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Policy and advocacy work is increasingly important at the state level. In an effort to keep you informed about the work happening on the ground at the local level, HFA is debuting a quarterly update, “State of the States.” Stay up-to-date and read about the work happening close to you!

The COVID emergency has upended state legislative sessions 鈥 and yet health policy work moves forward in statehouses around the country. Read about recent state actions on Medicaid, ACA Marketplaces, copay accumulators, step therapy, and more.

Oklahoma and Missouri voters approve constitutional amendments to expand Medicaid

Voters have made Oklahoma and Missouri the latest states to expand Medicaid at the ballot box, but the first to do so by amending their state constitutions.

The Medicaid expansion referendum in Oklahoma (State Question 802) passed with only 50.48 percent of the vote (or 6,000 ballots).聽 If fully implemented as required by July 2021, it is expected to provide roughly 200,000 Oklahomans with an affordable coverage option.

The referendum was strongly backed by the state鈥檚 hospital and physician associations, as Oklahoma continues to have the second-highest uninsured rate in the nation (second to Texas) and the third-highest rate of rural hospital closures.聽 According to studies commissioned by the state Medicaid agency, expanding Medicaid under the Affordable Care Act (ACA) is projected to dramatically reduce both of these rates while bringing in more than $1 billion in federal matching funds over ten years.

Governor Kevin Stitt (R) and the Republican-controlled legislature remain staunchly opposed to expanding Medicaid through the ACA and had sought instead to make Oklahoma the first state to gain federal approval to convert Medicaid into a 鈥渂lock grant鈥 that could cap spending per enrollee.聽 HFA submitted public comments earlier this year opposing the state鈥檚 requested block grant waiver, as it would limit benefits, impose new barriers to care (through higher premiums and work reporting requirements), and prevent the state from accommodating a surge of new enrollees during economic downturns (such as is occurring during the ongoing pandemic).

However, State Question 802 prevents the state from imposing restrictions on Medicaid expansion eligibility or enrollment.聽 As a result of its passage, the Governor was forced to withdraw the 鈥渂lock grant鈥 proposal.

Voters in Missouri passed Amendment Two on August 4th by a slightly wider margin (53.2 percent in favor). The referendum likewise prohibits the state from restricting eligibility or enrollment for the Medicaid expansion population.聽 Missouri鈥檚 Medicaid expansion is expected to expand coverage to 231,000 adults and 40,000 children by March 2021.聽 A Washington University analysis predicts it will save Missouri $39 million per year.

Medicaid expansion referendums have successfully passed in six states since 2017 without a single defeat.聽 Nebraska鈥檚 voter-mandated expansion began enrollment on August 1st and received nearly 2,700 applications in first six days (for coverage starting October 1st).

Only a dozen states have yet to expand Medicaid under the ACA.聽 Consumer advocates are seeking to put Medicaid expansion referendums on the 2022 ballot in Florida and Texas.聽 However, passage in Florida would require approval from 60 percent of voters.

Tennessee waiver to 鈥渂lock grant鈥 Medicaid delayed due to COVID-19

The federal Centers for Medicare and Medicaid Services (CMS) announced last week that their review of Tennessee鈥檚 proposal to convert Medicaid into a lump-sum 鈥渂lock grant鈥 program has been indefinitely delayed due to COVID-19.

Federal approval of the waiver would let Tennessee use nearly $8 billion in federal funding to cap Medicaid spending per enrollee, limit benefits below those required by federal law, and impose new barriers to care (including higher premiums, work reporting requirements, and a closed drug formulary).聽 Groups including HFA and other patient organizations submitted nearly 1,800 public comments when Tennessee submitted the waiver to CMS last November. All but 11 commenters opposed the plan as it would dramatically limit beneficiary access to care and make the state unable to handle enrollment surges during economic downturns.

Tennessee was the second state seeking to exercise the new authority the Administration has offered to 鈥渂lock grant鈥 Medicaid.聽 However, Oklahoma withdrew its waiver request after voters approved an expansion of Medicaid (see above).

