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Patient Protection and Affordable Care Act: State Action Newsletter
August 31, 2012
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Medicaid Expansion: State News
Most states wrapped the 2011 session months ago, but health policy reporters have no shortage of stories. One story that will continue to unfold is the states’ approach to expanding Medicaid. Beginning in 2014, states have the option under the Patient Protection and Affordable Care Act (PPACA) to expand Medicaid to anyone with an income below 133 percent of federal poverty guidelines. The federal government will pay 100 percent of the medical costs for the new beneficiaries until 2016. Federal support will phase down over time and eventually settle at a 90 percent federal match by 2020. Recent state news includes:
Florida’s state economists released a revised estimate of the cost to expand their Medicaid program to approximately 900,000 newly eligible Floridians, mostly older adolescents age 19 and 20, childless adults and parents. The revised estimate is lower than previous calculations, and predicts Florida’s share beginning in 2016 would be $79.2 million. Economists estimate the tab will grow to $337.6 million by 2022, as the state-funded share goes up to the full 10 percent of the cost of new beneficiaries. The PPACA states that the federal share will never be less than 90 percent. Governor Rick Scott said the state will not participate in the expansion, but there is disagreement within the state as to whether this decision would actually save money, as the governor has said.
Texas Governor Rick Perry has also been outspoken in his opposition to expanding Medicaid. Some large county officials are not satisfied with that answer, however, and are looking for a way to capitalize on the federal funds available without the governor’s permission. That arrangement would require the approval of the state legislature and the federal government. In Texas, where one in four people are uninsured—the highest rate in the country—localities, including the six largest counties, often pick up the approximately $2 billion tab for uncompensated care. Hospital system CEOs in the largest counties have been quoted in the Washington Post, saying they are banding together and going public with the idea, which would offer county taxpayers cost-savings to the tune of tens of millions of dollars every year. Half of residents in some areas who receive free or reduced-fee care would be eligible for Medicaid under the PPACA expansion.
Montana is holding interim committee meetings to determine what it will cost the state to participate in the Medicaid expansion. Experts testified that the expansion in Montana could include as many as 57,000 new beneficiaries and cost the state as much as $119 million by 2020.
California Governor Jerry Brown notified lawmakers on August 16 that he intends to call a special legislative session in December to work through PPACA issues. Most likely, considerations for the health insurance exchange will dominate. The special session appears to be more about timing than anything else. If lawmakers pass a bill in special session, it can become law within 90 days. Laws passed in regular session are effective the following year. The state officials wants their exchange to be operational by the January 2014 deadline.
Georgia’s Governor Nathan Deal told reporters at the Republican National Convention that he would not expand Medicaid. He cited the expense and called the federal government’s commitment to shoulder a majority of the costs “unrealistic.”
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Inside This Issue
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HHS Awards Another Round of Exchange Grants
Eight states received health insurance exchange establishment grants from the U.S. Department of Health and Human Services (HHS) on August 23. California, Connecticut, Hawaii, Iowa, Maryland, Nevada, New York and Vermont received grants to support the development of state-based health insurance exchanges. The new grants will build upon federal dollars these states already received.
Level One Establishment Grants range from $3.4 million to $196.4 million and have gone to 34 states and the District of Columbia to date. States can receive multiple Level One grants, which will help build their exchanges by, for example, financing studies, and hiring leadership or other key staff people. States also may apply for Level Two grants, which will help states implement their plans (e.g., financing IT systems, paying for marketing plans, hiring necessary consultants or contractors). The goal for state- and federally-run exchanges is to be open for enrollment by fall of 2013. People who enroll at this time will begin receiving coverage in January 2014.
Both types of grants are available to every state through December 2014. However, states cannot apply for Level Two grants unless they have the legal authority to establish the state exchange. In most states, the legal authority to establish an exchange comes from the legislature. In some cases, the governor has the authority to establish an exchange.
Federal Establishment Grants to States
Source: U.S. Department of Health and Human Services, August 2012.
State Budgets More Stable in 2012 but Still Face Challenges
State budgets are much improved since the end of the Great Recession, but still face considerable challenges as detailed in a new report unveiled at the National Conference of State Legislatures’ (NCSL) 2012 Legislative Summit in Chicago. “State Budget Update: Summer 2012” reports revenue performance is improving, new budget gaps are increasingly rare and state spending has remained largely within budgeted levels. “The economic outlook for the current fiscal year is stable for the vast majority of states,” said Arturo Pérez, program director, fiscal affairs of NCSL. NCSL’s State Budget Update offers an in-depth look at the mixed bag of strengths and challenges facing states in fiscal year (FY) 2013. While revenues are growing and budget gaps are shrinking, state finances are still vulnerable. “State budgets remain susceptible to any economic shocks. The uncertainty at the federal budget level and Medicaid spending are a concern,” said William Pound, executive director of NCSL. “The bottom line: state budgets still face considerable challenges.” Contained within the report are data on state year-end balances, changes in revenues and spending, a state economic outlook for FY 2013, and a review of the strengths and challenges affecting budgets.
What’s In a Name? Maryland Brands its Exchange
The Maryland Health Benefit Exchange launched its official name, logo and website last week. It is called Maryland Health Connection. The Maryland General Assembly enacted health insurance exchange legislation in 2011. Since then, the governing board has been committed to making the Maryland Health Connection operational by January 2014. Last week, Lt. Governor Anthony Brown announced the exchange will be open and ready for public enrollment in October 2013.
Many states working to establish their own health insurance exchanges have similar branding decisions to make in the next year. Governing boards must choose a name, the characteristics of their exchange and settle on a way to market the exchange to consumers. States are looking for creative input and a way to capture what makes their exchange unique in a few words. California solicited the public’s advice on a name earlier this month and Washington hired a contractor to conduct a study on how to brand its exchange.
Primary Care Practices Chosen for Historic Public-Private Partnership
Five hundred primary care practices were recently selected to participate in the PPACA created Comprehensive Primary Care Initiative—a partnership between payers from the Centers for Medicare and Medicaid Services (CMS), state Medicaid agencies, commercial health plans, self-insured businesses and primary care providers. The chosen primary care practices will receive a “care management fee” from CMS and enhanced payments from the participating commercial, state and other federal health plans to provide enhanced, coordinated services to Medicare fee-for-service beneficiaries and other health plan members. According to CMS, public and private health plans in Arkansas, Colorado, New Jersey, Oregon, New York, Ohio, Kentucky and Oklahoma signed letters of intent with CMS to participate in the initiative. The partnership is designed to test innovative payment and service delivery models that have potential to improve the quality of care and lower costs
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