Affordable Care Act State Action Newsletter 58

Patient Protection and Affordable Care Act: State Action Newsletter

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June 28, 2013

Medicaid Expansion: Where States Stand Today

Projecting which states will expand Medicaid in 2014 is a moving target. So far, 22 states and the District of Columbia appear ready to expand eligibility beginning Jan. 1, 2014.  Twenty-one states have announced that they will not expand eligibility at this time, three states are implementing or exploring alternatives and four remain undecided. In Wisconsin, the state might expand Medicaid, but not under the ACA regulations. Whether or not to expand Medicaid was the subject of much discussion and debate in state legislatures this year.

The Affordable Care Act (ACA) required states to expand Medicaid by Jan. 1, 2014 to people under age 65 whose family income is at or below 133 percent of the federal poverty guidelines. The income threshold is 138 percent of the poverty level because the first five percentage points of income are disregarded in calculating eligibility.  However, the June 2012 Supreme Court ruling effectively made this requirement an option for states. So far, according to the Centers for Medicare and Medicaid Services (CMS), states face no deadline for deciding when and if they will expand Medicaid, which makes the projections even more indeterminable. Furthermore, states that choose to expand in 2014 may decide to drop the expanded coverage later on. 

For states that choose to expand eligibility, the ACA provides for 100 percent federal matching funds (FMAP) for the newly eligible Medicaid beneficiaries between Jan. 1, 2014 and Dec. 31, 2016. After that, the federal share decreases gradually to 90 percent by 2020, then remains at that level.

United States map of Medicaid Expansion


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NCSL Health Summit in Atlanta

NCSL’s Task Force on Health Reform Implementation will host the 2013 Health Summit, a two-day pre-conference to NCSL’s Legislative Summit in Atlanta.  The Health Summit will feature nine hours of programming Sunday, Aug. 11 and Monday, Aug. 12. 

The American health care landscape is shifting in dramatic ways as a result of health reform and state activities. The nation’s insurance marketplace will have new options and regulations. Medicaid programs face state decisions and federal guidance on expansion options and other alternatives. Participants will learn the latest on how states, insurers, employers, consumers and providers are responding to the fast-paced countdown toward the Jan. 1, 2014 deadlines in the health reform law.

Topics and sessions include Health Care “Marketplaces;” Medicaid; Employer and Consumer Issues; a chance to Meet the Sponsors, including mini-booths featuring health professional associations and interests; and a State Legislative Roundtable.

New Jersey Assemblyman Herb Conaway and Alabama Rep. Greg Wren will lead the discussions as Co-chairs of the Task Force. Attendees will hear from national and state health leaders:

  • Speakers representing the U.S. Department of Health and Human Services including Centers for Medicare and Medicaid Services (CMS) Deputy Administrator and Director Cindy Mann.

  •  The U.S. Office of Personnel Management (OPM) is represented by Susan McNally, Senior Advisor in Congressional and Legislative Affair who will discuss multi-state health plans available through Marketplaces.

  • Kansas Insurance Commissioner Sandy Praeger.

  • Arkansas State Senators Jonathan Dismang and David Sanders, two architects of the premium assistance waiver in Arkansas.

  • Washington State Senator Karen Keiser, an expert on the Basic Health Plan. 

  • The Business Roundtable, represented by Nancy Taylor.

  • National Association of Insurance Commissioners (NAIC) Consumer Representative Tim Jost.

  • AARP Vice-Preseident Elaine Ryan.

  • Leaders from America’s Health Insurance Plans (AHIP) and Deloitte Consulting.

Click here for registration information and to view speaker and session updates. The separate registration fee is waived for NCSL Health and Human Services Committee and Health Reform Task Force Members.

Millions Will Receive Insurance Rebates in Mid-2013

On June 20 the U.S. Department of Health and Human Services (HHS) announced the 2012 health insurance rebates to current policy holders as a result of the ACA’s "medical loss ratio" requirement. This provision applies an “80/20 rule” that requires insurers to spend at least 80 cents of every premium dollar on patient care and quality improvement. The insurer owes a rebate if more than 20 percent of premiums go to profits, marketing, or administrative costs.  The formula is 85/15 percent in the large group market, meaning that 85 percent of premiums must be used for patient care and quality.