Georgia governor signs bills limiting copay accumulators and surprise billing

Governor Brian Kemp (R) signed legislation last month requiring pharmacy benefit managers (PBMs) to credit health plan subscribers with the full value of third-party assistance they receive towards their deductibles, copayments, or other cost-sharing obligations for prescription drugs.聽 S.B. 313/H.B. 946 makes Georgia the fifth state (after Arizona, Illinois, Virginia, and West Virginia) to restrict the use of such copay accumulator adjuster programs聽 However, the accumulator prohibition applies only to prescription drugs that do not have a generic equivalent (similar to the Arizona law) and is not effective until July 1, 2021.

The Governor also signed a separate bill that limits when out-of-network providers can balance bill consumers for services rendered at an in-network provider.聽 While nearly 30 states have enacted some sort of 鈥渟urprise billing鈥 protections, the Surprise Billing Consumer Protection Act makes Georgia only the 16th state with protections that are considered 鈥渃omprehensive鈥.

Arizona court blocks voter referendum to protect patients from surprise billing

A lower court in Arizona has blocked a voter referendum from appearing on the November ballot that sought to protect patients from 鈥渟urprise billing鈥 by out-of-network providers. The Superior Court agreed with hospital and business groups that the language of the Stop Surprise Billing and Protect Patients Act was 鈥渕isleading鈥 and that many of the required petition signatures were invalid.聽 The Healthcare Rising Arizona campaign has filed an appeal with the Arizona Supreme Court.

New step therapy protections enacted in Louisiana

Louisiana became the second state in 2020 (after South Dakota) to put new protections into law governing insurer use of step therapy protocols that require consumers to 鈥渇ail鈥 on an insurer-preferred drug therapy before being approved for the therapy prescribed by their physician.聽 Louisiana had been one of 26 states with limited step therapy guardrails.聽 However, H.B. 263 makes it one of 13 states with 鈥渃omprehensive鈥 protections that require insurers respond to a request for an exception to step therapy protocols within 72 hours (or 24 hours in urgent cases).

Colorado governor signs bills enhancing insurance affordability, enrollment

Governor Jared Polis (D) signed legislation in July that will create a new health insurance affordability board in Colorado.

Under S.B. 215, the nine-member board specifically will collect and distribute new assessments on health insurers and hospitals that fund the two-year reinsurance program for which Colorado received federal approval last year. The bill will also allow the board to seek up to a five-year extension of the program, which has been credited with significantly reducing premium increases in the individual market, especially in rural and mountain communities.

The measure also authorizes funding for state premium subsidies to supplement those offered under the ACA for Marketplace consumers earning 100-400 percent of the federal poverty level.聽聽 Consumers would have to be ineligible for ACA subsidies, as well as public health programs (like Medicare or Medicaid). California and New Jersey (see below) are the only states to have similar subsidies in place.

However, S.B. 215 explicitly does not authorize the board to implement any form of public health insurance option within the Marketplace.

Governor Polis also signed H.B. 1236, which allows Coloradans to ask on their state income tax returns for the Marketplace to assess whether uninsured household members are potentially eligible for subsidized coverage.

New Hampshire becomes 14th state to receive federal reinsurance waiver

CMS approved New Hampshire鈥檚 request for a State Innovation waiver to create a reinsurance program that will partially compensate individual health insurers for exceptional claims. The four-year program is predicted to reduce average statewide premiums by 16 percent.

The approval makes New Hampshire the 14th state with a federally-approved reinsurance program.聽 The Maryland Insurance Administration credited its reinsurance program for reducing individual market premiums by 31.4 percent for plan years 2019, 2020, and 2021.

New state subsidies enable New Jersey to reduce premiums for Marketplace consumers

The New Jersey Department of Banking and Insurance announced last week it approved an average 2021 premium increase of 3.3 percent for individual health plans.聽 However, the agency emphasized that most of the roughly 316,000 consumers who purchase individual coverage in the ACA Marketplace will see premiums decline thanks to new state-level subsidies recently authorized by the legislature.

The subsidies supplement the ACA premium tax credits for those earning 100-400 percent of the federal poverty level. 聽DBI predicts they will reduce average monthly Marketplace premiums for eligible consumers by 29 percent (from $164 to $117).聽 California and Colorado (see above) are the only other states that supplement ACA premium tax credits.

The ACA Marketplace (now called Get Covered New Jersey) will transition to full state control when open enrollment starts November 1st.聽 As a result, state regulators used their new discretion to extend the sign-up deadline from December 15th to January 31st.聽 Only California, the District of Columbia, and New York allow open enrollment through January.

