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Affordable Care Act: State Action Newsletter
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March 25, 2011
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State Policymakers Want More Medicaid Flexibility
As states struggle to balance their budgets, governors and legislative leaders are calling for more flexibility in the Medicaid program.
Some state leaders would prefer that the Medicaid program be converted to a block grant (lump-sum payment) to the states. Proponents, including Mississippi Governor Haley Barbour and Kansas Governor Sam Brownback, argue this will save the federal government money, while giving states more flexibility to meet the needs of their citizens. Opponents argue that such a move could result in loss of health care coverage for their state’s most vulnerable citizens.
Other state leaders want more flexibility to transform the Medicaid fee-for-service payment model and care delivery systems. Arkansas Governor Mike Beebe wants to create a system that is focused on improving health outcomes while containing costs. Kentucky, Oregon, Minnesota and Massachusetts, are looking to pay-for-performance, medical homes and changes to long-term care services to improve the value of their Medicaid programs. Arizona Governor Jan Brewer believes that, in addition to payment reforms and increased coordination of care, Medicaid needs to take lessons from the private market by implementing benefit reforms and increasing personal responsibility for beneficiaries—many of these actions require approval from the Centers for Medicare and Medicaid Services.
The Utah Legislature passed a measure that moves Medicaid recipients into managed care. It also limits Medicaid spending growth to 8 percent annually. If costs increase slower, the difference would go into a fund in years when growth exceeds 8 percent.
State Legislatures Respond to Health Reform Requirements
NCSL launched the first-of-its-kind database to track the state legislative actions on some of the major provisions in the Affordable Care Act. The 2011 State Legislative Tracking Database includes enacted, pending and failed bills and resolutions. Bills can be searched by state, topic, keyword, status, and/or primary sponsor. Topics in the database include Medicaid, Health Insurance Exchanges, Health Insurance Reform, Health Information Technology, Prevention and Wellness, and Providers and Workforce. The database also includes bills that oppose, opt out or differ from elements of the federal provisions, under the topic Challenges and Alternatives.
This session, lawmakers are responding to the numerous requirements and options outlined for states in federal health care reform, such as establishing health insurance exchanges. As of March 22, 2011, 74 bills in 29 states had been introduced in the 2011 legislative session to establish a health insurance exchange. New Mexico S 38, Virginia H 2434, and West Virginia S 408 have been adopted and sent to the governor. In 2010, California enacted A 1602 and S 900 to establish a health benefit exchange that meets the requirements of the ACA. This session, California legislators are considering at least eight bills to address the “next steps” of implementation, including A 1296, which addresses interoperability between the exchange and Medicaid.
In addition, at least 42 states have filed more than 210 bills that deal with insurance reforms, of which three are now law. Arkansas H 1428, Vermont H 65, Wisconsin S 2a would reform insurance in various ways including regulating plans, rates, and creating state tax credits.
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Inside This Issue
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Kansas Requests a MOE Waiver
On March 9, Kansas Governor Sam Brownback sent a letter to HHS Secretary Kathleen Sebelius requesting a waiver of the ACA’s Medicaid maintenance of effort (MOE) provisions and cooperation and assistance from the Centers for Medicare and Medicaid Services (CMS) as the state develops a plan for a global waiver, also known as a block grant. Brownback writes that the state needs “meaningful flexibility that only a block grant and relief from the maintenance of effort requirements can provide …to be able to provide superior service” to the neediest state residents. As in most states, Kansas’ Medicaid enrollment and spending grew dramatically from 2008 to 2010—by 18 percent and 17 percent respectively. Governor Brownback points out that “these numbers are not sustainable in the world of balancing state budgets” and that the MOE “will lock Kansas into an out-of-date, oversized and unaffordable program.” In his FY 2012 budget, the governor proposed a one-year, one-time increase in Medicaid spending by $265 million for a total of $1.14 billion, which buys time until Kansas develops a plan for its global waiver.
State Legislation Challenges ACA
The Affordable Care Act is not without opposition by some political leaders in the states. Last year, seven states enacted laws, two passed ballot questions creating constitutional amendments and five adopted non-binding resolutions to limit, alter or oppose selected state or federal actions. The 2010 measures mostly focused on the requirement that individuals purchase health insurance, as does the legislation that was proposed and enacted this year.
