Mid-term elections likely to have minimal impact on state health-related initiatives
Overall, last month’s midterm elections largely maintained the status quo at the state-level. No incumbent House Speaker or Senate President lost their seat (only one Governor did so) and the “flip” of four legislative chambers was dramatically below the average of 12 per election over the past 120 years.
Democrats did make a dent for the first time in a dozen years in Republican control over state governorships and legislatures. However, most states remain under “single-party control,” and only two states thus far (Pennsylvania and Virginia) have different parties in control of each legislative chamber.
Republicans still lead in “trifectas” (control of the governorship and both chambers) in 22 states compared to 17 for Democrats (ten states have divided government). However, the party of the President (Democrats) were able to protect all of their state chambers for the first time since 1934. Democrats did “flip” both chambers in Michigan and one chamber each in Minnesota and Pennsylvania, while gaining three “trifectas” by winning open governorships in Maryland and Massachusetts (and holding onto the governorship in Michigan).
Republicans were able to break a Democratic “trifecta” by winning the Nevada governorship but lost their “trifecta” in Arizona when a Democrat won the open governorship seat. (They still hold a slight 26-24 lead in governorships nationwide.)
Republicans still hold a commanding lead in control of overall chambers (57-40) but their loss of chambers reversed a trend that saw them greatly expand state control over the past six election cycles. Democrats also gained “supermajority” status in three legislatures (Delaware, Illinois, and Vermont). However, Republicans secured supermajorities in Florida and Ohio giving them 17 overall compared to only nine for Democrats.
Based on midterm results, prospects for health-related initiatives are likely to remain unchanged for most states. The 11 remaining states that have not expanded Medicaid under the Affordable Care Act (ACA) are likely to remain “opt-out” states as partisan control remains unchanged in each. Bills to ban copay accumulator adjusters (in Michigan, discussed below, and elsewhere) are probably unaffected by the elections, since that issue has been largely non-partisan across state legislatures.
Medicaid expansion ballot initiatives remain undefeated after South Dakota victory
More than 56 percent of voters in South Dakota approved approved Amendment D last month which amends the state constitution to make the state the 39th to expand Medicaid under the ACA. The measure also prevents the state from imposing “greater or additional burdens or restrictions on eligibility or enrollment standards, methodologies, or practices” than traditional Medicaid.
The South Dakota Department of Social Services (DSS) expects that about 52,000 residents will become newly eligible for Medicaid under the expansion, which allows anyone earning up to 138 percent of poverty to enroll starting July 1st. Newly re-elected Governor Kristi Noem (R) stated that she will not stand in the way of implementation. However, state officials acknowledge several barriers may still slow down actual enrollment, including an aging computer system that will need to be dramatically upgraded. Mass Medicaid redeterminations, which will begin when the COVID-19 public health emergency ends (see below) could also tax the ability of existing Medicaid staff to process new applications. (DSS has created a “leadership team” to start adding new staff and technology resources to accommodate the expansion).
South Dakota becomes the seventh consecutive state to overcome legislative opposition to Medicaid expansion via the ballot box (following on the success of referendums in Oklahoma and Missouri in 2020). Despite the popularity of Medicaid expansion among voters, there are very few opportunities for other states to follow suit. Only two of the remaining non-expansion states (Florida and Mississippi) allow citizens to put referendums directly on the ballot and Florida requires referendums be approved by 60 percent of voters—a threshold reached only in Idaho.
Consumer advocates in North Carolina were optimistic that they would be able to expand their Medicaid programs via legislation in 2022. However, legislative leaders recently postponed expansion efforts until 2023 after the House and Senate were unable to reconcile competing proposals.
Medicaid expansion was not the only health care issue where ballot referendums succeeded during the midterms. Oregon became the first state in the nation to enshrine the right to affordable health care in its constitution, when voters narrowly passed Ballot Measure 111 by less than one percent. The referendum was placed on the ballot by the legislature after it passed on a party-line vote with all Republicans opposed. It merely states that “it is the obligation of the state to ensure that every resident of Oregon has access to cost-effective, clinically appropriate and affordable health care as a fundamental right.” However, opponents insist that the measure is purely aspirational as it fails to prescribe how the state should accomplish this goal (and may lead to frequent litigation).
