Prohibiting copay accumulators remains a state priority for 2022
Legislation to prohibit health plans from depriving consumers of any benefit from third-party assistance with cost-sharing obligations has already been pre-filed or drafted in at least a dozen state legislatures for the coming session (as well as the District of Columbia), with pending bills in four states (Michigan, Ohio, Pennsylvania, and Wisconsin) expected to also be re-filed or carried over into the new year.
California, Florida, and New York are the largest of the states seeking to follow the lead of the dozen that have already passed laws prohibiting copay accumulator adjusters-seven of whom were added during 2021. The bills continue to receive very broad bipartisan support and are expected to advance in both Democratically-controlled states like Colorado, Minnesota, and Washington as well as more conservative legislatures in states like Indiana, Missouri, South Carolina, and Utah.
Prohibiting copay accumulators continues to be a top priority of HFA, and many patient and consumer groups as the number of insurers employing them grows exponentially. The latest Employer Benefits Survey from the Kaiser Family Foundation shows that 26-28 percent of all large employer plans now apply some form of copay accumulators for drug benefits, while a 2021 survey of all Affordable Care Act (ACA) Marketplaces compiled by The AIDS Institute shows that copay accumulators are used by more than two-thirds of Marketplace plans in at least 30 states. In fact, in 14 states, every ACA health plan sold on the Marketplace incorporates a copay accumulator.
The National Council of Insurance Legislators recently adopted model legislation introduced by the All Copays Count Coalition (which includes HFA). This legislation has largely been followed by states seeking to circumvent any conflict with 2004 guidance from the Internal Revenue Service (IRS) that has caused confusion in a handful of states with existing accumulator laws (such as Kentucky and Illinois). The 17-year-old IRS guidance has been interpreted by the U.S. Department of Health and Human Services as barring consumers who are insured under a high-deductible health plan (HDHP) paired with a health savings account (HSA) from using third-party cost-sharing assistance until after their deductible is satisfied.
Two ballot initiatives may let South Dakota voters decide whether to expand Medicaid
South Dakotans Decide Healthcare, a statewide consumer advocacy group, announced in November that it has formally submitted a petition for a voter referendum on a constitutional amendment that would require South Dakota to participate in the ACA’s Medicaid expansion.
If certified by the Secretary of State, the measure would appear on the November 2022 ballot. A petition for a related voter referendum, which would expand Medicaid through a new state law, is expected to be submitted by Dakotans for Health in May.
The Republican-controlled legislature sought to head off both measures by placing their own referendum on the June 2022 primary ballot that would require any future ballot initiative be approved by 60 percent of voters instead of a simple majority-a move that can dramatically limit the likelihood of passage. Of the six states that previously expanded Medicaid through ballot initiatives (Idaho, Maine, Missouri, Nebraska, Oklahoma, and Utah), only the Idaho initiative received at least 60 percent of the vote.
Florida had widely been expected to be the other state with a Medicaid expansion initiative on the 2022 ballot. However, an effort by their Republican-controlled legislature to impede that initiative by capping private contributions at $3,000 successfully delayed the referendum until 2024 (even though the cap was ultimately overturned in federal court).
Expanded subsidies cause record surge in Marketplace enrollment for most states
The latest figures from the Centers for Medicare and Medicaid Services show that a record number of Americans have already signed up for ACA Marketplace coverage during the 2022 open enrollment period that started November 1st.
More than 13.6 million Americans are enrolled in Marketplace coverage as of December 15th, an increase of roughly 1.6 million from the 2021 open enrollment period. A full 80 percent of those consumers are from 11 states that have refused to expand Medicaid under the ACA, with Florida and Texas responsible for nearly half that total. Florida continues to lead the nation with nearly 2.6 million enrollees, representing 12 percent of the entire state population and more than one million higher than Texas.