So far in 2011, at least 120 measures in 38 states have been filed that oppose elements of health reform and/or propose alternative policies. On March 18, Tennessee became the first legislature this year to adopt a law opposing the individual mandate and also prohibiting state officials from acting to impose or enforce the associated penalties that begins in 2014.
The Wyoming legislature approved a proposed constitutional amendment last month, banning penalties or fines on individuals, that will be placed on the November 2012 ballot for voter approval or disapproval. Eigh18 other states have measures that propose state constitutional amendments. A Missouri Senate resolution calls on their state attorney general to file or join a lawsuit challenging the constitutionality of federal health care reform. Additional resolutions are proposed in 15 other states.
Typically, the measures prohibit mandated insurance coverage or its enforcement and prohibit fines or penalties for non-compliance; the language seeks to keep in-state health insurance optional and varies from state to state. Latest details on 2011 challenge legislation are online, using the new NCSL legislation database.
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2011 Proposed State Legislation & Resolutions
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As of mid-March, 38 states have at least 120 measures filed, opposing elements of health reform or proposing alternatives, including:
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Type of Proposal
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# of States |
States |
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State constitutional amendments
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19 |
AL, FL, GA, IN, IA, KS, KY, MD, MS, MT, NJ, NY, ND, OH, SC, TN, WA, WV, WY.
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| Bills to enact state statutes |
32 |
AZ, AR, CO, GA, HI, ID, IL, IN, IA, KS, KY, ME, MI, MN, MO, MT, NE, NH, NM, NC, ND, OH, OK, OR, PA, RI, SD, TN, TX, WA, WV, WY.
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| Advisory or non-binding resolutions |
15 |
AR, FL, IL, IN, IA, KS, KY, MS, MO, MT, NE, NJ, NM, ND, RI, TX. |
Indiana Establishes Exchange through Executive Order
Indiana Governor Mitch Daniels’ first executive order of the year, signed on January 3, established the state’s health benefit exchange. Indiana is the first and only state thus far to create an exchange through executive order. The order requires the Indiana Family and Social Services Administration to work with the state Department of Insurance and others to establish and operate the non-profit exchange. A board of directors will be appointed when the state determines that creating the exchange, rather than allowing the federal government to run it, is an appropriate action. The order specifies that the board of directors will include state officials, members of the General Assembly and other stakeholders. The legislature is also considering S 580 which related to the creation of an exchange.
Four states, California, Massachusetts, Utah and Washington, have created exchanges for individuals and/or small businesses through legislation and 48 states have received planning and implementation grants from HHS to develop the exchanges. The Indiana Governor’s Office of Planning and Budget also received a $1 million HHS grant. Its activities will include: determining if a state-based exchange is beneficial for Indiana by analyzing national data with an eye towards the state’s population; developing and making recommendations about a governance plan for the exchange; and gathering stakeholder input.
Maryland's Small Business Tax Credit Advertising Campaign
On March 15, Maryland announced an advertising campaign to encourage small businesses in the state to take advantage of the new federal tax credits made available through provisions in the Affordable Care Act. State government, Health Care for All (a health advocacy organization) and the state’s largest insurer,
CareFirst BlueCross BlueShield, are partnering on the initiative that will include radio advertisements, an informational web site, distribution of printed information, the opportunity for small businesses to obtain information by “texting,” and more.
Under the ACA, businesses that have fewer than 25 full-time equivalent employees with an average annual salary of $50,000 or less and pay for at least 50 percent of the cost of coverage are eligible for tax credits up to 35 percent of their health insurance costs. An estimated 80 percent of Maryland’s 82,600 small businesses are eligible for health care tax credits. Small business owners and their employees make up a large portion of the uninsured in most states, including Maryland.
“Understanding that the small group market is price sensitive, this tax credit can make a difference for many employers that must weigh whether they can provide health care coverage for their employees,” said Chet Burrell, CareFirst BlueCross BlueShield president and CEO. CareFirst is providing $150,000 for the radio ads, the web site and three consultants to work with small businesses in the Baltimore metro area.
Louisiana Secretary Announces Decision to Opt Out of State Insurance Exchange
On Wednesday, March 23, 2011 Louisiana Health and Hospitals Secretary Bruce Greenstein announced that the state will opt out of establishing a state-based health insurance exchange and will return the $998,416 health insurance exchange planning grant to the federal government. This means that beginning January 1, 2014, the federal government will run the health insurance exchange in Louisiana. The federal government has not yet released guidance on how they will run state exchanges when this part of the law takes effect in 2014.
Announcements
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