August 2018

There was significant federal activity this week with several announcements from the Centers for Medicare & Medicaid Services (CMS). On the Medicaid side, CMS released a State Medicaid Director Letter (SMDL) on budget neutrality for section 1115 demonstration waivers. Our friends and colleagues at Manatt Health have authored an Expert Perspective for State Health and Value Strategies (SHVS) that reviews the SMDL and discusses the implications for states. In addition, the Center for Medicare and Medicaid Innovation Center (CMMI) announced the Integrated Care for Kids (InCK) Model this week, a new child-centered service delivery and state payment model for children covered by Medicaid and the Children’s Health Insurance Program. Finally, on the Marketplace side, CMS awarded $8.6 million in funding to 30 states and the District of Columbia to help strengthen their respective health insurance markets; for more information on these grants and how states can use them, check out this Health Affairs blog post. Updates follow.

With the announcement this week by the Centers for Medicare & Medicaid Services (CMS) of the approval of New Jersey’s Section 1332 waiver to create a reinsurance program, there are now a total of seven states with approved Section 1332 waivers, with six approved to implement reinsurance programs. The New Jersey Department of Banking and Insurance put out a press release announcing the approval, which is projected to achieve a 15 percent reduction in what premiums would otherwise be without a reinsurance program. We have updated our map of state activity, with links to applications, approval letters, and more.

This week, the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule to adopt the risk adjustment methodology that the U.S. Department of Health and Human Services previously established for the 2018 benefit year. In response to the February 2018 New Mexico district court ruling, the proposed rule includes an additional justification regarding the use of statewide average premiums to calculate risk adjustment transfers and explains the reasoning behind operating the federal risk adjustment program in a budget-neutral manner. Comments for the proposed rule will be accepted through September 7, 2018.

This week, the Departments of Health and Human Services, Labor, and Treasury issued a final rule clarifying the definition of, and expanding access to, short-term, limited-duration insurance coverage (short-term plans). The rule extends the federally permissible duration of short-term plans to up to 12 months, clarifies that renewals or extensions are permitted for up to 36 months, and proposes a standard disclosure that would advise consumers that the coverage was not required to comply with the Affordable Care Act’s consumer protections. The new rule is effective 60 days after publication in the federal register, such that short-term plans could be available for sale by early October. State Health and Value Strategies posted an expert perspective on our website authored by our friend and colleague Sabrina Corlette from Georgetown’s Center on Health Insurance Reforms that provides a summary of the final rule and options for states.