Affordable Care Act: State Action Newsletter

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August 26, 2011

Legislators and Staff Talk Health Reform in San Antonio

Some 4,800 state lawmakers, legislative staff and policy experts gathered in San Antonio, Texas, August 8-12, for NCSL’s 2011 Legislative Summit.

Health reform implementation sessions drew standing-room-only crowds

Attendees heard from national experts including: Joel Ario, director, Health Insurance Exchange Group, Center for Consumer Information and Insurance Oversight (CCIIO); Florida’s former Attorney General Bill McCollum ; Cindy Mann, deputy administrator, Centers for Medicare and Medicaid Services; and Kansas Insurance Commissioner Sandy Praeger.

“I try to come away with at least five useful take-aways from NCSL’s Legislative Summit," said Nolan Langweil, fiscal analyst with the Vermont General Assembly and NCSL Health Committee member. “That goal was surpassed at this year’s Legislative Summit.”

Asked about what he valued at this year’s meeting, Alabama Representative Greg Wren, co-chair of NCSL’s Health Reform Implementation Task Force, said that, “the interaction between state legislators and HHS/CMS officials was particularly valuable in building stronger state-federal health care partnerships.”

State Efforts to Enroll Eligible Children in Medicaid and CHIP

Last week the U.S. Department of Health and Human Services (HHS) awarded $40 million in grants to 23 states to identify and enroll children who are eligible for Medicaid or the Children’s Health Insurance Program (CHIP). These awards were the second cycle of funds released under an initiative established by the Children’s Health Insurance Program Reauthorization Act (CHIPRA) of 2009. The Affordable Care Act authorized an additional $40 million for the initiative for fiscal years 2009 through 2015. According to HHS, two-year grants were awarded to state agencies, community health centers, school-based organizations and non-profit groups in the following areas:

1) Using technology to facilitate enrollment and renewal

2) Retaining eligible children in coverage

3) Engaging schools in outreach, enrollment and renewal activities

4) Reaching children who are most likely to experience gaps in coverage

5) Ensuring eligible teens are enrolled and stay covered

For more information, please visit:
HHS press release
NCSL’s CHIP webpage
NCSL’s Uninsured Children postcard

Kansas Returns $31 Million Early Innovator Grant

On August 9, 2011, Kansas Governor Sam Brownback announced that the state will return $31.5 million in Early Innovator grant funds to the Department of Health and Human Services. Six states, including Kansas, and a multistate consortium received a total of $241 million from HHS to develop and implement information technology to operate health insurance exchanges required by the Affordable Care Act. Earlier this year, Oklahoma also returned $54.6 million of the Early Innovator grants. Together, Kansas and Oklahoma have returned 36 percent of the total funding awarded through Early Innovator grants. 

Governor Brownback stated that "there is much uncertainty surrounding the ability of the federal government to meet its already budgeted future spending obligations. Every state should be preparing for fewer federal resources, not more. To deal with that reality Kansas needs to maintain maximum flexibility. That requires freeing Kansas from the strings attached to the Early Innovator Grant.” Kansas has received other federal funds to help implement federal health reform; however, this grant accounted for 70 percent of Kansas’ total federal funding appropriated from the Affordable Care Act.

Kansas is one of at least seven states that have returned more than $90 million in federal grants intended to help states implement the Affordable Care Act. All states have received some sort of grant support for federal health reform. To date, almost $3.5 billion in federal health reform grants have been awarded to state agencies, tribal organizations, health centers, research centers and other entities within the states. For additional information on ACA funding, please visit: http://www.ncsl.org/?tabid=21994.

Federal Funding for States to Continue Building Exchanges

On August 12, 2011, 13 states and the District of Columbia were awarded $185 million in Level One Establishment grants to continue their health exchange implementation efforts. Indiana, Rhode Island and Washington were the first states to receive the grants in May, after completing a number of activities under their previous exchange planning grants, which were awarded to most states in September 2010. Level One Establishment Grants provide up to one year of funding to states that have made some progress under their Exchange planning grant. Level Two Establishment Grants are designed to provide funding through December 31, 2014, to help states complete their exchanges and will be available to states beginning in spring 2012.

Source: HHS Exchange Establishment Grants Award List, 2011. 

Appeals Court in Georgia Rejects Individual Mandate

The latest federal court ruling on the health care law (August 12) found that Congress exceeded its powers to regulate commerce when it required people to buy health insurance, the provision called the "individual mandate." The 11^th Circuit Court of Appeals, based in Atlanta, ruled: “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives.”   While that provision was labeled unconstitutional, the rest of the federal law was ruled to be “severable” and could stand; in particular the three-judge panel ruled that the “Medicaid expansion is constitutional.” Initially filed in Florida, 26 state attorneys general or governors are co-plaintiffs in this case. The full 304-page ruling is online as a PDF.

This ruling contradicts the June 29 finding by the 6th Circuit Court in Cincinnati (Thomas More Law Center vs. Obama), that upheld the mandate as constitutional, stating “the minimum coverage provision is a valid exercise of Congress’s authority under the Commerce Clause.”

Constitutional experts note that these differing opinions between two appeals courts increase the chance that the U.S. Supreme Court will accept and schedule action on the cases, possibly during its 2011-2012 session.

Study Details 15 State Plans for Dual Eligibles

A new policy brief from the Kaiser Family Foundation outlines 15 state plans to better coordinate care for individuals who qualify for both Medicare and Medicaid, known as “dual eligibles.” These individuals represent 15 percent of Medicaid enrollees and 21 percent of Medicare enrollees, but account for 35 percent and 36 percent of program spending, respectively.

The Affordable Care Act created the Federal Coordinated Health Care Office, now known as the Medicare-Medicaid Coordination Office, in an effort to improve care, quality, coordination and cost-effectiveness for dual eligibles. In April 2011, the Center for Medicare and Medicaid Innovation (CMMI) awarded design contracts of up to $1 million each to 15 states to develop service delivery and payment models that focus on improving care for these dual eligibles: California, Colorado, Connecticut, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Vermont, Washington and Wisconsin.

CMS provided guidelines on two models that will be tested in these states: a capitated integration model, under which health plans would receive a prospective blended rate for all primary, acute, behavioral health, and long-term services and supports; and a fee-for-service integration model, which would use “’simplified and unified’ rules in areas such as supplemental benefits, enrollment, appeals, auditing and marketing.’”

The managed fee-for-service model would place the state in charge of care coordination and delivery of fully integrated Medicare and Medicaid benefits. The state would then be eligible for a “retrospective performance payment” if goals regarding savings, quality and federal Medicaid cost increases are met.