Kentucky becomes latest state to assume full control over ACA Marketplace

Kentucky Governor Andy Beshear (D) has notified the federal Centers for Medicare and Medicaid Services that his state will revert to full state control over their ACA Marketplace for the 2022 plan year.

The ACA Marketplace initially started under state control pursuant to an executive order from Governor Steve Beshear (D), the father of the current governor.聽 However, his successor Matt Bevin (R) terminated the state鈥檚 KyNect web portal in favor of the federal web portal at www.healthcare.gov (although other Marketplace functions remained under state control).

Governor Andy Beshear insists that reverting to the federal portal not only increased Marketplace costs but caused fewer uninsured to enroll in coverage. He noted that full state control will also allow the Marketplace to ultimately extend open enrollment beyond the December 15th deadline required for federally-facilitated Marketplaces.

The ACA Marketplace in Pennsylvania, which has completed its transition to state control for the 2021 plan year, confirmed that it will extend open enrollment by a full month (through January 15th).聽 Legislation enacted earlier this year in Maine and New Mexico will fully transition their Marketplaces to state control for 2021, though enrollment deadlines have not been set.

Nevada transitioned to full state control for the 2020 plan year, while New Jersey (see above) is assuming state control for the 2021 plan year (and extending its enrollment deadline through January).

Virginia will move from federal control to a hybrid model for plan years 2021 and 2022, while it creates a state counterpart to www.healthcare.gov that will be in operation for the 2023 plan year.聽 The commonwealth received federal approval last month to start assuming control of ACA Marketplace functions for 2021 open enrollment period, including the discretion to extend of the sign-up deadline. The full transition is expected to be completed in 2023.

As of the 2020 plan year, only 26 states still have a Marketplace that entirely defaults to the federal government.

Florida seeks federal approval to continue limiting retroactive Medicaid eligibility

The Florida Agency for Health Care Administration (AHCA) is asking CMS for permission to continuing limiting retroactive eligibility for Medicaid to only 30 days, instead of 90 days required by federal law.

The Florida legislature initially authorized AHCA to obtain the federal waiver in 2018 and has allowed the agency to secure one-year extensions through June 30, 2021.聽 However, without legislative authorization the agency is now seeking federal approval to continue the policy through June 30, 2024.聽 HFA has signed-on to comments objecting to this change, which can prevent consumers from obtaining critical coverage following a catastrophic medical event.

Massachusetts supports use of drug copay coupons, despite some negative impact

The Massachusetts Health Policy Commission (HPC) issued a July 2020 report to the legislature regarding the use and impact of manufacturer copay coupons on prescription drug spending, utilization, and access.

The HPC鈥檚 research, which was ordered by the legislature in 2018, determined that these coupons increase utilization and spending for several drugs with lower cost generic alternatives and can result in higher premiums.聽 However, it acknowledges that without the coupons, many patients with commercial insurance would be unable to afford clinically necessary medication due to high drug prices or plan cost-sharing.

In these instances, the HPC found that coupons provided critical financial relief and improved adherence, leading to better clinical outcomes.聽 As a result, the report concludes that 鈥渆liminating the availability of coupons at this time 鈥 without substantial protections for patient affordability 鈥 would likely create serious challenges for many patients in the Commonwealth.鈥

Since 2012, Massachusetts law prohibits manufacturers from offering coupons and discounts on any prescription drug that has an 鈥淎B rated鈥 generic equivalent. This law was set to expire on July 1, 2015, however the legislature has issued several extensions, most recently through the end of 2020.

States extend special enrollment periods, premium reprieves due to COVID-19

The state-based Marketplace (SBMs) created pursuant to the ACA created special enrollment periods (SEPs) last spring in response to the COVID-19 pandemic, allowing uninsured residents to sign up for Marketplace insurance regardless of whether they had experienced a 鈥渜ualifying life event.鈥

While these SEPs all expired over the summer, three SBMs have re-opened SEPs into December.聽 Maryland set a December 15th deadline, while California and New York will leave theirs open through December 31st.

The Maryland Insurance Commissioner likewise used emergency regulations to ban individual health plans from canceling or refusing to renew coverage for non-payment of premiums during the COVID19 pandemic.

