Weekly Updates

Breaking news from Friday: the partial government shutdown has prompted an appeals court judge to issue a stay in Texas v. Azar lawsuit. For an analysis of where the case stands and implications of the federal shutdown more broadly on health care, listen to this Kaiser Health News’ What the Health? podcast (start at 1:12).

Over the holidays, Judge Reed O’Connor issued a stay and partial final judgment in Texas v. Azar. Doing so allowed the parties to immediately appeal his recent decision to invalidate the entire Affordable Care Act (ACA) to the Fifth Circuit Court of Appeals. The December 30th ruling ensures the ACA remains fully in effect in all 50 states and DC. Following the decision, on January 3rd. 16 states and the District of Columbia filed an appeal to the Fifth Circuit Court of Appeals. Check out this Health Affairs blog post for background on the case and an update on the legal proceedings.

Even though the end of the year is near, last week was not a slow news week. Late Friday the 14th, a federal district judge in Texas issued a highly anticipated decision in Texas v. Azar, ruling that the Affordable Care Act’s (ACA) individual mandate to maintain health coverage is unconstitutional, and as a result the entire ACA is unconstitutional. Despite the ruling, the ACA is still the law of the land and most legal experts agree that this is only the first step in what is likely to be a long legal road that may end in the Supreme Court; consumers should be assured that if they enroll now they will have coverage in 2019. Heather Howard answers some burning questions related to the ruling and its implications in the latest Woodrow Wilson School Reacts post.

Friday was the very last day of open enrollment for HealthCare.gov and we are saw a big push by states as they remind residents of the deadline to sign up for health insurance. As of the enrollment numbers released last week, 4.13 million people have signed up for plans through HealthCare.gov as of December 8, of which 1.1 million are new consumers.

As we enter the last week of open enrollment for states operating health insurance marketplaces through healthcare.gov, the Centers for Medicaid & Medicare Services (CMS) released their weekly enrollment snapshot for week five. To date, nearly 3.2 million people have selected plans, of which 812,263 are new consumers; this is down from the 3.6 million people who had selected plans by this time last year. While there are many potential drivers of lower enrollment, we will likely have to wait till the dust settles on this open enrollment period to better understand the dynamics. However, as profiled below, several states that run their own state-based exchanges, and have extended open enrollments, are seeing sign-ups that are higher than last year.

Section 1332 waivers were in the health care policy news spotlight this week. On Thursday, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma announced the release of four waiver concepts designed to illustrate how states can waive certain Affordable Care Act provisions under Section 1332 of the law. For more information about the four waiver concepts, see this CMS fact sheet and a discussion paper, which describes each concept in detail. Manatt Health have written an Expert Perspective for State Health and Value Strategies on the new waiver concepts that breaks down the potential new options for states. Updates follow.

Last Monday, the Treasury Department and the Internal Revenue Service released additional guidance regarding health reimbursement arrangements (HRAs) and other account-based health benefits. The guidance addresses the interaction between the tri-department HRA proposed regulations released October 23 and existing provisions such as the employer mandate. State Health and Value Strategies will be addressing the implications for states of these proposals in a webinar on Wednesday, November 28.

During the opening plenary at the National Association of Medicaid Directors fall conference, HHS Secretary Alex Azar announced a new opportunity for states to receive authority to pay for short-term residential treatment services in an institution for mental disease (IMD) for Medicaid beneficiaries with serious mental illness. Following Secretary Azar’s speech, the Centers for Medicare & Medicaid Services (CMS) released a letter to State Medicaid Directors outlining both existing and new opportunities for states to design innovative service delivery systems for adults with SMI and children with serious emotional disturbance. 

Last week, on the state-level, three states approved expanding their Medicaid programs and the results of several gubernatorial elections signal potential changes in state health policy. For a synopsis of what the election results mean for health care, see this Health Affairs blog post. In addition, the Kaiser Health News podcast What the Health? includes an analysis of midterm election results. Also last week, the Centers for Medicare and Medicaid Services (CMS) announced a proposed rule related to program integrity of Exchange operations. This Health Affairs blog post summarizes this rule, including implications for states. CMS also announced a proposed rule for Medicaid and Children’s Health Insurance Program (CHIP) managed care programs. CMS released a fact sheet explaining the goals of this proposed rule. Updates follow.

Open enrollment has officially begun! To kick off the OEP season, Georgetown University just launched an updated Navigator Resource Guide this week. The guide provides information on recent policy changes, a list of enrollment tools for consumers and assistors, and answers to hundreds of frequently asked questions (FAQs), ranging from questions about eligibility for marketplace subsidies to post-enrollment issues and small employer coverage. In addition, Kaiser Family Foundation put together a list of over 300 FAQs for consumers, navigators, brokers and other assistors. The FAQs cover a wide range of topics, including the 2019 repeal of the individual mandate tax penalty and a new section on short-term health insurance policies. Updates follow.