Across the 50 states and territories, about 8.5 million consumers will receive an estimated $500 million in rebates for overcharges.   Most rebates will be paid by August this year, averaging around $100 per family.

HHS also calculates that because many insurance companies "operated more efficiently" compared to 2011, another 77.8 million consumers saved $3.4 billion "up front," through paying less than projected in their monthly premiums.  

Feds Release New Rule for Employer Wellness Programs

The federal Departments of Treasury, Labor, and Health and Human Services released the final rule for employer-based health coverage programs on June 3. The rule increases the allowable reward under a health-contingent wellness program offered in connection with a group health plan from 20 percent to 30 percent of the annual cost of health coverage, such as premiums, co-pays or deductibles, for individuals, beginning in January 2014. For wellness programs designed to reduce or prevent tobacco use, the allowable reward is 50 percent of the cost of coverage.

Health-contingent wellness programs require an individual to satisfy a standard, such as attaining a specific health objective or performing an activity to improve health or prevent disease, in order to receive a reward. The rule explains two types of wellness programs: activity-based programs that reward for tobacco cessation, exercise and other healthy behaviors; and outcome-based programs that offer incentives based on meeting health goals. Both program types must offer reasonable alternatives for people unable to meet the original standard. The increased incentives are intended to reduce health costs and the burden of chronic diseases by promoting healthy habits for disease prevention and use of preventive care.

Toolkit for New Jersey ACOs Released

Almost two years ago the New Jersey Legislature created the Medicaid Accountable Care Organization Demonstration Project. The three-year project allows the state’s Medicaid program to pursue projects that coordinate care among providers and patients, in lieu of the managed care model, with the goal of reducing costs. The 2011 plan was designed to test the ACO model.

To help guide the design of New Jersey’s ACO demonstration projects, the Center for Health Care Strategies (CHCS) released a toolkit this month to assist organizations with development. Under New Jersey’s plan, ACOs that participate in the demonstration project must be non-profits that serve at least 5,000 patients, and they must contract with all hospitals, 75 percent of primary care providers and four or more mental health providers in their region. The CHCS report focused on three main steps of development: Building the ACO Framework, ACO Nuts and Bolts, and Constructing the ACO. These are included in templates CHCS has released to the public:  a readiness assessment, a business plan and a work plan.

The Robert Wood Johnson Foundation estimates that 5 percent of the U.S. population uses 60 percent of health resources. Two urban ACO models in Camden and Trenton were already working in the state before the legislation passed. In Camden, from 2002 through 2011, just 1 percent of the city's patients generated 30 percent of emergency room expenses and 20 percent of patients were responsible for 90 percent of emergency room costs. They pioneered the use of care teams to monitor “super-utilizers” who pose a large financial drain on health networks. The Camden Coalition of Health Providers is working to integrate care among its different health providers, and eliminate unnecessary screening and preventable ER visits to reduce this disproportionate burden.

Silver State Exchange Sends Report to Legislature

When the Nevada legislature passed SB 440 in 2011 to create the state’s exchange, it required semiannual updates and reports to the legislature and governor. Some other states also have requirements to report to the legislature.

The latest report for Nevada’s exchange, recently branded the Nevada Health Link, summarizes what the exchange has completed during the past six months. More notably, the report lists information about contractors and their services. For example, Nevada Health Link has contracted with Xerox for business operation functions and with Deloitte to design the state’s eligibility engine. The two companies must work together to ensure that the operational IT programs can “talk” to each other. Testing will occur on the system to ensure that eligibility verification and determinations are accurate.

The report also notes that the exchange has applied for a fourth federal “level one establishment grant” to pay for costs associated with new CMS requirements and to pay for services from the federal data services hub. State exchanges must link to the federal data hub to verify information such as citizenship and income. The hub consists of multiple federal agencies, including the U.S. Department of Health and Human Services, Homeland Security and the Internal Revenue Service.

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