Arizona voters overwhelmingly approved Proposition 209 to set a maximum three percent limit on annual interest rates for medical debt. The measure also increased the threshold up to which certain assets are protected from debt collection (such as homes priced under $400,000) and raised the amount of money in a bank account that is protected from debt collection from $300 to $5,000. It additionally caps the percentage that debt collectors can garnish from wages at ten percent (down from 25 percent).
More states act to protect consumers from copay accumulators
Governor John Carney (D) made Delaware the 15th state (plus Puerto Rico) to prohibit copay accumulator adjuster programs (CAAPs) by signing S.B. 267 into law last month.
The new law broadly protects consumers from all forms of copay accumulators (including copay maximizers) in state-regulated health plans (individual, small group, and state employee plans). Delaware joins Maine and Washington as the only states to pass CAAP prohibitions this year (see State of the States, Spring 2022). Recent data from Avalere Health shows that state CAAP bans now protect 11 percent of all consumers enrolled in commercial health plans.
Bills remain pending in at least five other states (and the District of Columbia) but are not expected to advance anywhere but New York, where newly re-elected Governor Kathy Hochul (D) has until the end of the year to decide whether to sign A. 1741A. The legislature sent this bill to the governor earlier this year but it continues to face efforts to amend it including language that would ban accumulators only when the drug product has no generic alternative (following the compromise that is part of CAAP laws in five other states).
New CAAP bills have already been pre-filed for next session in several states including California, Texas, and Utah and are expected to be considered in about a dozen states (including Colorado, Florida, Massachusetts, Michigan, Minnesota, Missouri, Ohio, Oregon, Pennsylvania, and Wisconsin). HFA and allies continue to advocate for consumer protection against CAAPs and copay maximizers at the federal level as well.
States get brief reprieve from looming expiration of COVID-19 emergency
The U.S. Department of Health Human Services (HHS) will extend the COVID-19 public health emergency (PHE) beyond the January 11, 2023, date on which it is currently slated to expire. It is still unclear whether HHS will issue another 90-day extension (as it has done continuously since the PHE was first declared in January 2020) or extend the PHE for a shorter time period. However, HHS has yet to give states the 60-day advance notice it promised to provide before the PHE expires, signaling its intent to extend the declaration beyond mid-January.
The COVID-19 flexibilities that CMS afforded states during the PHE (including relaxed standards for telehealth) will immediately end when the PHE expires. States must also restart Medicaid and CHIP premiums for designated populations at that time unless they get federal approval to continue suspending them.
Most importantly, the end of the PHE also means states must resume eligibility determinations and renewals for their entire Medicaid population. The Families First Coronavirus Response Act that Congress passed early in the pandemic gave states a 6.2 percent increase in federal matching funds to offset the costs of additional Medicaid enrollees during the PHE. However, in exchange states could not make any changes in Medicaid eligibility or benefits while the PHE remained in place—even if people aged out of Medicaid or they no longer met income limits.
Once the PHE officially ends, CMS will give states only 14 months to complete eligibility redeterminations for their entire Medicaid population—a Herculean task for many states facing record staffing vacancy rates. Because the extra matching funds will disappear in the quarter after the PHE expires, several (including Ohio, Missouri, and Texas) have already decided to tackle the redetermination process within only 3-6 months, increasing the likelihood of erroneous terminations.
Kaiser Family Foundation, the Urban Institute, and HHS itself acknowledge that at least 15 million Americans are likely to lose Medicaid coverage due to this “unwinding” process (nearly 18 percent of all Medicaid enrollees). As a result, most states have developed extensive plans (following HHS guidance) to help mitigate against these coverage losses. These plans are posted on their respective Medicaid program websites and include “toolkits” that stakeholders can use to become “trusted messengers” or “coverage ambassadors” provide reliable information about how Medicaid enrollees can protect themselves from post-PHE coverage losses.
About a dozen states have created specific programs to maintain coverage for those losing Medicaid eligibility after the PHE. These include:
- California, where the state-based Marketplace will automatically enroll anyone losing Medicaid who is eligible for ACA subsidies into silver-tier plans.
- Pennsylvania, where the state-based Marketplace extended special enrollment for those involuntarily losing health insurance coverage from 60 to 120 days.
- Oregon, whose new Bridge Health Program would essentially follow the Basic Health Program option under the ACA (currently used by Minnesota and New York) and temporarily provide coverage for those earning 138-200 percent of poverty who become uninsured after having Medicaid coverage terminated (it would protect about 55,000 of the 300,000 Oregonians expected to lose Medicaid).