The Departments of Health and Human Services and Treasury (“the Departments”) released updated guidance setting forth their interpretation of Section 1332 of the Affordable Care Act (ACA), which authorizes states to waive certain provisions of the ACA. The guidance details new principles to be advanced by state waivers and outlines how the Departments will review waiver applications going forward. The guidance is effective immediately, though there is a 60-day comment period. For a summary of the guidance and implications for states, see this Health Affairs blog post.

The Centers for Medicare & Medicaid Services (CMS) proposed this week requiring drug manufacturers to include the price of drugs in television ads. Under the proposed rule, prescription drug manufacturers would be required to post the Wholesale Acquisition Cost for drugs covered in Medicare or Medicaid in direct-to-consumer television advertisements. Kaiser Health News has an article that details the proposal.

The Centers for Medicare & Medicaid Services (CMS) announced this week that the average premiums for individual health coverage on healthcare.gov, the federal marketplace, will drop by 1.5 percent for 2019, marking the first-time average premiums have fallen since the implementation of the federal exchange in 2014. Kaiser Health News published an article that examines the factors contributing to the average decline in premiums.

Also this week, CMS took several steps to support both Florida and Georgia in response to Hurricane Michael. Health and Human Services Secretary Alex Azar declared a public health emergency in Florida on Wednesday, before Michael made landfall, and a public health emergency in Georgia on Thursday. Our thoughts are with all those who are struggling in the aftermath of the hurricane and working in both states to care for affected residents. Updates follow.

On Wednesday last week, the Senate passed legislation, H.R. 6 - SUPPORT for Patients and Communities Act, to address the opioid epidemic, which now goes to President Trump for his signature. The Kaiser Health News podcast What the Health? walks through the details of the final version of the bill (starts at 1:27), and the Addiction Policy Forum produced a summary that outlines the 41 key components of the opioid package. Also, on Monday State Health and Value Strategies hosted a webinar, facilitated by experts at Manatt Health, on the implications of the proposed public charge rule for Medicaid. The  proposal would change how the Department of Homeland Security determines whether immigrants are “likely at any time to become a public charge,” which may put immigration status at risk. The slide deck and recording are on SHVS's website.

This week began with the release of a proposed rule by the Department of Homeland Security (DHS) that seeks to change how DHS determines whether immigrants are dependent on the government for financial support. On Monday, October 1, State Health and Value Strategies hosted a webinar, facilitated by experts at Manatt Health, on the changes proposed by DHS in determining whether immigrants—when seeking admission to the United States, an extension of their stay, or status change to become a legal permanent resident—are “likely at any time to become a public charge,” which may put immigration status at risk, and the implications of the proposed rule for Medicaid. Updates follow.

This week, U.S. Surgeon General Jerome Adams released a new “spotlight” report on opioid addiction, Facing Addiction in America: The Surgeon General’s Spotlight on Opioids, which calls for a cultural shift in the way Americans talk about the opioid crisis and recommends actions that can prevent and treat opioid misuse and promote recovery. The Spotlight also provides the latest data on prevalence of substance misuse, opioid misuse, opioid use disorder, and overdoses. And, in case you missed it, this week the U.S. Department of Health and Human Services (HHS) also awarded over $1 billion in opioid-specific grants to states to help combat the crisis. The awards support HHS's Five-Point Opioid Strategy, which was launched last year and enhanced this week.

As southern coastal states prepared for hurricane Florence this week, Health and Human Services Secretary Alex Azar declared public health emergencies in North and South Carolina and Virginia. The Centers for Medicare and Medicaid Services (CMS) announced it is working to keep hospitals and other health care facilities open and running and has also waived certain Medicare, Medicaid and Children’s Health Insurance Program requirements. We are thinking of all those effected by the storm and the folks in state government working hard to ensure the safety of people in their state.

The Affordable Care Act (ACA) was back in court this week in two separate cases. On Wednesday, oral arguments were presented in Texas v. Azar, a lawsuit brought by state attorneys general in 20 states who are seeking a preliminary injuction against some or all of the ACA. The Kaiser Health News podcast What the Health? opens this week with an analysis of the case (starts at 1:06). Also this week, a federal judge ruled that the Montana Health Co-Op is entitled to $5.2 million that it would have received in the final quarter of 2017 if the Trump administration had not eliminated cost sharing reduction payments. The implications of this decision are discussed in a Health Affairs blog post by Katie Keith.

In addition to the recent federal activity we covered in previous updates, see this Health Affairs blog post for a brief synopsis of federal guidance for health insurers you might have missed these last few months. Updates follow.

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.

This week, the Centers for Medicare and Medicaid Services (CMS) issued a final rule to readopt the risk adjustment methodology for the 2017 plan year. With this new rule, CMS will resume the risk adjustment program and begin collecting and paying out about $10.4 billion in risk adjustment transfers for 2017. For a summary of the final rule, check out this Health Affairs blog post.