The enrollment spike builds upon the success of the special enrollment period that CMS created earlier this year in response to COVID-19, in which nearly three million Americans signed up for coverage (see State of the States, Summer 2021). CMS attributed the broad gains to the expanded premium subsidies that Congress provided in the American Rescue Plan Act (ARPA). This law ensured that those earning above 100 percent of the federal poverty level (FPL) pay no more than 8.5 percent of their household income on premiums. This caused a 30-50 percent reduction in average premiums, while median deductibles were slashed from $750 to $50. According to CMS, at least 92 percent of those enrolled in federally-facilitated Marketplaces are currently benefitting from these subsidies.
The expanded subsidies are set to expire at the end of 2022. A three-year extension remains part of the Build Back Better legislation that has stalled in Congress. However, ten states have stepped in to provide their own premium subsidies. Â This includes Maryland, which created a pilot program earlier this year under H.B. 780 to subsidize premiums in 2022 and 2023 for young adults (age 18-34) earning less than 400 percent of FPL (about $52,000 per year).
CMS stressed that Marketplace consumers will also have a record 313 insurers offering coverage for 2022 (up from 281 last year), as the number of participating insurers increased for 18 states. The average consumer will have 6-7 insurers from which to choose, compared to only 4-5 in 2021.
The heightened competition among insurers has caused average Marketplace premiums to remain largely stable for 2022, with the lowest-cost bronze plans increasing by only $1 (to $329 per month on average) and declining by 2-4 percent across other metal tiers.
California becomes the fifth state this year to enact new protections against step therapy
Governor Gavin Newsom (D) signed A.B. 347 in October, making California the fifth state (after Arizona, Arkansas, Nebraska, and Oregon) to implement new protections in 2021 against step therapy cost-containment tactics by state-regulated health plans.
The measure largely follows model legislation and protections enacted in at least 31 other states. These laws create a process for consumers to request an exception from step therapy protocols that require them to “fail first” on a drug therapy preferred by the insurer before it will approve a more costly therapy prescribed by their physician. Under A.B. 347, insurers must respond to any exceptions request within 72 hours, or 24 hours in urgent cases (some states like Nebraska have longer time frames).
Step therapy bills are expected to be filed in about ten additional states next year. However, federal legislation that would provide comparable nationwide protections for large-group and self-funded plans has failed to advance in Congress (S.464 was reintroduced earlier this year).
HHS pledges to give states 60-day advance notice before ending COVID-19 emergency
The U.S. Department of Health and Human Services (HHS) has repeatedly assured state Medicaid directors since November that it will provide them with 60 days advance notice before terminating the public health emergency (PHE) due to the COVID-19 pandemic.
The most recent PHE declaration is currently slated to expire in mid-January 2022 and can only be extended in 90-day increments, meaning that HHS has committed to keeping it active until at least mid-March 2022. However, the National Association of Medicaid Directors (NAMD) insists that even that amount of advance notice may be insufficient, given the hundreds of thousands of Medicaid eligibility determinations that many states will be required to immediately resume once the PHE expires. The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 in response to the COVID-19 pandemic paused these redeterminations for the duration of the PHE and prevented states from removing any Medicaid enrollees who become ineligible during that time. Even though HHS guidance recently gave states the full 12 months they requested to complete any backlogs of redeterminations, NAMD still emphasizes that most states will require extensive technology upgrades and training of new staff in order to conduct such mass numbers of redeterminations and potential coverage terminations.
Newly-released data from the CMS shows that Medicaid enrollment among all states also spiked by almost 18 percent from the start of the pandemic through June 2021, further adding to the redetermination burden. As a result, HFA joined with a national coalition of patient advocacy organizations on a September 2021 letter to all state Medicaid directors that outlined methods to best protect enrollees from unwarranted coverage interruptions when the PHE ultimately expires. This included conducting new reviews of enrollees deemed ineligible during the PHE, implementing 12-month continuous eligibility for adults and children, and strengthening transitions to ACA Marketplace coverage.