The National Association of Medicaid Directors is urging HHS to provide states with “greater certainty” about when the PHE will expire (including extending the promised advance notice from 60 days to 120 days).
CMS approves landmark continuous coverage waiver for Oregon, other states may follow
CMS approved landmark amendments to Oregon’s Section 1115 federal demonstration waiver this fall, which enable it to become the first state to provide continuous Medicaid coverage to children from birth through age six. (At that point, eligibility redeterminations will only be done every two years). The changes will remain in effect for five years.
California, New Mexico, and Washington are seeking similar federal approval as continuous coverage not only greatly reduces the administrative burden on state Medicaid programs but minimizes disruptions in preventive and primary care that frequently occur with children (New Mexico’s waiver documents that up to 40 percent of Medicaid children lose coverage at some point during a given year and have to reapply).
HFA and Pacific Northwest Bleeding Disorders successfully urged Oregon to finally remove its controversial waiver from the federal EPSDT mandate, which requires states cover all medically necessary care for children under age 21. Oregon had been the only state with a waiver allowing it to restrict these benefits for children.
At the urging of HFA and coalition partners, CMS also removed a controversial provision that would have permitted Oregon to exclude coverage for prescription drugs approved using the accelerated approval pathway. This pathway allows FDA to use a surrogate endpoint (or biomarker) to evaluate the safety and efficacy of therapies for serious conditions with unmet needs. By evaluating an endpoint reasonably likely to predict clinical benefit, the pathway allows patients to access treatments at the earliest possible moment while ongoing research is conducted to verify the expected clinical benefit.
CMS has approved several other statewide waivers since June, including bringing the number of states extending post-partum Medicaid coverage up to 26 and adding Idaho to the list of 16 states now using “reinsurance” programs to bring average Marketplace premiums down by double-digits (by compensating insurers for exceptionally high-cost claims).
Open enrollment brings affordable coverage options despite premium increases
Open enrollment in ACA Marketplaces opened this month, enabling consumers to select new coverage for the 2023 plan year. Please check out the open enrollment resources on HFA’s website!
The standard open enrollment period for the 33 states that default to federal government control runs from November 1 through January 15. However, seven of the 18 state-based Marketplaces set their own enrollment dates as follows:
CA: November 1-January 31
DC: November 1-January 31
ID: October 15-December 15
MA: November 1-January 23
NJ: November 1-January 31
NY: November 16-January 31
RI: November 1-January 31
Uninsured residents can enroll at any time during the COVID-19 public health emergency in both DC and New York. Year-round enrollment is also available under the Basic Health Program option (for those earning 138-200 percent of poverty) in Minnesota and New York, as well as for Massachusetts residents who are newly eligible or have not enrolled before. (Native Americans and Alaska natives can also sign-up for Marketplace coverage at any point during the year.)
Across all states using www.HealthCare.gov, the average benchmark – second lowest-cost silver plan – premium is increasing by about four percent for 2023, far above the nominal increases experienced over the past three years. However, actual premium increases vary widely by state. For example, Minnesota expects only a 1.4 percent average increase for all individual plans, while California, Colorado, and Florida are increasing by 6-10 percent on average.
Premium tax credits will offset increases for the vast majority of Marketplace consumers in the 2023 plan year as the enhanced subsidies resulting from the American Rescue Plan Act (ARPA) of 2021 were extended by Congress through 2025. As a result, Marketplace consumers will pay no more than 8.5 percent of their annual income towards premium costs, even if they earn above 400 percent of poverty threshold (the subsidy cap under the ACA.)
According to HHS, the subsidies will enable at least 35 percent of www.HealthCare.gov consumers to purchase gold-tier coverage for a zero-dollar monthly premium in the 2023 plan year. The broader subsidies have largely been credited with spurring record Marketplace enrollment for the 2022 plan year, as well as 40 percent increase in 2023 plan year enrollment.
New Mexico and Washington will become the latest states in 2023 to offer their own state-funded premium subsidies to supplement those available under the ACA (and ARPA). Known as “turquoise” plans in New Mexico, they will be available in the beWellnm Marketplace for households earning up to 300 percent of poverty. For those in the Washington Healthplanfinder, additional subsidies will be available for silver and gold tier consumers earning up to 250 percent of poverty. At least seven other states offer their own subsidies for premiums and/or cost-sharing (including California, Colorado, Massachusetts, and New Jersey).