In light of the federal district court’s decision in Stewart v. Azar, the Centers for Medicare and Medicaid Services (CMS) announced it is re-opening the comment period for Kentucky’s Section 1115 waiver application, which included work/community engagement requirements. In the announcement, CMS noted that “[a]lthough an additional public comment period is not legally required, CMS is conducting one to ensure that interested stakeholders have an opportunity to comment on the issues raised in the litigation and in the court’s decision.” The agency is accepting comments through August 18, 2018. To learn more about the Stewart v. Azar decision and its implications for states, join us for our upcoming webinar (see below for the link to register).

This week, the Centers for Medicare and Medicaid Services (CMS) issued a press release announcing the suspension of about $10.4 billion in risk adjustment (RA) payments for 2017 until litigation around the federal RA program is resolved. The announcement was in response to a February 2018 New Mexico district court ruling that the government’s methodology for implementing the RA program was “arbitrary and capricious.” For a summary of the press release and its related implications, check out this Health Affairs blog post and a blog post by our friend and colleague, Sabrina Corlette from Georgetown University.

This week, the Centers for Medicare and Medicaid Services (CMS) released a series of three new reports on marketplace enrollment and trends. The reports include data on: Effectuated Exchange enrollment for 2017 and 2018; overall trends on the operational and programmatic performance of the Exchange, and trends in subsidized and unsubsidized individual market enrollment from 2014 to 2017. A comprehensive summary of the reports, including details on the role of agents and brokers, can be found in this Health Affairs blog post.

The cost of health care was the subject of a hearing this week held by the Committee on Health, Education, Labor and Pensions. In case you missed it, you can watch a recording. The hearing was the first in a series on how to reduce the cost of health care in the United States and featured testimony from Niall Brennan, head of the Health Care Cost Institute, who argued that price increases are to blame for rising costs rather than an increase in the utilization of care. Also on the topic of the cost of health care in the U.S., Leavitt Partners released a report this week, the product of a combined quantitative and qualitative analysis of factors that may be influencing total cost of care in health care markets across the United States.

This week, the U.S. Department of Labor (DOL) released a final rule that alters the way that association health plans (AHPs) are regulated. The rule was accompanied by a press release and a new webpage. The DOL rule significantly loosens the conditions under which a group of employers – or the self-employed – can join together under an AHP and be considered a “single employer” under the Employee Retirement Income Security Act (ERISA). Such AHPs would be regulated under federal law as large-group coverage, making them exempt from Affordable Care Act (ACA) and other federal and state requirements that apply only to the individual and small-group insurance markets. The final rule includes an implementation timeline and a pathway for AHPs to gain single employer status under ERISA. It also clarifies rules against health discrimination and which ACA protections AHPs are still subject to. Our friend and colleague Sabrina Corlette, from Georgetown University, provides an Experts Perspective of the rule and notes key implications states must consider when regulating AHPs.

The Centers for Medicare & Medicaid Services (CMS) announced the release of guidance that provides states with information on how CMS can support their efforts to address the opioid crisis. The guidance consists of an informational bulletin on the design of approaches to covering treatment services for Medicaid eligible infants with Neonatal Abstinence Syndrome and a state Medicaid Director letter that advises states on which funding authorities may support health information technology efforts that could be used for the prevention and treatment of negative opioid outcomes. Next week State Health and Value Strategies is hosting a webinar on the status of state efforts to secure waivers to use federal Medicaid funding to provide care in Institutions for Mental Disease.

The Affordable Care Act (ACA) is in the news this week with the announcement by the U.S. Department of Justice (DOJ) that it will not defend the ACA’s constitutionality and is siding with Texas and 19 other states in a lawsuit filed earlier this year. The lawsuit being pursued by Texas and other states claims that Congress' decision to eliminate the ACA’s individual mandate penalty requires that all or some provisions of the law be ruled invalid. In a brief filed yesterday by the DOJ in response to the lawsuit, the administration argued that "this Court should hold that the ACA's individual mandate will be unconstitutional as of January 1, 2019, and that the ACA's guaranteed-issue and community-rating provisions are inseverable from the mandate." For further analysis of the DOJ’s actions, check out this take in a Health Affairs blog post on the subject. Updates follow.

This week State Health and Value Strategies (SHVS) published a new issue brief, Toward Hospital Global Budgeting: State Considerations, which digs into an innovative approach to shift hospitals from paying for volume to paying for value. The issue brief includes case studies of three states: Maryland, which pioneered global budgeting; Pennsylvania, which is preparing to launch its model; and Vermont, which offers an interesting twist on the concept. I hope the issue brief provides you with some ideas of how global budgeting might be a tool for payment reform in your state.

