are eligible to purchase coverage in the FFE.

“Beginning in 2016, large businesses in Utah will likely face $11 to $17 million less in tax penalties each year if their employees making between 101 percent and 133 percent FPL are enrolled in a state-sponsored program rather than a Health Insurance Marketplace plan with a tax credit,” the document states. Employers of 50 or more full-time employees must offer health insurance to 95 percent of their workforces starting in 2016.

In addition, children who currently receive Medicaid would have the option to enroll in the same commercial plan their parents select through Avenue H. “Medicaid would continue to provide cost sharing and wrap-around coverage for these children to ensure they continue to receive the same level of coverage they do today,” the Healthy Utah plan states. “It is hoped that having a single primary health plan for the family will simplify coverage for the family. The federal government has previously denied Utah’s requests to use Medicaid funding to purchase these private plans. However, through the Healthy Utah negotiations, Utah was able to obtain approval for this type of assistance.”

 


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. 

Idaho mulling reforming Medicaid to use blend of DPC and “Arkansas plan”

November 26th, 2014 Comments off

Idaho is considering restructuring its Medicaid program to use state funds to directly cover primary care (DPC) for Medicaid eligibles earning less than 100 percent of federal poverty levels while using federal Medicaid funding to cover their major medical costs. Those with household incomes between 100 and 138 percent of federal poverty under the Patient Protection and Affordable Care Act’s Medicaid expansion would be eligible to purchase commercial health plans through the state’s health benefit exchange marketplace. That strategy is referred to as the “Arkansas Plan” in recognition of that state’s obtaining a waiver from the U.S. Department of Health and Human Services last year approving of the use of Medicaid dollars to help those new Medicaid eligibles buy exchange plans. The state’s Medicaid Redesign Workgroup estimates implementing both would save $1 billion over 10 years.

(H/T to Liz Osius of Manatt Phelps & Phillips LLP for the heads up in her weekly health care reform roundup)

 

 


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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