Patient Protection and Affordable Care Act: State Action Newsletter

Sept. 14, 2012

States Grapple with Approaching Essential Health Benefit Deadline

Health plans offered both inside and outside of the health insurance exchanges as of Jan. 1, 2014, must offer a comprehensive package of Essential Health Benefits (EHB) based on provisions in the Patient Protection and Affordable Care Act (PPACA). EHBs are required to include items and services within at least the following 10 broad categories:

• Ambulatory patient services
• Emergency services
• Maternity and newborn care
• Mental health and substance use disorder services including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative (such as speech-language treatment or physical or occupational therapy) services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services including oral and vision care

In December, the U.S. Department of Health and Human Services (HHS) announced that states could choose their EHB package from one of the following benchmark health insurance plans:  one of the three largest small group plans in the state by enrollment; one of the three largest state employee health plans by enrollment;  one of the three largest federal employee health plan options by enrollment; or the largest HMO plan offered in the state’s commercial market by enrollment.

According to a HHS Bulletin, states must choose their EHB package by Sept. 30.  As of September 10, just two states have made their choices. California selected the largest small group, by Kaiser-Permanente, and Washington selected the largest small group, by Regence BC/BS. Eight other states, Arkansas, Colorado, Nevada, Oregon, Rhode Island, Utah, Virginia, Vermont and the  District of Columbia have made a preliminary recommendation. 

Several states are actively working on EHB decisions including:
Colorado made a preliminary recommendation (Colorado’s largest small group plan,  Kaiser Ded/ CO HMO).
District of Columbia made a preliminary recommendation (D.C.’s third largest small group plan, BlueCross BlueShield CareFirst Preferred and has an open public comment period until Sept. 28).
Hawaii held a public meeting on Sept 10.
Illinois has an open public comment period until Sept. 19.
Nevada had a public meeting on Sept. 13.
Utah made a preliminary recommendation (PEHP’s Utah Basic Plus State Employee Health Insurance Plan).  
Visit NCSL’s  online State EHB tracking table of additional actions, updated weekly. 

Co-Op Insurance Plans Underway in 20 States

The federal health reform law (Section 1322) encourages the creation of new health insurance cooperatives by distributing up to $6 billion in funding to private, nonprofit entities under the Consumer Operated and Oriented Plan (CO-OP) program. Based on existing programs in several states, a health care CO-OP is governed and run by its members and is subject to state and federal laws governing all insurers. Unlike traditional insurance, any profits earned are to be used to either lower premiums or to improve benefits.  Beginning Jan. 1, 2014 CO-OP insurance can be offered through Health Benefit Exchanges or outside of an Exchange.

CO-OP loans are available to entities in all 50 states and D.C. through Dec. 31. Last month, CMS announced additional loan grants of $160 million, for a total distribution so far of $1.56 billion. Under CMS guidelines, the federal loans are made only “to private, nonprofit entities that demonstrate a high probability of financial viability.” All CO-OPs receiving loans are selected on a competitive basis based on external independent review. Existing programs and state and local governments are not eligible for this funding; details are provided in an NCSL report on co-ops.  As of Sept. 1,  20 CO-OP proposals have been funded:

Source: CMS CO-OP Fact Sheet, August 31, 2012

Inside This Issue

• States Grapple with Approaching Essential Health Benefit Deadline
• Co-Op Insurance Plans Underway in 20 States
• CMS Awards Demonstrations to States for Dual-Eligibles
• Update on Massachusetts Cost Control Efforts

CMS Awards Demonstrations to States for Dual-Eligibles

Massachusetts is the first state to enter into a memorandum of understanding with the Centers for Medicare and Medicaid Services (CMS) as part of the Financial Alignment demonstration for people dually eligible for Medicare and Medicaid. The goal of the demonstration and Massachusetts’ plan is to make it easier for patients to navigate the complex worlds of both Medicare and Medicaid, improve care and save money.  

Under the Massachusetts plan, the state and CMS will contract with “Integrated Care Organizations (ICOs).”  These ICOs will coordinate care for dually eligible enrollees and be accountable for their care. According to the plan, people who participate in the demonstration will have an expanded set of benefits, including dental and vision care.

Twenty-five states  (Arizona, California, Colorado, Connecticut, Hawaii, Idaho, Iowa, Illinois, Massachusetts, Michigan, Minnesota, Missouri, New York, North Carolina, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington and Wisconsin) have submitted proposals to CMS to participate in the Financial Alignment Demonstration; 15 states will be selected to participate in the demonstration. Some hoped the program would be expanded because of the interest from states.  However, Melanie Bella, director of CMS's Medicare-Medicaid Coordination Office, which administers the program, told a congressional committee in July that it would not expand the program.  This was welcome news for critics who worried a larger pilot would test CMS’s capacity to ensure the demonstration’s success.  

Announcements

• State Actions Newsletter is online: Archive newsletters are available on NCSL’s website.

• Check out NCSL’s webpage on State Actions to Implement Health Insurance Exchanges.

• The 2012 Federal Health Reform: State Legislative Tracking Database continues to track state actions.