This week the Congressional Budget Office (CBO) released updated estimates of their baseline projections of the federal costs for premium subsidies under the Affordable Care Act for the 2018 to 2028 period. A few key takeaways: CBO previously estimated that repealing the mandate would reduce coverage by 13 million in 2027 and has now revised its estimate to around 8.7 million. Furthermore, CBO estimates that premiums will be “about 10 percent higher in 2019" because of the individual mandate repeal. For insights into CBO’s updated health insurance model, consider tuning in to a presentation on June 19 by CBO staff at the Bipartisan Policy Center which will be followed by a panel of budget and health care policy experts sharing their initial reactions to the proposed changes to the model.

This week State Health and Value Strategies (SHVS) published Medicaid Buy-In: State Options, Design Considerations and Section 1332 Waiver Implications, which explores opportunities for states to leverage their Medicaid programs to strengthen coverage. SHVS hosted a companion webinar on Tuesday (if you missed it, you can download the slide deck and the recording) and has created a map to track state activity around Medicaid buy-in programs. The map includes links to relevant legislation and groups states by whether they are pursuing a buy-in program or have established a task force to study the impact of a buy-in program.

Today President Trump gave a much anticipated speech on reducing the cost of prescriptions drugs and released American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs. The blueprint outlines actions that the Department of Health and Human Services (HHS) will take including advancing generics to increase competition and exploring changes to the Medicaid Drug Rebate Program rules. Also this week, the Centers for Medicare & Medicaid Services (CMS) released its Rural Health Strategy, an interagency effort that seeks to improve access and quality of care for rural Americans.

Secretary of Health and Human Services Alex Azar addressed the World Health Care Congress this week and focused his remarks on value-based care and the role of the Department of Health and Human Services (HHS) in transforming the health care system in the United states “into one that pays for value.” Azar outlined four areas of emphasis for HHS: health information technology; health care pricing transparency; new models in Medicare and Medicaid; and reducing barriers to care coordination.

There was a flurry of activity surrounding the opioid epidemic in Washington D.C. this week as both the House and Senate advanced measures, which have states optimistic about the prospect of additional federal funding for the crisis. The Kaiser Health News Podcast, What the Health (starts at 7:11) has a good summary of the activity in Congress this week. Additionally, the Centers for Medicare & Medicaid Services (CMS) Innovation Accelerator Program announced it is launching a new technical support opportunity for state Medicaid agencies through the Reducing Substance Use Disorder program area with an information session scheduled for May 2.

This week saw several states moving forward with Section 1332 waiver applications. On Wednesday, the Office of the Commissioner of Insurance in Wisconsin submitted the state’s 1332 waiver application to implement a reinsurance program, and today, Maryland posted its draft Section 1332 application and announced it will hold four public hearings.

On Monday the Centers for Medicare & Medicaid Services (CMS) issued the final 2019 Payment Notice Rule. Our colleague Sabrina Corlette from Georgetown’s Center on Health Insurance Reforms has authored an expert perspective for State Health and Value Strategies that focuses on the major provisions of the Payment Notice and accompanying guidance documents that have significant implications for states.

This week the Centers for Medicare & Medicaid Services (CMS) released the final report of enrollment activity for the individual marketplaces during open enrollment for plan year 2018.

Our friends, and insurance market technical experts, at Georgetown’s Center on Health Insurance Reforms, have produced a new report that examines how states regulate coverage arrangements that do not comply with the Affordable Care Act’s (ACA) individual health insurance market reforms. Sabrina Corlette, one of the report’s authors, recently authored an Expert Perspective and led a webinar for State Health and Value Strategies on the proposed rule on short-term limited duration insurance, one of the coverage options that do not comply with the ACA profiled in the report.

Today marks the eighth anniversary of the enactment of the Affordable Care Act (ACA). The ACA has proven to be resilient, and despite efforts to repeal and replace it over the past eight years, the law’s fundamental elements remain in effect. In other news today, President Trump signed into law the $1.3 trillion spending package. The omnibus bill does not include any funding to stabilize the Affordable Care Act individual markets, but it does include additional funding for the opioid crisis and mental health care.

Following the unveiling of President Trump’s initiative to address the opioid crisis, a new State Health and Value Strategies publication is available. Medicaid: The Linchpin in State Strategies to Prevent and Address Opioid Use Disorders by Manatt Health that illustrates the important role of Medicaid in addressing the crisis.

This week State Health and Value Strategies published a new issue brief, State Reinsurance Programs: Design, Funding, and 1332 Waiver Considerations for States by Manatt Health that provides a roadmap for states contemplating development of a state-based reinsurance program under 1332 waiver authority. And for those states ready to get to work on a 1332 waiver application to implement a state reinsurance program, SHVS has created a template to streamline the application process. As new states pursue section 1332 waivers, we continue to update our map with the latest activity.