Federal regulators issued new guidance last month allowing plans in the 38 federally-facilitated Marketplaces to temporarily reduce 2020 premiums during the COVID19 pandemic (so long as the reductions are also permitted under state law).聽 Existing regulations prohibit such midyear changes.

CMS withdraws Medicaid fiscal accountability rule due to COVID-19

The federal Centers for Medicare and Medicaid Services withdrew its controversial Medicaid Fiscal Accountability rule (MFAR) last week in the face of broad opposition from state Medicaid directors and stakeholders. The regulations proposed last fall sought to crack down on states 鈥渕anipulating鈥 Medicaid supplemental payments in order to enhance the amount of federal matching funds they receive.聽 The rule would have imposed new reporting requirements recommended by the Inspector General for the Department of Health and Human Services (HHS) and other federal government watchdogs.

Although CMS claimed the financial impact was 鈥渦nknown鈥, Kaiser Family Foundation and other non-partisan organizations predicted that the MFAR would have a 鈥減rofound impact鈥 on financing and payment policies for some states.聽 As a result, the National Association of Medicaid Directors and most provider groups insisted that these cuts would be untenable at a time when state budgets have been decimated by the dramatic jump in Medicaid enrollment caused by the COVID-19 pandemic and called on CMS to withdraw the rule.

Pennsylvania becomes first state to consider model bill pegging drug prices to Canada

State Senator Tom Killion (R) introduced new legislation this week that would tie prices for the 240 most costly prescription drugs in Pennsylvania to the lower prices charged to Canadian consumers.

The Prescription Drug Cost Reduction Act (S.B. 1315) is based on the model bill unveiled last month by the National Academy for State Health Policy, which other states are expected to follow.聽 Under the legislation, the Department of Insurance would establish the maximum rate to be paid for these drugs each year and require that health insurers pass along to subscribers any premium reductions resulting from the lower medication costs.

Senator Killion echoed NASHP鈥檚 position that states should no longer wait for federal approval of the drug importation waivers sought by several states (although a House bill to authorize a waiver in Pennsylvania has failed to advance).聽 The Senator insisted that his new bill would effectively 鈥渋mport prices鈥 from Canada until the state can import medications. Through both executive order and regulation, the Trump Administration has announced its intent to allow importation of some drugs (not including clotting factor) from certain countries. However, at least four states (Colorado, Florida, Maine, and Vermont) have pending waivers that have yet to be approved.

Marketplace premiums/participation for 2021 remain stable despite pandemic

Initial rate approvals for the 2021 plan year reveal that individual market consumers are likely to see only modest premium increases and may even pay less due to the dramatic reduction in elective procedures during the COVID-19 pandemic.

Deferred care has resulted in substantial profits for major insurers like Blue Cross and Blue Shield, CIGNA, and UnitedHealthcare, leading to significant premium rebates and discounts for the coming year.聽 For example, Blue Cross Blue Shield of Michigan will issue 30 percent premium rebates to consumers in November.

As a result, at least two dozen states have already approved average rate increases of less than five percent, while ACA Marketplace insurers in states like Maryland (see above), Maine, and Pennsylvania will see average premiums decline.聽 Florida, which annually leads the nation in total Marketplace enrollment, approved a 3.1 percent average increase for 2021 (attributing two percent of the cost to COVID-19), while Covered California announced last month that average premiums will increase by less than one percent, by far the lowest since it was created.聽 Individual market consumers in New York will also see a record low increase (1.8 percent on average).

Other less populous states like Colorado, Michigan, Montana, New Jersey, and Rhode Island will see Marketplace premiums climb by only 0-3 percent on average.聽 Washington is expected to approve an average decrease for the second consecutive year with the added competition from a new public option (Cascade Care).

By contrast, Indiana approved one of the nation鈥檚 highest increases in average Marketplace premiums (10.1 percent), even though Anthem consumers will see a slight average decrease (0.3 percent).聽 Louisiana and Tennessee consumers are also like to see individual market premiums increase by 8-9 percent on average.

Increased profitability has led Marketplace insurers in at least 17 states to announce plans to expand coverage areas for 2021, with CIGNA adding at least 80 counties nationwide and Ambetter adding 400.聽 For the first time, all Californians will have a choice of at least two Marketplace plans, while 88 percent can choose from three options.

 

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