State of the States: July 2020

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!

Surge in coronavirus cases increases concerns about rationing of care

At least 40 states are experiencing a surge in COVID-19 infections, hospitalizations, and deaths subsequent to reopening of their economies.  In 13 of these states, cases have more than doubled, forcing governors in “hot spots” like Arizona, California, Florida, and Texas to pause re-openings or renew restrictions.
Arizona became the first state to activate new triage guidelines governing how intensive care and ventilators may be rationed only for patients deemed most likely to survive, and both Florida and Texas face similar decisions as major hospitals have little or no remaining capacity of adult ICU beds.  HFA has signed on to letters expressing concern that these guidelines (also known as “crisis standards”) may unlawfully discriminate against or target persons with costly medical conditions.  The Office of Civil Rights for the U.S. Department of Health and Human Services has already compelled four states (Alabama, Connecticut, Pennsylvania, and Tennessee) to alter their guidelines to ensure persons with COVID-19 are not automatically denied care based on age or disability.

States extend special enrollment periods for COVID-19

Several state-based Marketplaces have further extended their deadlines for special enrollment periods created in response to COVID-19.  The deadline in Maryland and New York now runs through July 15th.  Massachusetts extended through July 23rd while California (which has already enrolled more than twice as many consumers as this period last year) added another month through July 31st.  Vermont and the District of Columbia have the latest deadlines (August 14th and September 15th respectively).
All of the Democratic Attorneys General are backing a federal lawsuit filed in June by the city of Chicago that would force the Trump Administration to create a comparable special enrollment period for the ACA Marketplaces facilitated by the federal government.

Medi-Cal avoids deep budget cuts due to COVID-19…for now

Lawmakers in the California Assembly and Senate approval a budget deal shortly before the July 1st start of the fiscal year that avoids most of the severe cuts in Medi-Cal benefits and payment sought by Governor Gavin Newsom (D) in response to severe budget deficit created by the COVID-19 pandemic.  These cuts would have included the elimination of entire categories of optional benefits if additional federal relief was not provided.
HFA has confirmed that coverage for hemophilia and bleeding disorder treatments under both of California’s Title V programs for children (California Children’s Services) and adults (Genetically Handicapped Persons Program) remain unaffected.

More states transition away from federal control over ACA Marketplaces

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.  However, his successor Matt Bevin (R) terminated the state’s KyNect web portal in favor of the federal web portal at (although other Marketplace functions remained under state control).
Governor Beshear insists that the switch not only increased Marketplace costs but caused fewer uninsured to enroll in coverage.  Full state control will also allow the Marketplace to ultimately extend open enrollment beyond the December 15th deadline required for Marketplaces using the federal web portal.
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 15, 2021).  Legislation enacted earlier this year in Maine and New Mexico will fully transition their Marketplaces to state control for 2021, though an enrollment deadline has not been set.
(Nevada and New Jersey both transitioned to full state control for the 2020 plan year).  Virginia will move from federal control to a hybrid model for plan years 2021 and 2022, while it creates a state counterpart to the will be in operation for the 2023 plan year.
As of the 2020 plan year, only 26 states still have a Marketplace that entirely defaults to the federal government.

Bills limiting copay accumulators and surprise billing advance to Georgia governor

The Georgia House and Senate passed legislation last month requiring pharmacy benefit managers (PBMs) to credit health plan subscribers with the full value of third-party assistance they receive with deductibles, copayments, or other cost-sharing obligations for prescription drugs.  If signed by the governor, S.B. 313/H.B. 946 would make Georgia the fifth state (after Arizona, Illinois, Virginia, and West Virginia) to protect patients by restricting the use of such copay accumulator adjuster programs.
Governor Brian Kemp (R) is also weighing another bill that would limit when out-of-network providers could balance bill consumers for services rendered at an in-network provider.  While nearly 30 states have enacted some sort of “surprise billing” protections, the Surprise Billing Consumer Protection Act would make Georgia only the 16th state with protections that are considered “comprehensive”.

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 first fail on an insurer-preferred drug therapy before being approved for the therapy prescribed by their physician.  Louisiana had been one of 26 states with limited step therapy guardrails.  However, H.B. 263 makes it one of 13 states with “comprehensive” protections that require insurers to respond to a request for an exception to step therapy protocols within 72 hours (or 24 hours in urgent cases).

Oklahoma voters approve Medicaid expansion

Voters in Oklahoma narrowly decided on June 30th to require state agencies to expand Medicaid under the Affordable Care Act (i.e., to cover all low income adults regardless of disability or whether they have young children).  The referendum (State Question 802) makes Oklahoma the fifth state to expand Medicaid through the ballot box, but only the first to do so by amending the state constitution.
If fully implemented as required by July 2021, the expansion is expected to provide roughly 200,000 Oklahomans with an affordable coverage option. The referendum was strongly backed by the state’s 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.  Expanding Medicaid is projected to dramatically reduce both rates while bringing in more than $1 billion in federal matching funds over ten years (saving the state an estimated $464,000), according to studies commissioned by the state Medicaid agency.
Governor Kevin Stitt (R) and the Republican-controlled legislature have remained staunchly opposed to expanding Medicaid through the ACA and are instead trying to make Oklahoma the first state to gain federal approval to convert Medicaid into a “block grant” that could cap spending per enrollee.  HFA submitted public comments earlier this year opposing the state’s block grant request, 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.
Only 13 remaining states (including Florida and Texas) have yet to expand Medicaid under the ACA.  However, voters could make Missouri the next state to expand when a similar ballot referendum will be decided on August 4th.

Florida seeks federal approval to continue limiting retroactive Medicaid eligibility

The Agency for Health Care Administration (AHCA) is asking the federal Centers for Medicare and Medicaid Services for permission to continuing limiting retroactive eligibility for Medicaid to only 30 days, instead of 90 days required by federal law.
The 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.  However, without legislative authorization, the agency is now seeking federal approval to continue the policy through June 30, 2024.  HFA has signed on to comments objecting to this change, which can prevent consumers from obtaining critical coverage following a catastrophic medical event.

Colorado governor signs bills enhancing insurance affordability, enrollment

Governor Jared Polis (D) signed legislation this month that will create a new health insurance affordability board in Colorado.
Under S.B. 215, the nine-member board 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 reinsurance 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.   State subsidies would be available only to consumers who are ineligible for both ACA subsidies and public health programs (like Medicare or Medicaid). California is the only state to have similar state 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.

Commission 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’s 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.  However, it acknowledges that without the coupons, patients with commercial insurance who rely on specialty drugs would often be unable to afford clinically necessary medication due to high drug prices or plan cost-sharing.
In these instances, the study found, coupons provide critical financial relief and improved adherence, leading to better clinical outcomes.  As a result, the HPC concludes that “eliminating the availability of coupons at this time – without substantial protections for patient affordability – would likely create serious challenges for many patients in the Commonwealth.”
Since 2012, Massachusetts law has generally prohibited manufacturers from offering coupons and discounts on prescription drugs. The legislature has passed a series of one-year exceptions to that law, but patient advocates seek a permanent solution allowing patients to avail themselves of copay assistance.