YEAR-END REPORT - 2019 Published 23-Dec-2019 HPTS Issue Brief 12-23-19.1 Health Policy Tracking Service - Issue Briefs Access to Health Insurance Access to Health Insurance Authored by a contributing writer. 12/23/2019 Introduction According to a new national poll, many Americans in their 50s and 60s have serious concerns about accessing health insurance coverage. A Texas judge declared the Affordable Care Act (ACA) unconstitutional in early December but has now said the law can remain in effect throughout the appeal of the ruling. The Democratic-controlled House moved to intervene in the lawsuit against the Affordable Care Act, in an effort to defend the law. Following wins from the mid-term elections in November, Democratic leaders in states are working on expanding access to health insurance and making health care more affordable to their constituents. Governor Jared Polis of Colorado is in favor of a reinsurance program to address the rising cost of health care in the state. The Trump administration announced proposed changes to regulations that would increase premiums slightly under the Affordable Care Act next year. According to a recent Gallup poll, the rate of people in the United States without health insurance coverage is the highest it has been in four years. Several thousand Medicaid enrollees have fallen off the rolls of the program in Missouri and Tennessee as the states increased efforts to verify eligibility for the program, raising concerns that eligible enrollees were wrongly dropped from the program. The White House released a new report on health care attempting to shift the Trump administration's rhetoric on health care and asserting that changes to the Affordable Care Act under President Trump have not significantly undermined the law. Republicans and trade associations in Kansas are in favor of association health insurance plans that do not cover people with pre- existing conditions. Some states including New Mexico are considering legislation that would allow residents to purchase health insurance through the Medicaid program. The Trump administration significantly changed its policy, indicating that it supports striking down the entire Affordable Care Act. Enrollment in Affordable Care Act health insurance plans available through the state and federal health insurance exchanges to people who purchase individual insurance plans remained steady during the open enrollment period for 2019. The Maryland General Assembly passed legislation that would improve access to insurance for uninsured Maryland residents. A proposal is pending in the North Carolina General Assembly that would extend health insurance to people who are uninsured. Twenty-two bills are pending in California that would improve access to health insurance and make it more affordable. Kansas Democratic Gov. Laura Kelly declined to block the effort of Republican legislators to allow the state Farm Bureau to offer health insurance plans that do not comply with the ACA. Washington Gov. Jay Inslee signed a bill that will ensure Washington residents keep many of the consumer protections in the Affordable Care Act, including protections for people with pre-existing conditions. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -1- A Colorado bill that would create reinsurance to help state health insurance companies cover the cost of their most expensive beneficiaries stalled before a scheduled Senate committee hearing because of questions over the proposed payment mechanism meeting federal rules. Montana Gov. Steve Bullock signed a bill that renews Medicaid expansion for the state but imposes new work and public service requirements for some enrollees. The House passed a bill that would keep protections given under the Affordable Care Act for people with pre-existing health conditions. Connecticut Gov. Ned Lamont and Democratic legislators revealed a proposal for state-subsidized health insurance in the state. Maryland Governor Larry Hogan is expected to sign a bill into law that will help facilitate enrollment in health coverage programs. The American Academy of Actuaries released a new report showing that increases in health care costs and other factors are driving premium increases for 2020 plans. A recent study showed that employees in Massachusetts are paying significantly more for health insurance premiums, are responsible for a larger portion of their premiums and are paying increased out-of-pocket costs including deductibles. President Trump recently signed an executive order aimed at creating greater price transparency in health care by giving patients access to price information. California Gov. Gavin Newsom signed a bill that will make California the first state to offer government-subsidized health insurance benefits to young undocumented adults. th The 5 U.S. Circuit Court of Appeals heard arguments about whether the Affordable Care Act is constitutional. The line of questioning gave the appearance that the court is inclined to rule the core provision of the law unconstitutional. A federal district judge ruled in favor of the Trump administration's move to allow the expansion of short-term health insurance plans. A new report released by the Kaiser Family Foundation showed state actions aimed at improving the affordability of health insurance through the individual market. According to a recent study by the Robert Wood Johnson (RWJ) Foundation, approximately 700,000 more individuals became uninsured between 2016 and 2017. The federal government issued a final regulation that will allow employers to offer individual coverage health reimbursement accounts (ICHRAs) in place of traditional group health insurance plans beginning in 2020. According to a new survey by the Kaiser Family Foundation, the cost of family premiums for employer-sponsored health insurance increased 5% to an average of $20,576 in 2019. Connecticut will undertake a new role in negotiating prices that health care providers charge for treating public-sector employees and retirees. Maine received a $750,000 grant from the Robert Wood Johnson Foundation aimed at improving health insurance coverage in the state. Officials in Colorado released a draft report on the proposed state public health insurance option. In Connecticut, a task force is studying high-deductible health plans and access to coverage. California will offer some state residents subsidies to help purchase health insurance coverage beginning in January 2020. A federal judge issued a temporary restraining order preventing the Trump administration from implementing a rule that would require immigrants to prove that they have health insurance coverage or means to cover medical care before they can become eligible for visas. Florida has created a website aimed at assisting health care consumers obtain information about pricing of health care services. Legislation pending in Michigan would prevent insurers from extensive use of cost-control methods requiring pre-approvals for care. ACA to Remain While Ruling Invalidating It Appealed A Texas judge declared the Affordable Care Act (ACA) unconstitutional in early December but has now said the law can remain in effect throughout the appeal of the ruling. Judge Reed O'Connor issued a stay of the ruling that the ACA is invalid. The stay is likely to bring some short-term certainty to the individual health insurance markets. An immediate suspension of the ACA could have significantly disrupted health insurance throughout the United States. O'Connor ruled that the elimination of the penalty imposed on people failing to obtain health insurance coverage invalidated the entire ACA. He admitted that with an immediate implementation of his order “many everyday Americans would face great uncertainty during pendency of the appeal.” © 2020 Thomson Reuters. No claim to original U.S. Government Works. -2- The ruling came one day before the end of open enrollment for ACA plans in most states. A small number of states have extended the open enrollment period. Republican attorneys general from several states brought the lawsuit, asserting that the elimination of the individual mandate invalidated the entire ACA. According to Tim Jost, a professor emeritus at the Washington and Lee University School of Law, suspending the ACA would significantly affect the health insurance market throughout the nation. “It would affect virtually every American regardless of what type of health insurance they have,” stated Jost, “Millions of people would lose significant protections if this case is upheld.” The ACA created online exchanges where Americans can purchase health insurance on the individual market. Eligible Americans can access subsidies through these exchanges to help cover the cost of premiums. The ACA also made it possible for states to expand Medicaid eligibility to a larger group of people with the assistance of federal funding. Thirty-six states and Washington, D.C. have expanded Medicaid. Under the ACA, insurers must offer health insurance coverage to all people without regard to health status and without charging more based on gender or a preexisting health condition. The law placed limits on the costs of plans based on age. It required insurers to cover children until age 26 on their parents' plans. It also required insurers to cover preventive-care services for free. Last June, the Justice Department indicated that it supported parts of the lawsuit but was not in favor of eliminating all aspects of the ACA. th Jost predicted that the ruling will be reversed either in the 5 Circuit Court of Appeals or by the U.S. Supreme Court, but that a final ruling might not come until 2020 or 2021. Jost also indicated that the ruling could result in fewer people signing up for health insurance in 2020 and a smaller pool of people purchasing coverage. Prices would likely increase for comprehensive coverage. [FN1] “It could have a very serious effect,” Jost noted, “even if it has no real legal effect at this point.” Older Americans Concerned About Access to Health Insurance According to a new national poll, many Americans in their 50s and 60s have serious concerns about accessing health insurance coverage. Forty-five percent of respondents indicated that they have little or no confidence in being able to afford health insurance coverage after retirement. Twenty-seven percent stated that they were unsure if they would be able to afford coverage in the coming year. Ten percent of the people admitted that they had considered going without health insurance in 2019. Five percent had decided to forgo health insurance at the time of the poll. Among adults age 50 to 64, 19 percent of adults decided to keep their current jobs rather than moving to another job or retiring for the sole purpose of keeping employer-sponsored health insurance coverage. Fifteen percent of people who changed coverage for 2019 reported that they were postponing medical procedures until they were covered by the new plans. Approximately 8 percent of people in their early 60s are postponing medical procedures until they quality for Medicare. Approximately half of adults age 50-64 closely follow news regarding potential changes to the Affordable Care Act, Medicare or Medicaid. Even though the poll was conducted prior to the December court ruling regarding the ACA's constitutionality, 68 percent of respondents indicated that they were concerned about potential changes in federal policy affecting access to health insurance. The University of Michigan Institute for Healthcare Policy and Innovation conducted the poll of 1,024 adults who do not yet qualify for Medicare coverage. AARP and Michigan Medicine, the academic medical center, sponsored the study. Renuka Tipirneni, M.D., M.Sc., a U-M health researcher who participated in leading the design and analysis of the poll, indicated that an understanding of options for health insurance coverage and the cost of that coverage becomes more important the closer adults get to retirement. “As people age into the years when many chronic diseases begin to take hold, and when they're still years away from Medicare coverage, it's important to talk with someone knowledgeable about all the options for coverage to bring down out-of-pocket costs and better navigate health care in this critical period,” stated Tipirneni, who has experience researching the public's health insurance knowledge and use. Researches focused on people approaching age 65, when most Americans qualify for health insurance coverage under Medicare. The poll occurred in the fall during the open enrollment period for many employment-based health insurance plans, close to the beginning of the open enrollment period for Medicare and the ACA exchanges. Almost two-thirds of the people polled noted that they access health insurance coverage through their job or another person's job. Approximately 20 percent received coverage through Medicaid, Medicare, or another government-sponsored program. Eight percent purchased their own plans. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -3- “The Affordable Care Act was intended to cut down on ‘job lock’, where a person feels trapped in their job by their need to preserve their health insurance,” stated Preeti Malani, M.D., director of the poll and a professor of internal medicine at the U-M Medical School. “We were surprised by the low percentage of these adults who bought their own coverage through the ACA exchanges, and the relatively high percentage who felt they had to keep a job or delay retirement in order to keep a plan. Innovative policy solutions are needed to help adults in this age group navigate their insurance options.” Concern over the continuing debate over the Affordable Care Act and potential changes to Medicaid and Medicare via legislative action, presidential decisions or judicial action could be influencing people's health care decisions. “This survey validates that health care coverage is a top concern of older Americans,” stated Alison Bryant, Ph.D., senior vice president of research for AARP. “The uninsured rate among the 50- to 64-year-old age group dropped 47 percent since implementation of the ACA, but we have to continue to improve access and affordability of health coverage for all older adults.” Questions on the survey focused on the respondents' understanding of health insurance terms, where they obtained information about health insurance coverage, and the level of confidence they had in determining services their health insurance covered and the out-of- pocket cost of those services. One in five of people polled indicated that they had little or no confidence in understanding health insurance terms. One in four indicated that they didn't know how to find out if a service was covered by their health insurance coverage prior to receiving the treatment. The same percentage of people did not know how to determine what their out-of-pocket costs would be. A recent study by Tipirneni and colleagues showed a link between a person's confidence in their ability to interpret their health insurance policy and the likelihood that they will avoid obtaining health care due to the cost of care. The research was published in JAMA Network Open. Researchers found that almost 30 percent of adults with health insurance over the age of 18 avoided seeking certain types of care due to potential out-of-pocket costs. People who reported the least self confidence in interpreting their health plans were the most likely to indicate that they had avoided medical care, either preventive or non-preventive, because of the potential cost of that care. [FN2] A full report of the findings and methodology of the National Poll on Healthy Aging is available at http://www.healthyagingpoll.org. Democrats Plan to Expand Access to Health Insurance Following wins from the mid-term elections in November, Democratic leaders in states are working on expanding access to health insurance and making health care more affordable to their constituents. During the first full week of state legislative sessions, governors submitted a number of proposals. New California Gov. Gavin Newsom announced that he would work to expand Medicaid coverage to people up to age 26 who are in the country illegally. He also stated plans to implement a mandate that would require people to obtain insurance or face a fine, and a plan to lower costs by consolidating the state's prescription drug purchases. In Washington, Gov. Jay Inslee announced a proposal for a public health insurance option for people not eligible for Medicaid or insurance from private employers. The plan would focus on people who cannot afford individual health insurance policies. In New Mexico, as well as in other states where Democrats control the legislature or the governor's office are considering plans to offer buy-in Medicaid coverage or other subsidized coverage to people who are uninsured but make too much to qualify for Medicaid. New York Mayer Bill de Blasio announced a plan for a pubic program to help uninsured people receive primary care treatment along with treatment they already receive in city hospitals. During the campaign trail in 2018, Democratic candidates campaigned on a main theme of access to health care. They supported the benefits of the Affordable Care Act, including protections for people with pre-existing conditions, allowing people to stay on their parents' health insurance policies, and expanding access to insurance for low-income people. “Once you give something to somebody, it's pretty hard to take it away, and I think we see that with how the support for the (Affordable Care Act) has grown over the last two years,” indicated Washington House Rep. Eileen Cody, who is heading the public option proposal in the state. The Trump administration and congressional Republicans have been supporting moves to undermine the ACA. Under the GOP tax law passed last year, the individual mandate was eliminated. It required people to obtain health insurance coverage or face a tax penalty and was intended to stabilize the individual market by encouraging healthier people to buy coverage. Last summer, the Trump administration stopped payments under the ACA program that reimburses insurers for financial losses from sicker payments. The elimination of those payments is expected to increase premiums. Democratic proposals in the states are not yet asking for universal health care. Some Democratic legislators favor universal health care but it has been elusive due to cost. California, Colorado, and Vermont have all considered state-run health care systems in recent years, but then have abandoned the idea. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -4- Many Democrats are still in favor of universal health care. “This is not just a moral right,” Inslee stated, while announcing a public option proposal, “It is an economic wisdom, and this is very possible.” In Colorado, some legislators in the Democrat-controlled legislature and governor's office have proposed state-run health insurance plans like the one Inlsee announced. People who don't qualify for federal assistance or who live in rural areas with fewer choices for coverage would be eligible. The plans would depend on the agencies that administer Medicaid. Currently, the state and federally-run program serves about one in five Americans. Republicans are wary of the cost of such a plan for the states, since the states already pay for a portion of Medicaid coverage for state residents. “This is about having the government competing in the private market. Medicare-for-all will be priced out,” Washington state Rep. Joe Schmick stated. According to Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, a more feasible plan would involve taking incremental steps to increase coverage options and make health care more affordable. She called universal healthcare plans costly and complicated all-or-nothing proposals. “Everybody wants to pay less for health care,” she indicated. The mid-term elections gave Democrats more flexibility to experiment with plans to improve access to health insurance. Their focus on health care helped them to flip seven governor's seats, increasing the number of Democratic governors to 23. They also won back several state legislative chambers. In New York and Nevada and several other states, they won full control of the government. This governmental power will allow the party to try health care expansions that Republicans have previously opposed. In 2017, the Nevada legislature, controlled by Democrats, passed a bill that would have allowed anyone in the state to buy into Medicaid coverage, similar to the plan now proposed in New Mexico. Republican former Gov. Brian Sandoval vetoed the bill. Now, new Gov. Steve Sisolak, a Democrat, has created a committee to consider health care options, including potentially implementing an insurance mandate for everyone in the state. New Jersey and Massachusetts already have a health insurance mandate. Vermont's insurance mandate will begin in 2020. In New Mexico, Democratic legislators have long considered allowing people, including non-citizens, to purchase Medicaid coverage if they cannot afford another policy. According to Colin Baillio, policy director for the advocacy group Health Action New Mexico, legislators are drafting the bill with the focus of adopting it this year and implementing it in 2020. The new governor of New Mexico, Michelle Lujan Grisham, is a Democrat. “Folks are going to need to have health care one way or another,” he stated. “We think health coverage is a good investment for our [FN3] state.” House Moves to Join ACA Lawsuit The Democratic-controlled House moved to intervene in the lawsuit against the Affordable Care Act, in an effort to defend the law. A federal court ruled in that case that the ACA was unconstitutional. Democrats announced that the House had filed papers to intervene in the case. The action is likely to create a political impact. The House is set to vote on authorizing its attorneys to enter the case and defend the law. The vote is focused on making Republicans choose between defending the ACA, which they have traditionally vehemently opposed, or supporting the end to ACA benefits that have wide popularity. “While the administration refuses to meet its responsibilities to defend the laws, the House of Representatives is acting to uphold the constitutionality of this law and protect the health care of every American,” House Speaker Nancy Pelosi, D-Calif., indicated through a written statement. Last summer, the Trump administration ceased defending key aspect of the ACA, such as guaranteed access to health insurance plans for people who have been diagnosed with pre-existing conditions. Traditionally, the Justice Department defends federal laws in court challenges. However, Trump has long opposed the health care law and attempted to repeal it. Republicans in Congress unanimously opposed the law in 2010 when it passed. Since then, they have voted to repeal it. Popular protection under the ACA include protections for people with pre-existing conditions. During the election last fall, many Republicans voiced support for legislation protecting access to coverage for people with pre-existing conditions. The federal judge in Texas declared the law unconstitutional due to the repeal of the health insurance mandate imposing a tax penalty th on people who failed to obtain insurance coverage. The case is being appealed to the 5 U.S. Circuit Court of Appeals in New Orleans. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -5- The law will remain in effect while the ruling is appealed. [FN4] On the first day of the new Congress, the House voted in favor of preliminary approval allowing its attorneys to enter the case. Uninsured Rate Highest in Four Years According to a recent Gallup poll, the rate of people in the United States without health insurance coverage is the highest it has been in four years. During the fourth quarter of 2018, 13.7% of the adult population in the nation lacked health insurance. That rate is the highest since the first quarter of 2014. Prior to the implementation of the Affordable Care Act health insurance mandate in 2014, the highest percentage of uninsured people was 18%. The lowest rate of people lacking insurance was 10.9% in 2016. Since then, a net increase of approximately seven million adults have joined the ranks of the uninsured. In the third and fourth quarters of 2016, the rate of uninsured people rose from 10.9% to 12.2% by the last quarter of 2017. Since then, it has increased each quarter. Gallup has measured the rate of people lacking insurance since 2008. The highest rate it recorded was 18% in the third quarter of 2013. Major events impacting the rate of people with insurance included the opening of the ACA marketplace exchanges on Oct. 1, 2013, with plans beginning in January 2014, and Medicaid expansion for 24 states and the District of Columbia beginning in 2014. Since then, 12 more states have agreed to expand Medicaid. The Medicaid expansion made people earning up to 138% of the federal poverty level eligible for coverage. Due to Medicaid expansion and the opening of the exchanges in 2014, the benchmark for measuring the effects of those policies is the third quarter of 2013. The rate of people in most subgroups increased in the fourth quarter of 2018 from the same quarter in 2016, when the lowest percentage of people lacked insurance. Women in households earning less than $48,000 per year as well as young adults under the age of 35 experienced the largest increases. Twenty-one percent of people under the age of 35 indicated that they lacked health insurance coverage, which is a 4.8-point increase from 2016. The uninsured rate for women increased from 8.9% to 12.8%. People living in the East region were uninsured at a rate of 7.1%, the only percentage to remain virtually unchanged among all the regions since 2016. In the West, Midwest, and South, all regions reported 3-point increases in uninsured rates for the fourth quarter of 2018. The uninsured rate in the South, which has traditionally been the highest in the nation, saw a 3.8-point increase to 19.6%. Researchers pointed to several factors leading to the increase of the uninsured rate during the last two years. One factor is the increase in the cost of insurance in some states for some of the most popular plans available through the insurance exchanges. Overall, insurance costs stabilized in most states. Also, many insurers have exited the ACA exchanges, leaving fewer choices for health insurance plans as well as less competition. Policy decisions could have affected enrollment in health insurance plans. Since 2018, the open enrollment periods have been shortened and marketing funding has been reduced. Funding for ACA navigators who help people sign up for health insurance plans through the exchanges has also been reduced from $63 million in 2016 to $10 million in 2018. In 2016, enrollment in the federal exchange was the highest at 9.6 million consumers. For 2019 plans, enrollment fell by 12.5 percent to 8.4 million. Repeated attempts from President Trump and Republican legislators to repeal the ACA might have increased uncertainty about the health insurance exchanges. The Trump administration eliminated the ACA individual mandate, which previously required people to obtain health insurance or face a tax penalty. The Trump administration also halted a cost-sharing reduction program in October 2017 that helped insurers cover the cost of offering lower-cost plans to consumers with lower incomes. A class-action lawsuit filed by health insurers against the federal government is [FN5] pending over these payments. Proposed Rule Would Increase Premiums The Trump administration announced proposed changes to regulations that would increase premiums slightly under the Affordable Care Act next year. The rule change could lead to a significant health-care issue for the presidential campaign year. The rule would increase premiums about 1%. According to the Trump administration, the new regulation is aimed at improving the accuracy of the formula that determines what consumers pay for health insurance coverage. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -6- The cost of premiums largely stabilized this year after significantly increasing for several years. President Trump took credit for the stabilization, crediting his administration's management skills. Trump attempted to repeal the ACA during his first year in office. He also ended a major subsidy for insurers, causing increases in premiums. The Centers for Medicare and Medicaid Services released the 300-page proposal for the new regulation. According to CMS, the regulation will address the calculation of premium subsidies under the ACA. Approximately 10 million people purchase health insurance policies through the ACA exchanges. About 9 out of 10 of those consumers receive federal tax subsidies to help cover the cost. The regulation will also require insurers who offer coverage of abortion service through an exchange plan to offer a plan that is identical but does not offer coverage for abortion services. Under the ACA, insurers may offer coverage for abortions, but they must collect a separate premium for the cost of that coverage. Some states have laws that prohibit plans available through the ACA exchanges from covering abortion. According to Sen. Ron Wyden of Oregon, “Today's proposed rule deliberately and needlessly increases premiums and will result in too many Americans losing access to health coverage. The Trump administration continues to fan the flames of uncertainty while families pick up the check.” The Trump administration estimates that the federal government will save approximately $900 million per year on subsidies due to the regulation. It predicts that approximately 100,000 currently insured people will drop their plans. [FN6] CMS will seek public comment on the proposed regulation for 30 days. Colorado Governor Favors Reinsurance Plan Governor Jared Polis of Colorado is in favor of a reinsurance program to address the rising cost of health care in the state. He requested that the legislature invest $1 million of the state's yearly budget in the plan with a 2020 implementation. “Whether people are Independent or Republican or Democrat or Green or Liberation, they're all being ripped off on health care costs,” indicated Polis. “Establishing a reinsurance plan in the state to bring down the high cost of insurance for people who buy their own insurance on the exchange.” Reinsurance insures health insurance companies against having to cover the most expensive patients without increasing premiums costs significantly for other consumers. The state would pay for the cost of the program. Sen. Kerry Donovan, D-Vail, who represents some of the areas in Colorado most affected by limited provider options and increases in health care costs, is also in favor of a reinsurance program for the state. “In the individual market, you can have a very expensive individual that deserves to have that care, but as they're going through their medical treatments they may be pulling the trend line further up than we anticipated,” she stated. “That outlier expensive patients pull everyone else's cost up.” She asserted that a reinsurance program could significantly lower the cost of premiums for individuals through the state health insurance exchange. Republicans legislators expressed concern about the cost of such a program to the state. According to the state Division of Insurance, a modest plan could cost Colorado $70 million in 2019. A more ambitious plans could cost [FN7] $346 million. White House Releases Report on Health Care The White House released a new report on health care attempting to shift the Trump administration's rhetoric on health care and asserting that changes to the Affordable Care Act under President Trump have not significantly undermined the law. The Council of Economic Advisers report indicated that the Affordable Care Act subsidies that assist low- and middle-income consumers in obtaining health insurance coverage will help keep the federal health insurance exchange, HealthCare.gov, viable even if healthier customers opt out of purchasing coverage due to the changes to the law from the Trump administration. Almost 90 percent of consumers purchasing health insurance plans through the exchange receive a tax subsidy. Health care continues to be a major issue coming out of the 2018 midterm elections where Democrats successfully campaigned in support of the ACA. Democratic hopefuls to the White House in 2020 have continued with the issue of health care on the forefront. Some potential candidates support government-run health care that would cover all Americans and replace the ACA. The Council of Economic Advisors is a White House agency. According to Larry Levitt, of the nonpartisan Kaiser Family Foundation, the report signals that the Trump administration is attempting to move away from the issue of the ACA after Trump and a Republican-led Congress failed to replace or repeal the law. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -7- “The president seemed to take pride in undermining the ACA, but now his administration is resisting the argument that they have undermined the health law,” Levitt stated. “They can point to benefits of deregulation but will also have to live with the costs, which include higher premiums for middle-class people with pre-existing conditions.” The public has come to largely support the ACA. The report outlines three major changes the Trump administration made to the landmark health care law. Congress repealed the unpopular health insurance mandate that imposed tax fines for going without health insurance. The Trump administration also allowed the sale of “association health plans” for small businesses and the sale of low-cost short-term health insurance that does not include comprehensive coverage. “These reforms do not ‘sabotage’ the ACA but rather provide a more efficient focus of tax-funded care to those in need,” stated the report, pointing to the administration's changes as “de-regulation.” The Democratic majority House, led by Speaker Nancy Pelosi, D-Calif., are moving to strengthen the ACA and turn back some of Trump's changes to the law. The success of these measures is unlikely, but measures that would reduce the cost of health insurance premiums and guarantee coverage for people with pre-existing conditions have received bipartisan support. Democrats are also looking to restore funding for advertising HealthCare.gov that the Trump administration cut. Approximately 10 million people access private health insurance coverage through the subsidized exchange markets created under the ACA. An additional 12 million people received coverage under Medicaid due to the expansion of the program allowed by the health care law. According to Casey Mulligan, chief economist for the White House council, the health insurance mandate was not essential for the functioning of the program. He indicated that the tax subsidies were more important to keep the system afloat. “Removing the tax penalty and opening up more affordable options was able to save taxpayer dollars, give families more choice, without destabilizing the exchanges,” he indicated. The economic analysis of the report could affect the outcome of the Texas court case regarding the constitutionality of the ACA, even though the report did not address the arguments in that case. In the case, Republican state officials argued that the ACA became unconstitutional when Congress repealed the insurance mandate. A federal district court ruled in favor of that argument. The case is currently on appeal. The Justice Department announced in connection with the case that it will no longer defend the protections for people with pre-existing conditions under the ACA. The new White House report asserts that the tax penalties forming the central issue of that case are not actually central to the health law. According to the report, consumers will benefit $450 billion over the next decade due to the increased availability of cheaper insurance plan options, reduced taxpayer spending on subsidies, and the elimination of the tax fines. [FN8] However, the report also indicated that premiums will increase for some middle-and upper-income Americans. Medicaid Enrollment Shrinking in Tennessee, Missouri, Raising Concerns Several thousand Medicaid enrollees have fallen off the rolls of the program in Missouri and Tennessee as the states increased efforts to verify eligibility for the program, raising concerns that eligible enrollees were wrongly dropped from the program. According to state data in Missouri, Medicaid enrollment declined more rapidly last year than in other states. Most of the people losing coverage are children, state data revealed. According to state health officials, several factors, such as an improved economy, led to the reduction in enrollment. In Missouri, enrollment fell by 7 percent. In Tennessee, it fell by 9 percent. Advocates for the poor suspect that the states' attempts to drop people who are ineligible as well as the difficulty of re-enrolling in the program have caused eligible people to lose coverage. In Tennessee, enrollees had to fill out packets as long as 47 pages to verify re-enrollment in the program. In Missouri, people who needed help enrolling waited two hours on the state's phone lines. In January to October 2018, enrollment in Medicaid nationwide fell by 1.5 percent, according to the Centers for Medicare & Medicaid Services (CMS). Herb Kuhn, president and chief executive of the Missouri Hospital Association, indicated that the state's attempts to verify eligibility for the program could have affected the increase in the number of uninsured people seeking treatment at hospitals. “When we see over 50,000 children come off the Medicaid rolls, it raises some questions about whether the state is doing its verifications appropriately,” he asserted. “Those who are truly entitled to the service should get to keep it.” © 2020 Thomson Reuters. No claim to original U.S. Government Works. -8- The system for verifying eligibility for Medicaid in Missouri began to become automated in 2018. The system identified people as ineligible and asked them to send updated documentation to prove eligibility. People who did not respond or provide adequate documentation were dropped from the program. According to Rebecca Woelfel, spokeswoman for the Missouri Department of Social Services, which oversees Medicaid, the state does not know how many letters it sent or how many people responded to those letters. Medicaid enrollees were allowed 10 days to respond to the ineligibility letters before being dropped. Woelfel argued that the new eligibility system, improvements in the economy, and Congress repealing the insurance mandate led to the decrease in enrollment in Medicaid in the state. In January 2018, unemployment in Missouri fell from 3.7 percent to 3.1 percent in December 2018. The decrease in unemployment amounted to about 17,000 people. In December, nearly 906,000 people were enrolled in Missouri's Medicaid program. In January 2018, enrollees numbered 977,000. Approximately two-thirds of people enrolled were children or pregnant women. Timothy McBride, a health economist at Washington University in St. Louis who heads a Missouri Medicaid advisory board, argued that the eligibility system in the state makes it too hard for people to remain enrolled in Medicaid. Low-income people are more likely to move or be homeless, making it difficult to impossible to receive mail. “I worry some people are still eligible but just did not respond, and the next time they need health care they will show up with their [FN9] Medicaid card and find out they are not covered,” McBride indicated. States Consider Medicaid Buy-In Some states including New Mexico are considering legislation that would allow residents to purchase health insurance through the Medicaid program. Bills have been proposed in both the New Mexico House and Senate that would allow a buy in to a public health plan similar to Medicaid. While the idea for a national Medicare-for-all plan has been gaining support with some federal legislators, several states are considering offering residents the opportunity to purchase health insurance coverage through the government as a more affordable option in the meantime. The proposals are often called “Medicaid buy-in” plans. They would offer consumers benefits akin to Medicaid, the program available for people with low incomes. “Medicare-for-all is not going to happen legislatively in the next couple years. But in the meantime states are saying, ‘What about “Medicaid for more”?”’ stated Heather Howard, who directs Princeton University's state health and value strategies program. She is working with some states on the proposals. According to researchers in a report New Mexico commissioned, as many as 16,000 people in the state would enroll in a program that the bills propose. Premiums would cost 15 to 28 percent less than plans available through the individual market. Gov. Michelle Lujan Grisham supports the proposal for a Medicaid buy-in option but has no position on the pending bills. According to Nora Sackett, the governor's deputy press secretary, she is closely following the issue. Howard pointed to the interest of the governor and the legislature in the issue, as well as the involvement of other stakeholders as a potential sign of success. Colorado, Oregon, Washington and Minnesota are all considering similar proposals, according to Howard. The Nevada legislature passed a bill that would have created a Medicaid buy-in plan, but the Republican governor vetoed it last year. ”The proposals take on different flavors depending on the state” and what officials are trying to accomplish, she indicated. Some states are concerned about increasing access to insurance, making coverage more affordable, and addressing the problem of counties that lack insurance carriers offering individual plans. Proposals vary by state. Some states might choose to expand Medicaid directly. Others may offer a plan that builds on Medicaid but is not directly part of it, while offering similar benefits, providers and heath care provider payments. Another proposal is a public option insurance plan that is not based on the Medicaid program. States might need approval for these plans from the federal government to implement them, depending on their structure. United States Sen. Brian Schatz (D-Hawaii) and Rep. Ben Ray Luján (D-N.M.) introduced a federal bill in early February that would allow states to open eligibility for Medicaid to all residents. The New Mexico proposal would create a plan like the state's Medicaid program. The plan would be available outside the exchange. The federal government would not have to approve it. Financial assistance based on income would be available through the state. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -9- The New Mexico bill would create a system focused on assisting people who are not eligible for Medicaid, Medicare, or federal tax subsidies through the Affordable Care Act. Immigrants who do not have legal status would also be eligible for assistance and coverage. People earning above 400 percent of the federal poverty level are not eligible for the ACA subsidies. Under the New Mexico bill, people earning less than 200 percent of the federal poverty level would qualify for premium and cost-sharing assistance. Plans would begin by January 2021. Approximately 40 percent of all New Mexico residents are enrolled in the state's Medicaid program. Nationwide, Medicaid enrollment is approximately 23 percent. “It's the cornerstone” of our health care system, stated Colin Baillio, director of policy and communication at Health Action New Mexico, an advocacy group. Baillio indicated that the legislation would use “those levers that Medicaid has to provide comprehensive coverage and a comprehensive provider network.” In February, two legislative committees passed the bills, indicating that more study is needed to determine if the plan should be extended to more groups. The bills will next move to two more legislative committees. Health care providers and hospitals would receive payments for services at Medicaid rates under the plan. Even though these rates are lower than reimbursement rates through most commercial plans, providers are still likely to benefit financially if people who are currently uninsured gain coverage. “We're obviously very supportive of anything that expands coverage,” indicated Jeff Dye, president of the New Mexico Hospital Association. “It's the issue of getting some payment versus no payment for services rendered.” The aspect of the proposed bills that gives access to health insurance coverage to undocumented residents is “an underlying issue with many states that are considering a Medicaid buy-in,” indicated Chiquita Brooks-LaSure, managing director at Manatt Health, a co- [FN10] author of the reports evaluating Medicaid buy-in options for New Mexico. Kansas Republicans Favor Association Plans Republicans and trade associations in Kansas are in favor of association health insurance plans that do not cover people with pre- existing conditions. Pending legislation requested by the Kansas Farm Bureau passed the Republican-controlled senate and will next go to the house for a vote. “According to a Gallup poll, citizens are more concerned about rising health premiums than pre-existing conditions,” indicated Sen. Mary Pilcher-Cook, a Republican from Shawnee who voted for the bill. “We should support lower cost of acquiring health care coverage, so people can have it before they develop what would otherwise be pre-existing conditions.” Association plans like the Farm Bureau health plan could refuse to cover people with pre-existing conditions. The plans could also bar coverage for essential health benefits that the Affordable Care Act required, such as maternity care, mental health care and prescription medications. Patient advocacy groups and Democrats expressed concern that the new plans will leave people without adequate coverage and increase prices for people with pre-existing conditions. “For some people it will work out fine,” stated Sen. Barbara Bollier, a Democrat from Mission Hills and a retired physician. “But for the people (who get sick) it's bad and then for everyone else, when you take out healthy people from the market, all our costs go up.” These “association health plans” are available to members of professional trade groups, including many small business owners. Legislation pending on these plans could allow the Kansas Farm Bureau to offer coverage that would circumvent both the ACA and the Kansas Insurance Department. The plans would not be subject to federal requirements or state requirements. According to Kansas Farm Bureau CEO Terry Holdren, a national survey of farmers and ranchers showed that 65 percent of them pointed to the cost of health coverage as the top obstacle preventing them from keeping their farms. Most members of the farm bureau make too much to qualify for federal subsidies under the ACA. “Many seek employment off the farm solely for the health care benefit,” Holdren asserted. “Others join health care sharing ministries or become uninsured.” According to Holdren, the farm bureau's financial services division will be able to offer health insurance plans at an estimated 30 percent cheaper than the cost of plans available through the ACA exchange. If the bill passes, the Kansas Farm Bureau's plans would be available to members, but anyone is eligible to join for a $50 membership fee. Up to 42,000 people are predicted purchase the new plans. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -10- Under the ACA, association plans are allowed, but they must cover the essential health benefits, including hospitals, outpatient physician visits, emergency services, maternal and neo-natal care, mental health and substance abuse treatment, prescription drugs, [FN11] lab tests, federally recommended preventative care, pediatric care and rehabilitation. Enrollment in ACA Plans Remains Steady Enrollment in Affordable Care Act health insurance plans available through the state and federal health insurance exchanges to people who purchase individual insurance plans remained steady during the open enrollment period for 2019. About 11.4 million American consumers chose plans or automatically renewed plans through the exchanges. According to the Center for Medicare and Medicaid Services (CMS), 11.8 million members chose plans or re-enrolled for 2018. CMS looked at data from the 39 states that use the HealthCare.gov eligibility and enrollment website and from the 12 states that run their own state-based exchanges (SBEs). The data showed that the number of people obtaining health insurance coverage through the ACA exchanges declines only slightly since 2018, by about 300,000 people. CMS asserted that the decline was likely because of an increased number of people with access to employer-sponsored health plans, lowering the demand for individual health insurance. Also, CMS pointed to Virginia, where approximately 100,000 people enrolled in exchange plans in 2018 became eligible for Medicaid in 2019 when the state agreed to expand the program. Among the 11.4 million enrollees, 8.4 million purchased plans through the federal website. This number decreased by 1.5 percent from 2018. State-based exchanges accounted for three million enrollees. People new to the exchanges accounted for 24 percent of enrollees. Forty-seven percent of enrollees were returning customers who actively selected plans. Thirty percent of enrollees were automatically re-enrolled in prior plans. Eighteen percent of the 8.4 million enrollees through HealthCare.gov were residents of rural areas. In 2018, 70 percent of enrollees reported incomes between 100 percent and 250 percent of the federal poverty level. In 2019, that rate was 71 percent. Demographic data including age, gender, and race were the same as in 2018. An equal rate of young adults ages 18 to 34, twenty-six percent, signed up for plans through the federal platform in 2019 as for 2018. African-American consumers enrolled at the same rate, seven percent, in 2019 as they did in 2018. Fifty-one percent of enrollees in 2019 were white, while 49 percent of them were white in 2018. Silver-tier plans remained the most popular. Sixty-one percent of members chose this level plan. In 2018, 37 percent of enrollees chose this level plan. Bronze plans also remained popular, with 30 percent of enrollees choosing these plans, compared to 28 percent the prior year. The cost of premiums for consumers eligible for federal tax credits before the credit was applied decreased by one percent. The average cost was $621 in 2018 and $612 in 2019. The average tax credits brought the cost to consumers for these plans down to $87 in 2019. The cost was $89 in 2018. CMS pointed out that the cost reduction is small, but that costs increased significantly in the prior two years by 23 percent on average in 2017 and 31 percent in 2018. CMS indicated that it would continue the non-enforcement policy that allows insurers to continue offering certain health plans that don't meet all the requirements of the ACA to people who had those plans prior to the implementation of the law. These plans, often referred to as “grandmothered” plans, can be less expensive than plans available through the exchange. “Not extending the grandmothered plan policy would cancel plans that are meeting people's needs today and, as a result, force people to decide between buying coverage they cannot afford on the individual market or going uninsured,” indicated CMS Administrator Seema Verma. Verma pointed to the findings of the report as evidence of the ease of enrolling in ACA plans. “Another year of stable enrollment through the Exchanges directly reflects the strong work CMS staff put into ensuring that Exchange consumers experience a seamless enrollment process free from unnecessary hurdles and IT glitches,” she noted. “It is no coincidence enrollment remained strong when the Exchange call center maintained a record high 90 percent satisfaction rate [FN12] and no waiting rooms were needed in the final, busiest days of enrollment.” Trump Administration Supports Striking Down Entire ACA The Trump administration significantly changed its policy, indicating that it supports striking down the entire Affordable Care Act. The administration had previously supported removing the ACA protections for people with pre-existing conditions but had not supported fully eliminating the law. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -11- th The Department of Justice announced the change in a two-sentence letter to the 5 Circuit Court of Appeals. The letter indicated that the ruling last December by a Texas district court judge “should be affirmed.” District Judge Reed O'Connor declared the ACA unconstitutional in that case. He reasoned that the elimination of the federal tax penalty requiring people to obtain health insurance coverage invalidated the entire law. “The Department of Justice has determined that the district court's comprehensive opinion came to the correct conclusion and will support it on appeal,” Justice Department spokeswoman Kerri Kupec said in a statement. According to the letter, the DOJ intends to explain its position in a future brief to be filed in the case. The Justice Department's letter announced the federal government's position but does not change anything yet with the federal health care law. The coverage for people who have ACA plans through the exchanges and who receive Medicaid due to the program's expansion under the law remains the same. It is likely that the case will end up in front of the Supreme Court before it is resolved. The case would be the third time the Supreme Court has decided issues relating to the ACA. In 2012, the court upheld the law. It also rejected a challenge to the law in 2015. Some Republican state attorneys general have joined the case in favor of repealing the law. A group of Democratic state attorneys general have joined opposing the elimination of the law. The ACA's widely-known features include the creation of the state and federal health insurance exchanges where individuals can purchase health insurance plans and receive federal subsidies if eligible, and the health insurance mandate. The ACA affects every part of the American health care system. For example, it regulates how much physicians receive for treating Medicare patients. It expanded the Medicaid program to offer health insurance coverage to millions of people with low incomes. It requires restaurants to post nutrition information on products. If the ACA were abolished, hospitals would have to create entirely new payment systems. An entire portion of the insurance industry would disappear. Many Democrats based their 2018 election campaigns on the popularity of the ACA, bringing them success in Congressional elections. Striking down the ACA could be a politically risky move for the Trump administration and other Republicans who are backing the repeal of the law. Democrats expressed criticism of the decision. “Last night, the Department of Justice declared the entire law and all of its vital health care protections must go,” Senate Minority Leader Chuck Schumer, a Democrat from New York, indicated in remarks on the Senate floor. “Make no mistake about it, this is an [FN13] escalation of the Trump administration and Republicans' attacks on protections for people with pre-existing conditions.” California Bills Aimed at Access to Health Coverage Twenty-two bills are pending in California that would improve access to health insurance and make it more affordable. Gov. Gavin Newsom made proposals that would implement an individual mandate penalizing people who fail to obtain health insurance coverage. Congress repealed a nationwide insurance mandate with tax reform legislation. Under the bill, the money gained from the penalty would go towards lowering the cost of health insurance premiums for middle-class people. Newsom also proposed extending eligibility to Medi-Cal coverage for undocumented immigrant adults up to age 26 who have very low incomes. They are currently not able to obtain Affordable Care Act coverage. Other legislators have introduced bills with wider expansions. A significant proposal in two bills would make all undocumented adults eligible for Medi-Cal if their incomes are low enough to qualify. According to Noe Paramo, a legislative advocate with the California Rural Legal Assistance Foundation and a member of the Care4All California coalition, the state will be healthier in the future if all California residents with low enough incomes become eligible for Medi- Cal without considering immigration status. Paramo asserted that the change would make a significant difference in the lives of many California residents, particularly farmworkers. “Every day they go to work without health care, and any injury that happens to them, or just illness, they suffer a consequence,” he indicated. “We can do better as Californians. We need to support this.” There are no current California bills addressing the concept of single-payer health insurance, or one government health plan that would cover all California residents. Newsom has indicated repeatedly that he would support such a move. Department of Finance spokesperson H.D. Palmer pointed to the cost of increasing access to health insurance for California residents. Palmer noted that the state scaled back ambitious health care agendas in the past due to lack of funding. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -12- “The governor is mindful that we don't want to get into kind of a yo-yo pattern between expanding programs and having to cut those back, which is why he's been very careful in terms of expanding programs in health care in the ways that he has,” Palmer indicated. Critics of expanding health care coverage, including Sally Pipes, president of the conservative Pacific Research Institute in California, were not in favor of the bills. “For me, it's very, very worrying,” she stated. “These moves are, in my mind, stepping stones to a government takeover of heath care.” Assemblyman Jim Wood, D-Santa Rosa, who chairs the Assembly Health Committee, expected debate on the bills to focus on expanding the access to coverage to the largest number of undocumented adults or increasing the affordability of coverage to the middle class. Newsom's view is moving toward both objectives but leans more heavily towards making insurance more affordable for the middle class. Wood's bill shares this perspective. “In an ideal world, we shouldn't have to choose because both groups are struggling,” he asserted. “In the end, it's going to come down to the will of the Legislature and the resources that are available.” The legislation, Assembly Bill 174, would create a tax credit in 2020 for people with incomes between 400 and 600 percent of the federal poverty level who purchase insurance plans through the state's ACA exchange, Covered California. Senate Bill 65, introduced by Sen. Richard Pan, D-Sacramento, has similar objectives by limiting a consumer's portion of the premium cost and by subsidizing copayments and deductibles. Eligible people would earn between 200 and 400 percent of the federal poverty level. Four hundred percent of the federal poverty level for a family of two is $65,840. For a family of four it is $100,400. Consumers earning more than these levels do not qualify for federal subsidies through the insurance exchanges. Daniel Zingale, the governor's chief strategist, indicated that offering full Medi-Cal coverage to adult undocumented immigrants in the state would cost the state a significant amount of money. “Covering all undocumented uninsured individuals is estimated to cost about $3 billion (annually),” he stated. He said that the governor's proposals were more fiscally responsible. Zingale and Wood agreed that meaningful health care legislation is a possibility for California this year, but that it will need small steps. Wood did not think that California would choose single-payer health care for the time being. [FN14] “Until we have a federal administration willing to work with us, single-payer health care is impossible to accomplish,” Wood noted. NC Proposal to Cover Uninsured A proposal is pending in the North Carolina General Assembly that would extend health insurance to people who are uninsured. The Health Care for Working Families Act was proposed by House Republicans. They described it as private insurance managed by Medicaid providers rather than Medicaid expansion. People who are uninsured would be able to access coverage with a low premium and a copay for services. They would only be eligible if they fulfilled a work requirement. “What it does is covers a group of people that Medicaid expansion would cover. It just does it in a different way. And I fully support that,” indicated bill co-sponsor Representative Kevin Corbin. Democrats are in favor of a Medicaid expansion bill without a work requirement. They are pleased that at least both parties are considering the issue. “We could have Medicaid expansion for half a million of our citizens in November this year,” asserted Democratic Representative Joe Sam Queen. “It's 200 jobs in Haywood, Jackson, and Swain200 health care jobs this year.” He continued, “I'm very heartened that they're actually talking that we're actually negotiating.” “I think what we're really waiting to see is will the Republican leadership support this bill,” indicated Western Carolina University political scientist Chris Cooper. Cooper is hopeful that the bill will gain some traction. “36 states have expanded Medicaid in some ways. The idea is will North Carolina be the 37th? If it somehow gets out of both chambers it's almost certain that the Governor can really support it There's a lot of folks that could potentially get coverage. The question is what are the costs exactly going to be? And will those work requirements be palatable for Democrats and will the expansion of it all be palatable for some Republicans,” Cooper indicated. [FN15] The bill would grant money to rural hospitals to assist them in keeping physicians and expanding services. Maryland Legislation to Make Insurance Enrollment Easier © 2020 Thomson Reuters. No claim to original U.S. Government Works. -13- The Maryland General Assembly passed legislation that would improve access to insurance for uninsured Maryland residents. The law would require people without health insurance to check a box on their state tax returns to indicate whether they are interested in health insurance coverage through the state. According to Vincent DeMarco, who leads the Maryland Citizens Health Initiative, the “easy enrollment” bill would not cost the state much but would assist 120,000 Maryland residents in enrolling in health insurance plans. The legislature also passed a bill that enacted a patient's bill of rights and continued funding for a reinsurance program to help insurers [FN16] with the cost of the care of patients requiring the most expensive treatments. Colorado Reinsurance Bill Loses Momentum A Colorado bill that would create reinsurance to help state health insurance companies cover the cost of their most expensive beneficiaries stalled before a scheduled Senate committee hearing because of questions over the proposed payment mechanism meeting federal rules. Democrat state Sen Kerry Donovan, who represents a central Rocky Mountain district, is co-sponsoring the bill. The legislation is aimed at reducing the cost of health insurance for consumers by allowing the state to help insurers cover the cost of expensive care. Donovan indicated that her district has become the most expensive market for individual health insurance plans in the nation. She noted that the sponsors of the bill planned to work to find a solution to the payment mechanism issue. If HB1168 is passed, the state would be responsible for some of the costliest medical bills of patients insured through the individual market in Colorado. Approximately 250,000 people purchase individual plans. According to legislative economists, the program would cost $237 million in fiscal year 2020-2021. Federal funding would cover $117 million of the cost. The reinsurance program would help private insurers lower the cost of premiums on the individual market. Residents in some areas of Colorado pay $500 more per month for premiums than Denver residents. “When I say people are choosing between health care and a mortgage, that's not exaggerated,” Donovan indicated. Donovan pointed to reinsurance as a top priority for Democratic Gov. Jared Polis. She asserted that the legislation could lead to a 35-40 percent reduction in the cost of individual premiums for people living in rural parts of Colorado and a 15 percent reduction for people living in Denver. Beginning in 2020, the legislation could result in an average statewide decrease of 21 percent for the cost of premiums. Republican Rep. Janice Rich of Grand Junction, Republican Sen. Bob Rankin of Carbondale and Democratic Rep. Julie McCluskie of Dillon are co-sponsors of the bill. The Colorado Hospital Association began supporting the legislation only after the elimination of a provision that would have set reinsurance payments to hospitals to the same rates as lower Medicare payments. Under the bill, a rulemaking process would determine when reinsurance would cover the cost of individual patients. The legislation calls for partial funding for the plan by hospital fees over five years up to a maximum $500 million. Funding would also come from the federal government and revenue bonds from the Division of Insurance. “One of our goals this year is to lead by example. If we're going to tackle affordability, it's going to take all of us,” indicated Julie Lonborg, the hospital association's vice president of communications. The hospital association is ready to participate in rulemaking and creating a state request for federal permission for the program. The federal government must grant permission for the program because federal funding currently used for tax subsidies for people who purchase individual plans through the ACA would be used to cover two-thirds of the cost of the program. The Senate must approve of any changes to the bill and send the bill back to the House for approval. After creating reinsurance programs, at least seven states have experienced a decrease in the cost of health insurance by as much as [FN17] 20 percent. Additional states are attempting to create similar programs. Washington Law Protects People with Pre-existing Conditions Washington Gov. Jay Inslee signed a bill that will ensure Washington residents keep many of the consumer protections in the Affordable Care Act, including protections for people with pre-existing conditions. The law will prevent insurance companies from denying health coverage due to pre-existing medical conditions. Rep. Lauren Davis was a primary sponsor of the bill. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -14- “This bill assures Washingtonians that regardless of what happens in D.C., we're protecting your access to care here at home,” Inslee indicated. “This means you can't be denied insurance after surviving cancer, it means you can't be forced into bankruptcy because of a lifetime cap, and it means you can't be forced to pay for basic and essential health benefits such as contraception and mammograms.” In March, Inslee released a statement opposing the Trump administration's efforts to repeal the Affordable Care Act. He warned that the new Washington law will help health insurance consumers in the state, but that ACA protections are still necessary on the federal level. If the ACA is repealed, it would eliminate Medicaid expansion and subsidies for people with lower incomes, affecting 800,000 people in Washington. The Washington legislation is aimed at unfair consumer practices. It also shields many benefits linked to private health insurance coverage in the state. The law requires the state to offer and explain health plans to any resident regardless of health status. It also continues mandatory open enrollment periods and limits coverage cancellations. The law also prohibits annual and lifetime limits on coverage. It prohibits waiting periods and requires coverage of the ten essential health benefits required under the Affordable Care Act. Pam MacEwan, CEO of the Washington Health Benefit Exchange spoke about the importance of new legislation. “The provisions in the Affordable Care Act have been a positive for our state,” MacEwan stated. “Our customers have come to rely on them when making decisions related to their health plan and the coverage that they choose. Keeping them in place is not just [FN18] beneficial, it is necessary.” Kansas Allows Non-ACA Compliant Farm Bureau Plans Kansas Democratic Gov. Laura Kelly declined to block the effort of Republican legislators to allow the state Farm Bureau to offer health insurance plans that do not comply with the ACA. The insurance bill became law without Kelly's signature. It will exempt the bureau from state insurance regulations. Members will have access to the health insurance plans through the Farm Bureau. Kelly indicated that she has “serious reservations” about the measure, but that she would let it pass into law “as a demonstration of my genuine commitment to compromise.” Kansas Senate President Susan Wagle, a Wichita Republican, indicated that the law will help “Kansans struggling to afford coverage find new, affordable options.” Democratic legislators opposed the measure, arguing that it would allow the sale of health care plans that do not provide adequate coverage. The GOP-controlled legislature strongly supported the law. The law will take effect in July. Tennessee has had a similar law for decades. Iowa enacted a similar law last year. The law received strong support from Republicans in both rural and urban areas of the state as they continued to oppose the Affordable Care Act. Democrats in the state argued that rural communities would benefit more through Medicaid expansion as allowed under the ACA, which [FN19] Kelly proposed. The Kansas House passed a measure allowing Medicaid expansion. The Senate has not voted on the issue. House Passes Bill to Protect People with Pre-existing Conditions The House passed a bill that would keep protections given under the Affordable Care Act for people with pre-existing health conditions. Only four Republicans voted for the measure, which passed 230 to 183. The Republican-controlled Senate is not expected to hold a vote on the measure. The bill would prevent a Trump administration guidance from going into effect that would allow states to request waivers to reduce protections for people with pre-existing conditions in the ACA markets. Under the Trump administration guidance, CMS indicated that states could request such waivers as allowing people to use subsidies to purchase coverage outside the ACA exchanges. These plans include short-term health insurance plans that can deny people with pre- existing conditions coverage or charge them increased premiums. No states have yet asked for the waivers. CMS recently requested more ideas on waiver concepts and programs that could be allowed under the guidance, the State Relief and Empowerment Waiver plan. This measure is one of a several ways that Democrats are seeking to support people with pre-existing conditions. They recently passed a resolution condemning the Trump administration's efforts to eliminate the Affordable Care Act through the courts. It called the attempt “an unacceptable assault on the health care of the American people.” © 2020 Thomson Reuters. No claim to original U.S. Government Works. -15- Pending bills include a measure that would repeal the administration's extension of short-term plans and a bill that would restore funding to outreach and assistance during the open enrollment period for the health insurance exchanges. The Trump administration significantly reduced funding for marketing open enrollment and helping people enroll in plans. House Democrats and Republicans argued over the pending legislation, the Protecting Americans with Preexisting Conditions Act of 2019. “By encouraging states to promote and expand short-term insurance plans, the Administration is giving insurers the green light to directly discriminate against people with pre-existing conditions,” Energy and Commerce Chairman Frank Pallone, Jr., of New Jersey, indicated. “It's giving the greenlight for these plans to charge people with pre-existing conditions more money. And it's giving these plans the greenlight to refuse to cover any treatment that is related to someone's pre-existing condition.” The Trump administration and Republican legislators argued that the waivers would not directly affect people with pre-existing conditions. “The misleading title of this bill confirms the Democratic majority's passion to score political points instead of governing,” stated Rep. Greg Walden of Oregon, the Energy and Commerce Committee's top Republican. “Let me be very clear: this bill has nothing to do with protecting Americans with preexisting conditions. This bill has everything to do with eliminating health care options and choices for [FN20] states.” Montana Renews Medicaid Expansion, Imposes Work Requirements Montana Gov. Steve Bullock signed a bill that renews Medicaid expansion for the state but imposes new work and public service requirements for some enrollees. “When I first signed Medicaid expansion into law four years ago I said that lives would be changing and lives would be saved,” Bullock stated. Approximately 96,000 low-income adults in Montana access health insurance coverage through the Medicaid program. The Medicaid Reform and Integrity Act renews the expansion of the program. In 2015, Montana expanded Medicaid eligibility to adults who earn less than approximately $17,000 per year. The uninsured rate in the state has since deceased by half. Many also credit the expansion for keeping rural hospitals in the state from closing and helping other health care providers to receive payment for more of their services. Bullock praised the legislation that will renew the expansion of the program but he also called it “imperfect.” Republican legislators were able to add requirements to the law reauthorizing Medicaid expansion in Montana for some adult beneficiaries. The Obama administration prohibited such requirements. The Trump administration has allowed them. According to Rep. Ed Buttrey, a Republican from Great Falls, who sponsored the bill to reauthorize Medicaid expansion, called the changes “community engagement” requirements. “‘Skin in the game’ was always a point that if you benefit from the program, you need to help contribute to the success and funding of the program,” Buttrey indicated. Montana's majority party disagreed about the nature of the new work requirements. Some didn't think the requirements were strong enough. Montana Democrats opposed the addition of the work requirements to the reauthorization bill. They lacked support from Republicans to reauthorize the expansion without the work requirements. Without the legislation, Medicaid expansion would have expired at the beginning of July in the state. Heather O'Loughlin is with the Montana Budget and Policy Center. The organization focuses support on social services for Montana residents with low incomes. She indicated that legislators first wanted to reauthorize Medicaid expansion. Considering the new work requirements, she indicated, “It's important to note that we could see a loss of coverage of those that are currently enrolled accessing health care coverages.” O'Loughlin predicted that most of the people eligible through Medicaid expansion would keep their coverage. Analysis of the legislation from Gov. Bullock's office indicated that only 8,000 of the 96,000 people gaining coverage through Medicaid expansion in the state would be subject to the work requirements. About half of those people are expected to lose coverage. Democrats in the legislature unanimously supported the Medicaid Reform and Integrity Act, as did centrist Republicans. In the House and the Senate, conservative Republican leaders opposed the legislation. Senate Majority Leader Fred Thomas from Stevensville expressed concern over the number of people who would be exempt from the work requirements. He stated, “There's a lot of exemptions in it now and it's not what it ought to be.” Sen. Bob Keenan, a Republican form Bigfork, also commented on the exemptions. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -16- “We have exemptions that nobody would have to be held to community engagement work requirements if they're in an economically depressed area. Well that's almost the whole state.” According to Rep. Buttrey, the requirements were adequate. He noted that most people who qualify for Medicaid through the expansion of the program will be exempt from the 80-hour per month “community engagement” because they already have jobs. When Montana expanded Medicaid in 2015, twice the number of people who were expected to sign up for the program joined. Buttrey pointed to that incorrect estimation as proof that current estimates about how many people could be affected by the work requirements could also be miscalculated. “The only way we're gonna know is two years from now when we come back and we actually look at how many people fell into that category and how many people were disenrolled. And I don't think it's going to be 8,000 and 4,000. It will probably be something quite a bit different.” Montana's Department of Public Health and Human Services (DPHHS) will create a new system for Medicaid enrollees to report the fulfillment of their work and public service requirements. Before the work requirements can go into effect, federal Medicaid officials will have to approve them. DPHHS will have until the end of August to submit the waiver to the federal government. A federal judge has struck down work requirements for Medicaid expansion beneficiaries in two other states. According to the ruling, work requirements undermine the program's goal: allowing people with low-incomes to access health care. Buttrey noted that the Montana legislation could face similar challenges. “And there are going to be, I'm sure, potential court challenges. And we need to let those work through the system like the other states that have had them. But I think we did a great job, a good, responsible conservative solution, probably the best in the nation so far.” [FN21] Under the new law, the work requirements will go into effect on January 1, 2020. Maryland Law Aimed at Facilitating Health Insurance Coverage Enrollment Maryland Governor Larry Hogan is expected to sign a bill into law that will help facilitate enrollment in health coverage programs. The Maryland Easy Enrollment Health Insurance Program (MEEHP) was introduced by two Democratic legislators, Senator Brian Feldman and Delegate Joseline Peña-Melnyk. The Senate unanimously passed the bill 46-0. The House voted for it in a bipartisan bill of 123-15. The new legislation will utilize information from income tax filings to help people without insurance coverage determine eligibility for coverage programs. Maryland residents will be able to check a box on their state income tax return asking the exchange to determine if they are eligible for free or low-cost insurance programs. Relevant information will then be automatically sent to Maryland's health insurance exchange. The exchange will use that data along with other records to determine the person's eligibility for Medicaid, CHIP, and PTCs. If the available data does not show eligibility for one of these programs, the exchange will proactively reach out to the tax filer using the method the filer requested, or telephonic or electronic outreach. People eligible for Medicaid or CHIP will be asked to choose a managed care organization by a specific date. If they do not choose a plan or opt out of coverage, enrollment is Medicaid is automatic by default. If the tax filer or a member of their household cannot be confirmed as a U.S. citizen, the exchange will ask for additional affirmative consent before enrollment. This feature is designed to allow immigrants to assess their own “public charge” risks prior to enrolling in a government-sponsored health insurance program. If the tax filer is uninsured but deemed ineligible for Medicaid or CHIP due to income level, they will have a short special enrollment period (SEP) to choose a plan through the individual market. A filer will be eligible for the SEP if they file their return before a date the exchange specifies (most likely April 15 or earlier). The exchange will assess PTC eligibility as soon as possible and will encourage filers to access insurance by assisting in plan selection. The exchange will be permitted to compensate tax preparers and other entities for the number of clients successfully obtaining insurance coverage. On the tax form, a separate schedule will gather information regarding health insurance coverage. Tax filers listing uninsured household members must note if they wish the exchange to utilize information regarding those household members for purposes of determining eligibility for insurance coverage. No questions about immigration status or citizenship may be included in the tax return. The legislation is focused on making the check-box language clear and simple. The state's tax agency will be able to include explanatory details in the return instruction booklet rather than on the return. Any language used on the return will be subject to review by an advisory committee prior to finalization. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -17- Under the pending legislation, the new system of tax-based enrollment will be set to begin in January 2020. The state tax agency will be able to delay implementation by one year if the schedule is not feasible. It is likely that the plan will be implemented on schedule. An Application Programming Interface (API) will be set up between the tax agency's information technology (IT) system and the exchange's IT system. Advocates for the legislation expect that numerous uninsured tax filers will be found eligible for coverage. MEEHP is aimed at educating Maryland's uninsured tax filers about eligibility for financial assistance to help them access health insurance. Prior to the implementation of the ACA, Urban Institute released a study of the prevalence of federal income tax filing among uninsured people who were likely to gain coverage under the ACA. Maryland estimates ran along the lines of other states that expanded Medicaid eligibility. These estimates of federal tax returns included: 61 percent of Maryland's uninsured, Medicaid-eligible adults; 71 percent of the state's uninsured, Medicaid-eligible children; and 89 percent of uninsured Marylanders slated to qualify for PTCs. More recent Urban Institute estimates show strong connections between filing tax returns and being eligible for government-subsidized insurance coverage. In 2017, federal tax filers claimed earned income tax credits for 61.8 percent of uninsured children eligible for Medicaid or CHIP, 38.3 percent of adults without insurance who were eligible for Medicaid or CHIP, and 43.1 percent of all people lacking health insurance coverage who qualified for PTCs by having income not exceeding 200 percent of the federal poverty level. Uninsured people who did not claim an earned income tax credit also filed tax returns due to legal filing requirements and additional available tax refunds. Advocates for MEEHP asserted that using tax returns could help with one of the largest obstacles to health insurance coverage: lack of knowledge about eligibility for government insurance programs. In 2017, just over half of people who were uninsured (51 percent) were aware of government programs that help pay for health insurance. Only 45 percent of uninsured people with incomes below 250 percent of the federal poverty level were aware of these programs. Over 100,000 Maryland residents without health insurance are eligible for premium-free coverage through the government but are not enrolled in these programs. Over 15,000 uninsured children living in Maryland are eligible for Medicaid or CHIP. Over 36,000 Maryland adults without insurance are eligible for Medicaid. Advocates argued that facilitating enrollment in coverage for these uninsured people would slow the increases in cost of premiums for insured people due to the improved risk-pool of the individual market. It would also lower the amount of unpaid bills that contribute to [FN22] increased hospital costs for insurers. Connecticut Proposes Public Option Connecticut Gov. Ned Lamont and Democratic legislators revealed a proposal for state-subsidized health insurance in the state. Republicans and the health insurance industry quickly voiced opposition to the bill. Under the proposed law, coverage meeting or exceeding coverage provided by health plans would be offered. State-financed subsidies would be available to people who do not qualify for federal health insurance subsidies. The total cost of the expansion is unclear but estimates of the cost of the plan if fully implemented is as much as tens of millions of dollars per year. The plan, known as the Connecticut Option, requires passing votes from the House and Senate prior to the June 5 adjournment of the General Assembly. The plan would be available in 2022. The Office of Health Strategy, the comptroller's office, and actuaries would be responsible for figuring out the details of the plan. “This is a bill that gives us the best opportunity in a long time to expand access to people who don't have access to affordable health care and to bring down the cost of health care,” Lamont indicated. The state Office of Fiscal Analysis estimated to cost to create the ConnectHealth Plan at $1.5 million minimum in the state's 2020 budget. The following year, the cost would be $750,000. These funds would cover consulting services including actuarial and legal services. The legislation does not estimate the cost of state-financed subsidies for Connecticut residents choosing the plan. The Office of Fiscal Analysis indicated that the cost depends on how many subsidies the state will offer and the size of the subsidies. Lamont indicated that he worked “very closely with the insurance industry.” © 2020 Thomson Reuters. No claim to original U.S. Government Works. -18- The health insurance industry indicated that it would not support the bill but it did praise Lamont's work. “We believe the current legislation, as drafted, continues down the path toward government-run health insurance and we principally [FN23] cannot support its passage,” stated Susan Halpin, head of the Association of CT Health Plans. Executive Order Aimed at Health Care Price Transparency President Trump recently signed an executive order aimed at creating greater price transparency in health care by giving patients access to price information. The order is based on the theory that market forces will decrease prices if people shop around for health care. “Hospitals will be required to publish prices that reflect what people pay for services,” stated President Trump. “You will get great pricing. Prices will come down by numbers that you wouldn't believe. The cost of healthcare will go way, way down.” The executive order did not specifically lay out actions. It directed the Department of Health and Human Services to create a policy and undertake the long rule-making process. “The president knows the best way to lower costs in health care is to put patients in control by increasing choice and competition,” HHS Secretary Alex Azar indicated during a briefing for reporters. The executive order included five parts. Two of the parts directly address price transparency. Under the executive order, a new rule will be created to require that hospitals disclose prices to patients and insurers in “an easy-to- read, patient-friendly format,” according to Azar. He indicated that the new rule should “require health care providers and insurers to provide patients with information about the out-of- pocket costs they'll face before they receive health care services.” Some consumer advocates were in favor of the rule that the executive order aimed at creating price transparency regulations. Consumers currently don't have access to pricing information in the health care industry like they do when making decisions to purchase other goods or services. If the executive order leads to finalized HHS rules, it could make the health care industry operate more like other markets where quality and price influence consumer behavior. “Today patients don't have access to prices or choices or even ability to see quality,” indicated Cynthia Fisher, founder of a group called Patient Rights Advocate. “I think the exciting part of this executive order is the President and administration are really moving to put the patient in the driver's seat and be empowered for the first time with knowledge and information.” Administration officials stated that the details of the rules still needed to be determined. Stakeholders in the healthcare industry quickly spoke out against the plan. Hospital and health plan lobbying organizations asserted that the transparency requirement would make prices higher rather than lower. “Publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher — not lower — for consumers, patients, and taxpayers,” stated Matt Eyles, CEO of America's Health Insurance Plans. He argued that it will continue “the old days of the American health care system paying for volume over value. We know that is a formula for higher costs and worse care for everyone.” Other health economists and industry observers agreed. According to Larry Levitt, senior vice president for health reform the Kaiser Family Foundation, the idea of price transparency agrees with consumer protection objectives, but it doesn't guarantee that prices will decrease. “I'm skeptical that disclosure of health care prices will drive prices down, and could even increase prices once hospitals and doctors [FN24] know what their competitors down the street are getting paid,” Levitt argued. Cost of Premiums Increase in MA A recent study showed that employees in Massachusetts are paying significantly more for health insurance premiums, are responsible for a larger portion of their premiums and are paying increased out-of-pocket costs including deductibles. The Center for Health Information and Analysis released a report indicating that the average total monthly premium in the state in 2018 was $617 for single coverage and $1,687 for family coverage. In 2016, the average cost was $538/month for single coverage and $1,487 for family coverage. Researchers also found increases in other costs for employee health care. The average employee contribution in 2018 rose to 26 percent for single coverage and 30 percent for family plans. In 2016, those contribution levels were 23 percent for single coverage and 25 percent for family coverage. For employee-offered plans with deductibles, the average annual deductible for single coverage was $1,508 in 2018. The national average was $1,573. In 2016, the average deductible for a single plan in Massachusetts was $1,065. In 2018, seventy-one percent of employers in Massachusetts offered their employees health insurance plans. In 2016, that percentage was 65 percent. Overall in the United States, 57 percent of employers offered health insurance. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -19- In Massachusetts, 51 percent of employees chose insurance plans offered by their employers. The national coverage rate is 60 percent. Some employees receive coverage through their spouse's employer. Of Massachusetts employees who had access to employer health insurance plans, 67 percent chose to enroll in a plan. Nationally, the average is 76 percent of employees offered plans. Between 2016 and 2018, the rate of employees choosing an available employer-offered health insurance plan declined nationwide. Seventy percent of employers with between three and 199 employees offered their employees health insurance plans. Ninety-nine percent of employers with 200 or more employees offered health insurance plans. Employers reported their reasons for offering access to health insurance as employee retention and recruitment. Researchers found that employees that did not offer health insurance plans to employees most often cited the lack of requirements for small employers to offer coverage, employee coverage through government plans or other means, and high costs. For part-time employees in Massachusetts, researchers found only a ten percent coverage rate. Researchers noted that this rate is likely due to “employers setting eligibility requirements for insurance coverage and employees choosing not to enroll in their employer- [FN25] sponsored insurance as a result of alternative options or lack of affordability.” Health Care Costs Driving Premium Increases The American Academy of Actuaries released a new report showing that increases in health care costs and other factors are driving premium increases for 2020 plans. “Steadily increasing health care costs; the possibility of ongoing adverse selection caused by the draw of potentially cheaper, non- Affordable Care Act compliant plans; and the effects of other federal and state public policy changes are among the biggest drivers of 2020 premium changes,” stated Academy Senior Health Fellow Cori Uccello. “Premiums reflect federal and state rules and recent public policy actions affecting them as well as local market conditions, so the premium adjustments that individual policyholders see will vary considerably across the country.” The report, Drivers of 2020 Health Insurance Premium Changes authored by the Academy's Individual and Small Group Markets Committee pointed to the following key factors influencing 2020 individual market premiums: The growth of health care costs is expected to remain consistent with 2019 increases of about 5 to 8 percent. Policy changes making short-term limited duration plans, association health plans, and health reimbursement arrangements more available. The elimination of the individual mandate that required all U.S. citizens to carry insurance coverage. Uncertainty about expected risk adjustment transfers for insurers. Uncertainty regarding the cost-sharing reduction subsidies that the Trump administration chose not to honor. State action on reinsurance programs, individual mandates, and other legislation affecting the availability of coverage. [FN26] The reinstatement of the health insurance provider fee. Appeals Court Hears Arguments on Constitutionality of Affordable Care Act th The 5 U.S. Circuit Court of Appeals heard arguments about whether the Affordable Care Act is constitutional. The line of questioning gave the appearance that the court is inclined to rule the core provision of the law unconstitutional. Two of the judges on the three-judge panel were Republican appointees. They asked skeptical questions of the lawyers defending the law, implying that they possibly agreed with the argument that Congress made the insurance mandate unconstitutional when it eliminated the tax penalty for failing to obtain health insurance coverage. The Trump administration is in favor of invalidating the entire health care law. However, it was less clear if the court would agree to strike the entire law down. The lawsuit was brought in 2018 by 18 Republican-leaning states. They asserted that the elimination of the tax made the law an unconstitutional directive to citizens to purchase a product. According to a lower court ruling, the entire law should be invalidated. All provisions of the law would be eliminated, including popular requirements such as protections for people with pre-existing conditions. While questioning the supporters of the law, attorneys for 20 Democratic-leaning states and the House of Representatives, Judge Jennifer Walker Elrod indicated that the “command” of the law that people purchase health insurance coverage seemed to exist without the tax penalty. She questioned if the mandate was constitutional. Judge Kurt Engelhardt appeared to agree with this line of thinking. He also indicated that courts should not have to decide if the parts of the law should continue. He stated, “Congress can fix this.” © 2020 Thomson Reuters. No claim to original U.S. Government Works. -20- The Supreme Court will most likely hear the case after the appeals court rules on it. The same five-justice majority exists that twice voted to uphold the law. “This is a political solution that you, various parties, are asking the court to roll up its sleeves and get involved in,” Engelhardt indicated during the arguments. An attorney for the House of Representatives, Douglas Letter, asserted that the elimination of the tax penalty did not affect the underlying constitutionality of the law. He argued that Supreme Court precedent requires courts to seek to uphold as many provisions of a law as they can. “Remember that the kinds of provisions here that would be struck down if there's no severability are, for example, the provision about when you can be denied or charged more insurance for preexisting conditions,” Letter stated. “The provision about children can be kept on parents' insurance until they're 26 ...” The final ruling on the case will significantly affect many people, including those with pre-existing conditions, the 12 million people covered by Medicaid expansion, and the 10 million people who receive federal subsidies to help purchase coverage. In 2017, Congress eliminated the tax penalty imposed by the Affordable Care Act for failing to obtain health insurance coverage. Republicans attempted to fully repeal the law but failed. The Texas Attorney General's Office then initiated this lawsuit. The challengers to the law referred to the U.S. Supreme Court's 2012 ruling that upheld the legislation, conservative justices rejected the assertion that Congress could impose an insurance mandate based on the interstate commerce clause. However, Chief Justice John Roberts joined four liberal justices in stating that Congress could impose the tax penalty requiring insurance coverage. Supporters of the law argued that the plaintiffs have not been harmed by a tax that is not imposed, the tax has been reduced to zero, but the legal structure of the tax is intact, and that the possible unconstitutionality of the mandate does not affect the remainder of the law. Before the law was passed, both advocates and opponents to it agreed that a tax penalty was necessary to encourage people to obtain health insurance and keep the cost of premiums from becoming too expensive. However, the first year without a tax penalty resulted in only a slight decline of enrollment in private health insurance plans through the ACA exchanges. Enrollment decreased by approximately 300,000 from last year, with a total of 11.4 million people enrolling in plans. Judge Carolyn Dineen King did not ask any questions during the oral arguments for the case. She was nominated by Democratic President Jimmy Carter in 1979. U.S. Democratic Senators indicated that Republicans will face political consequences if the case eliminates the popular ACA. “If they are successful in striking down the Affordable Care Act, Republicans will own all of the consequences,” Senate Democratic Leader Chuck Schumer of New York noted. Senate Majority Leader Mitch McConnell indicated that the legislature would keep people with pre-existing medical conditions protected if the court struck down the ACA. “There's nobody in the Senate not in favor of covering pre-existing conditions, nobody,” the Kentucky Republican stated. He indicated [FN27] that he thinks the Supreme Court will ultimately decide the case. California to Extend Health Benefits to Undocumented Immigrants California Gov. Gavin Newsom signed a bill that will make California the first state to offer government-subsidized health insurance benefits to young undocumented adults. The law will make low-income, undocumented adults ages 25 and younger eligible for California's Medicaid program. In 2016, the state extended eligibility for government-subsidized health insurance to children under 18 regardless of immigration status. Government officials estimate that the new law will extend coverage to approximately 90,000 people. Most Democratic candidates running for president support extending health insurance benefits to undocumented immigrants. The Trump administration has continued with its hardline stance on illegal immigration. According to Gov. Newsom, “If you believe in universal health care, you believe in universal health care. We are the most un-Trump state in America when it comes to health policy.” Allowing undocumented immigrants access to health benefits is widely popular in California. Researchers found nearly two-thirds of state residents supported a plan to allow undocumented young adults access to government-subsidized health insurance. Researchers noted that California is home to more immigrants than any other state. Approximately 14% of immigrants living in California lack legal status. Nationally, people are less inclined to support health insurance coverage for illegal immigrants. According to a CNN poll, 59% of people do not think undocumented immigrants should access government-sponsored health insurance. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -21- Most states do not allow any access to federal health insurance programs, including Medicaid and Medicare for undocumented immigrants. Some cases are exceptions, including medical emergencies and pregnancies. California Republican legislators opposed the law, asserting that tax money should not be spent on people illegally living in the state. “We are going to be a magnet that is going to further attract people to a state of California that's willing to write a blank check to anyone that wants to come here,” stated Republican state Sen. Jeff Stone during a May legislative hearing. “We are doing a disservice to citizens who legally call California their home.” The plan covers only undocumented immigrants under 25 whose incomes are low enough to qualify. State officials predicted that about 138,000 California residents will be eligible for the program in the first year. It will cost the state $98 million. President Trump criticized the move. “It's crazy what they're doing. It's crazy. And it's mean, and it's very unfair to our citizens. And [FN28] we're going to stop it, but we may need an election to stop it.” Report: State Actions Improve Access to Health Insurance Available on Individual Market A new report released by the Kaiser Family Foundation showed state actions aimed at improving the affordability of health insurance through the individual market. Approximately 11 million consumers throughout the United States access health insurance through the individual marketplaces created by the Affordable Care Act (ACA). The cost of individual plans has increased significantly in most states in recent years. The cost of premiums for individual health insurance plans largely stabilized in 2019, however, the cost of the policies remained high overall. Consumers who qualify for federal subsidies to help cover the cost of individual plans are protected from the high cost of individual health insurance, but the subsidies are not available to some people with even moderate incomes. These people can find the cost of health insurance coverage unaffordable. In 2018, the number of people who did not qualify for federal subsidies purchasing individual health insurance plans through the exchanges decreased to 3.9 million from 6.8 million in 2016. Some states have initiated actions focused on making individual health insurance plans more affordable. Approaches vary by state. Some strategies are aimed at building and increasing the stability of the individual market, including creating reinsurance programs, implementing statewide individual mandates, and allowing for enhanced state-funded subsidies and public plan options. Other states have expanded access to lower cost coverage outside of the exchanges that does not comply with ACA requirements. This tactic could lead to increased prices for insurance available through the exchanges. Reinsurance has become popular among many states. These programs give funding to insurers to partially reimburse them for the cost of their most expensive claims. Insurers can pass these savings on to consumers in the form of lower premiums. Some states pay part of the claims for certain medical conditions while other states pay a percentage of claims over a certain amount. Researchers found data from Alaska, Minnesota, and Oregon showing that reinsurance programs resulted in lower premium increases than expected. The programs also prevented some insurers from exiting the individual market. However, these programs did not affect the affordability of insurance for consumers, particularly those with moderate incomes, especially older adults who found insurance premiums too expensive even after they were lowered by 10-15%. States have also found the cost of reinsurance programs problematic. Seven states (Alaska, Maine, Maryland, Minnesota, New Jersey, Oregon, and Wisconsin) have accessed federal pass-through funds under the ACA to help finance reinsurance costs. Four states (Colorado, Montana, North Dakota, and Rhode Island) have requested waivers for federal funding. The federal funding only partially covers the cost of reinsurance. Some states have also implemented state individual mandate requirements that residents obtain health insurance coverage. Congress eliminated the federal insurance mandate effective in 2019. Without the federal tax penalty, some people, mostly healthy consumers in the individual market, are expected to forgo health insurance coverage, potentially leading to higher costs for premiums. Massachusetts, New Jersey, Vermont, and the District of Columbia have implemented state individual mandates. California and Rhode Island recently passed legislation that will implement state mandates. Other states have created state-funded subsidies to improve the affordability of individual health insurance plans. Massachusetts and Vermont offer subsidies for people earning up to 300% of the federal poverty level. Proposals have surfaced in other states to enhance premium subsidies for people earning above 400% of the federal poverty level who are not eligible for the federal subsidies. California proposed temporary state-funded premium subsidies to consumers earning up to 600% of the federal poverty level. The state will enhance subsidies for people earning between 200 and 400% of the federal poverty level in 2020 and 2021. In Washington, recent legislation requires the state to develop a plan for premium subsidies for people earning up to 500% of the federal poverty level to limit the cost of individual insurance premiums to no more than 10% of household income. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -22- The cost of state-funded subsidies is a consideration. Massachusetts and Vermont were able to obtain Medicaid matching funds for their subsidies. States proposing to offer subsidies to people earning over 400% of the federal poverty level will not be able to access that federal funding. Many states have proposed public plan options that would be offered as qualified health plans (QHPs) in the state's marketplace or as a Medicaid or Basic Health Plan (BHP) buy-in plan available to moderate-income individuals. Of the many proposals, only Washington passed a plan for a public option. Colorado and New Mexico have enacted laws to develop such plans for review. Health plans that do not comply with the ACA are available in many states outside the exchanges. These plans include short- term plans, transitional or “grandmothered” plans, and Farm Bureau health plans. These plans can refuse coverage to people with preexisting medical conditions and do not have to cover the ten essential benefits required under the ACA. These plans can be up to 54% cheaper than plans on the exchange. States are also able to use waiver authority to cover subsidies to consumers purchasing these plans. The wider availability of these plans is expected to increase costs of ACA-compliant plans as more people exit the exchange markets. Researchers concluded that “These state policy choices have implications for the future stability of the marketplaces as well as on the [FN29] affordability and availability of comprehensive coverage for all residents.” Judge Rules in Favor of Short-Term Plans A federal district judge ruled in favor of the Trump administration's move to allow the expansion of short-term health insurance plans. An insurer group, the Association for Community Affiliated Plans, filed the lawsuit asking the court to prohibit the expansion of limited- duration health insurance plans. The organization stated it would appeal the decision. The organization represents not-for-profit health plans invested in ACA exchanges. U.S. District Judge Richard Leon in Washington, D.C., made the ruling. In his written decision, he noted that the 2018 regulation allowing the expansion of the short-term plans could help the insurance market. He disagreed with ACAP's assertion that the move would be detrimental to the exchanges. “Not only is any potential negative impact from the 2018 rule minimal, but its benefits are undeniable,” Leon indicated. He asserted that the elimination of the individual mandate penalty requiring people to obtain health insurance coverage increased the need for cheaper health insurance plans. He reasoned that people would go uninsured rather than pay for expensive health insurance plans available through the exchanges. They might purchase cheaper short-term plans and at least have some coverage. Leon asserted that although the ACA included “interdependent” reforms made to work together to improve the individual market, the law also allowed some insurance plans to continue outside of this framework. These plans include grandfathered plans in some state- specific risk pools. “In other words, lawmakers were not rigidly pursuing the ACA-compliant market at all costs, e.g. at the risk of individuals going without insurance,” he noted. Leon had previously suggested that ACAP should drop the lawsuit unless the organization had data showing irreparable harm to their business because of the short-term plans. The regulation was finalized in August 2018. It was implemented in October 2018. It allows short-term plans to be effective for 12 months at a time and renewable for up to 36 months. The plans can exclude people with preexisting conditions. They also do not have to cover the ten essential benefits required under the ACA, including prescription drug coverage, mental health coverage, and maternity coverage. Leon also indicated that he was hesitant to block the regulation without congressional action regarding the issue. He agreed with the [FN30] argument that Congress left room for agencies to interpret the statute by not directly addressing the extension of short-term plans. Federal Government Approves Individual Coverage Health Reimbursement Accounts The federal government issued a final regulation that will allow employers to offer individual coverage health reimbursement accounts (ICHRAs) in place of traditional group health insurance plans beginning in 2020. ICHRAs are account-based plans that reimburse employees for all or part of the expense of purchasing individual health insurance coverage when the employer does not offer a group plan. Employers must satisfy several conditions when offering ICHRAs, including: Determine that participants and their dependents are enrolled in qualifying individual coverage for each month they are covered by an ICHRA. The employer must not offer a traditional group health plan to participants covered by the ICHRA for the plan year. These plans include any group health plan that is not account-based. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -23- All employees in the same class must receive the same terms for any ICHRA offered to that class. Exceptions to this requirement include variations due to the number of dependents or age of the participant. Even with these exceptions, the maximum amount of money offered to the oldest participant may not exceed three times the maximum amount available to the youngest participant. New employees are subject to special rules. Variations are permitted between HSA and non-HSA ICHRAs. Eligible employees must be able to opt out of the ICHRA every year. Employers must comply with procedures confirming that participants and their dependents are enrolled in coverage under the ICHRA. Participants must provide employers with proof of enrollment, such as a document showing coverage or an attestation that they have coverage. Employees must confirm coverage with each ICHRA reimbursement. Prior to the beginning of the plan year (generally 90 days prior), employers must provide written notice to each participant including information about the ICHRA. The regulation includes a model note that employers may use. Employers may not offer the same class of employees an ICHRA and a traditional group plan. However, employers may offer different classes of employees a traditional health plan if they do not offer that class an ICHRA. Classes can include the following: Full- time employees, part-time employees, employees paid on a salaried basis, employees paid on an hourly basis, employees whose primary site of employment is in the same rating area, seasonal employees, employees covered by a particular collective bargaining agreement, employees who have not satisfied a waiting period, non-resident aliens with no U.S. source income, employees who are employees of a staffing agency, and a combination of these classes. The final regulations impose minimum class size requirements to prevent discrimination if the class is determined using full or part-time status, salaried or hourly status, or location within the same rating area. Classes of employees who are offered traditional coverage or no coverage are not subject to minimum class size requirements. Class sizes are generally based on the number of employees in a class prior to the start of the plan year. If the employer employs fewer than 100 people, the minimum class size is ten. If there are between 100 and 200 employees, the minimum class size is ten percent of total employees. [FN31] If the employer has over 200 employees, the minimum class size is twenty. Report: More People Uninsured According to a recent study by the Robert Wood Johnson (RWJ) Foundation, approximately 700,000 more individuals became uninsured between 2016 and 2017. During that same time period, the economy was doing well, incomes were increasing, and the rate of employers offering health insurance was increasing. “Losses of Medicaid/CHIP and private nongroup coverage increased uninsurance rates,” researchers noted. “Medicaid/CHIP coverage losses likely reflect increasing incomes and more workers, as well as fewer new Medicaid expansion states than in prior years (only Louisiana newly expanded Medicaid over this period). Private nongroup coverage losses may reflect various factors, including reduced subsidies because of increasing incomes, higher premiums in the subsidized and non-subsidized nongroup markets, insurer market exits, and lower spending on outreach and enrollment.” Researchers indicated that the increase in employer-sponsored insurance did not cover decreased enrollment in Medicaid, Children's Health Insurance Program, and the Affordable Care Act (ACA) marketplace. Researchers also noted that losses in the rate of people with insurance were the largest in states that did not expand Medicaid. Between 2016 and 2017, the number of people with employer-sponsored health insurance increased by over two million beneficiaries. The median household income increased by 2.36 percent from $60,309 to $61,732 during that same time period. The economy was doing well during that time period with two million adults joining the job market. Poverty rates decreased from 12.7 percent to 12.3 percent. Unemployment also decreased from 4.4 percent to 3.9 percent. The number of people living below 138 percent of the federal poverty level (FPL) decreased by 3.6 million. Researchers indicated, “These improvements in national and household economic circumstances alone would be expected to somewhat reduce uninsurance, because more families gain employment and insurance benefits via those jobs.” During that same time period between 2016 and 2017, the rate of people lacking health insurance coverage increased 0.2 percent. Researchers looked to the differences in uninsurance rates in age and income groups to identify the causes of the increase. They also looked at Medicaid expansion by state, race and ethnicity, level of education, industry and worker status, and geographical residence of uninsured people. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -24- The change most affected people who were not elderly with incomes between 138 and 400 percent of the FPL. The uninsured rate for this group increased by 0.6 percent or 600,000 people. The main factors for this group included lower rates of employer-sponsored health insurance plans and private nongroup coverage. Researchers pointed to Medicaid expansion status as an important factor in the uninsurance rate of states. States expanding Medicaid programs under the ACA saw uninsurance rates that remained at 7.6 percent, except for families with incomes between 138 and 400 percent of the FPL, who saw uninsured increases of 0.3 percent. States that chose not to expand Medicaid coverage experienced a 0.5 percent increase in people without insurance coverage. In those states, private nongroup coverage, Medicaid and CHIP coverage for people living below 138 percent of the FPL, and people between 138 and 400 percent of the FPL with employer-sponsored plans all experienced increases in uninsurance. Researchers pointed to several factors leading to these increases. People with unsubsidized health insurance plans in non-expansion states were affected by increasing premiums. People with subsidized plans in non-expansion states must find health plans that are available in their geographic location and fit their budget after the subsidy. The subsidies are not applicable to Medicaid or CHIP. Non-expansion states also experienced a larger impact from policy changes such as the expansion of short-term plans, limited open enrollment, and reduced cost-sharing that negatively affected the ACA marketplaces. The removal of the individual mandate requiring people to obtain insurance coverage or face a tax penalty also caused turbulence in [FN32] the individual market and increased the rates of uninsurance. Average Annual Family Insurance Premiums Top $20K According to a new survey by the Kaiser Family Foundation, the cost of family premiums for employer-sponsored health insurance increased 5% to an average of $20,576 in 2019. The organization recently released the 2019 benchmark KFF Employer Health Benefits Survey. During the same time period, workers' wages increased 3.4% and inflation increased two percent. Researchers found that workers contributed an average of $6,015 to the cost of family coverage. Employers covered the remaining cost. In spite of the strong economy, the cost of health insurance for employers and employees continued to increase more rapidly than earnings and inflation. In ten years, the average cost of family premiums increased 54%. Employee contributions to health insurance costs have increased 71%. In that same time period, wages increased 26% and inflation increased 20%. Approximately 82% of employees with employer-sponsored insurance have deductibles. This rate has increased 63% from 2009. The average deductible is $1,655. Ten years ago, the average deductible was $826. Combined, these increases add up to a 162% increase in the cost of deductibles for all workers with employer-sponsored health insurance. About 28% of all workers with health insurance coverage and 45% of employees of small businesses with 200 or fewer employees have deductibles of $2,000 or more. That number is nearly four times more the number of workers facing deductibles that costly ten years ago. One in eight covered employees have deductibles of at least $3,000. “The single biggest issue in health care for most Americans is that their health costs are growing much faster than their wages are,” KFF President and CEO Drew Altman stated. “Costs are prohibitive when workers making $25,000 a year have to shell out $7,000 a year just for their share of family premiums.” Approximately 153 million Americans have employer-sponsored health insurance plans. Researchers gathered information from over 2,000 small and large employers to complete the survey. Select findings of the survey are available in an article published in the journal Health Affairs, “Health Benefits in 2019: Premiums Inch Higher, Employers Respond to Federal Policy.” Researchers indicated that low-wage employees particularly face challenges with accessing affordable health insurance coverage for families. Employers with many employees earning $25,000 or less per year offer fewer employees health insurance coverage. They also charge their employees higher premiums than other employers. Two-thirds of employees of lower-wage employees have access to health insurance plans through work. Other employers offer 81% of their employees coverage. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -25- The cost of family premiums at firms with low-wage employees cost an average of $17,633, which is 15% less than the cost of plans at other firms. However, the workers at low-wage firms contribute an average of $7,047 for health insurance coverage. At other firms, the average contribution is $5,968 per year. The higher costs for workers at lower-wage firms results in fewer employees participating in employer-offered health insurance plans. One in three employees of lower-wage firms receive coverage through employers offering plans. At other firms offering health insurance plans, 63% of employees participate. “Employer-sponsored coverage doesn't come cheap for employers or workers, and many who work at low-wage firms or small business likely find it too costly to cover their families,” indicated Gary Claxton, a KFF senior vice president and director of the Health Care Marketplace Project, and the lead author of the study and Health Affairs article. Only 9% of employers with at least 50 employees that offered health insurance plans indicated that the elimination of the individual mandate penalty requiring people to obtain coverage led to fewer employees choosing coverage. The survey showed that 57% of employers offer employees health plans. This rate is the same as 2018. Ten years ago, the rate was 59%. Larger employers are more likely to offer health insurance plans. Almost all (99%) of employers with 200 or more workers offered plans. Forty-seven percent of firms with 3-9 employees offered coverage. Small employers most often blamed cost as the reason for not offering coverage. Most large employers offered health benefit plans that covered spouses. Eleven percent of large employers did not allow spouses to enroll in plans if they had another source of coverage. Of employers offering coverage to spouses, ten percent charge more for the spousal coverage. Researchers gathered information for the survey between January and July of 2019. The employers selected included 2,012 non- [FN33] federal public and private firms with three or more employees. CT to Negotiate Health Care Prices Connecticut will undertake a new role in negotiating prices that health care providers charge for treating public-sector employees and retirees. According to comptroller Kevin P. Lembo, the new bidding process will significantly change the healthcare market in the state. “Employers across the country have long ceded control, responsibility and oversight of health care purchasing to health insurance corporations – but that old way of doing business has been broken for some time,” Lembo noted. “We are no longer going to take a hands-off approach.” The state health plan is self-insured, which means it covers the cost of healthcare for approximately 210,000 employees and retirees. It assumes the financial risk of providing treatment without an insurance company. However, the state currently uses two major insurance companies, Anthem and UnitedHealthcare, to negotiate the cost of health care with providers. The companies also process claims for the state. Lembo issued a request for proposals that relies on third-party administrators but also gives the state a direct role in negotiating prices with healthcare providers. The third-party companies will help the state during the negotiating process. The current system relies on insurance companies to negotiate for Connecticut. Those companies' interests are not always aligned with the state's interests while negotiating those prices. As an example, insurance companies might be hesitant to ask health care providers for lower prices for health treatments if those providers are likely to respond by exiting the insurer's network. According to Lembo, inserting the state as the head of the health care cost negotiation process will also prevent providers from frequent ordering of duplicative tests that waste the state's healthcare funds. “We are preparing for a new market-altering dynamic where the state will ensure that corporate health care interests are better aligned with the interests of patients, health care providers and the state of Connecticut health plan,” Lembo indicated. The new hierarchy of the negotiation process will affect the benefits for state employees, state employee retirees under age 65, and other public-sector and nonprofit workers receiving health insurance coverage through the general state plan. In 2017, Connecticut implemented a similar change for its negotiating process for costs related to its Medicare plan. The Medicare plan affected serves 490,000 eligible retirees age 65 and over in Connecticut. Lembo indicated that it is too soon for predictions about the amount of savings from the new negotiating strategy. The similar 2017 [FN34] changes to the Medicare program in Connecticut are saving tens of millions of dollars annually. Maine Receives Health Insurance Grant © 2020 Thomson Reuters. No claim to original U.S. Government Works. -26- Maine received a $750,000 grant from the Robert Wood Johnson Foundation aimed at improving health insurance coverage in the state. Governor Janet Mills and the Maine Health Access Foundation (MeHAF) announced the award of the grant. The money will be used for outreach and marketing, consumer education, and enrollment assistance in 2019 and 2020. Funding will support a unified campaign to encourage enrollment in MaineCare, the state's Medicaid program and enrollment in private health insurance plans through the federal health insurance exchange, HealthCare.gov. MeHAF will continue to support outreach for the health insurance exchange. The grant will also go towards research aimed at more fully understanding and serving the Maine population eligible for the expansion of Medicaid. The research will cover educating small businesses about health insurance options for employees. “Ensuring that Maine people have access to high-quality, affordable health care is a top priority for my Administration, and through MaineCare expansion we have made significant progress, providing critical, even life-saving health insurance to more than 37,000 people across the state,” stated Governor Mills. “But we can do more. This grant from the Robert Wood Johnson Foundation will support outreach out to more Maine people to help them better understand their health insurance options and sign up for the coverage they need to live healthy lives and contribute to the growth of our state.” “More than 37,000 people across Maine now have insurance through the expansion of MaineCare, but we want to reach everyone who still struggles to afford preventive care, doctor's visits, and medication,” said Health and Human Services Commissioner Jeanne Lambrew. “With support from the Robert Wood Johnson Foundation and the Maine Health Access Foundation, Maine will be better positioned to help consumers understand their options for MaineCare or private plan coverage.” “Health insurance coverage is not the only piece in the puzzle to ensure access to care, but it is the critical first step,” stated Barbara Leonard, President and CEO of MeHAF. “We're pleased to partner with Maine DHHS with support from the Robert Wood Johnson Foundation to leverage philanthropic, state government, and nonprofit organization resources so that more people in Maine have coverage.” The efforts at outreach and marketing will begin in October. They will focus on MaineCare expansion and the open enrollment period for the health insurance exchange beginning on Nov. 1, 2019 and ending Dec. 15, 2019. The outreach efforts will educate consumers and small businesses about their options for health insurance coverage based on income levels and size of households. The Maine Department of Health and Human Services worked alongside MeHAF to obtain the grant. MeHAF distributed the grant funding to organizations that provide education and enrollment assistance directly to consumers of health insurance The organizations receiving funding include: Consumers for Affordable Healthcare, Maine Equal Justice, Western Maine Community Action, Maine Primary Care Association, Wabanaki Public Health, Maine Access Immigrant Network, City of Portland – Minority Health, and Maine Mobile Health Program. Recent Census data showed that 27.5 million Americans were uninsured in 2018. In Maine, 106,000 people lacked health insurance coverage. This number is eight percent of the population in the state. Maine residents earning less than $17,236 per year are eligible for coverage under MaineCare. A family of three earning less than $29,435 is eligible. Families earning less than $85,320 per year and single people earning less than $49,960 per year are eligible for a [FN35] federal tax subsidy to purchase a private health insurance plan through the federal health insurance exchange. Colorado Releases Draft of Public Option Officials in Colorado released a draft report on the proposed state public health insurance option. Health care providers were critical of the plan for including lower reimbursements for health care services. In May, Colorado Gov. Jared Polis (D) signed a bill requiring state officials to create a public health insurance option. The bill called for the development of a plan to create a public health insurance option by the Colorado Department of Health Care Policy and Financing (HCPF) and the Department of Regulatory Agencies. The public health insurance option is meant to compete with private health insurance plans offered for sale by insurers in Colorado on and off the state's health insurance exchange that was created by the ACA. The departments have until November to submit a plan. The plan must “assess costs, funding sources, necessary federal permissions and funding, consumer eligibility, and who in government would run the program.” The proposal is 196 pages and includes a plan for a public health insurance option. The option is designed by the state and would be administered by private insurance companies by January 2022. Under the plan, private health insurers over a specified size would have to sell the state option health plan. The plans would be available both on and off the state's health insurance exchange. According to the report, the plans would be accessible to “all Colorado residents who buy their own individual health insurance.” © 2020 Thomson Reuters. No claim to original U.S. Government Works. -27- Colorado residents who qualify for federal tax subsidies to purchase private health insurance plans would be permitted to use those subsidies toward purchasing the public option plans. The proposal enables private insurers to create the structure of premiums and deductibles. However, they would be constrained by a set of requirements. These requirements include a new medical loss ratio (MLR). Currently, the ACA has an MLR of 80%. Insurers are required to spend 80% of premiums for individual and small group plans on medical care and quality improvements or refund customers. The proposal would change the MLR threshold in Colorado to 85% for insurers administering the plans. Additionally, plans would need to include coverage for all ACA essential health benefits. Many services would be covered pre- deductible, including behavioral, preventive, and primary care. Private insurers would also be responsible to applying for prescription drug rebates to help lower the cost of medications for state option health plans. The private health insurers administering the state option health plans would contract with health care providers. State officials, however, would set the rates of payment for those providers' services. The plan calls for rates of 175% to 225% of Medicare charges for the same services. Currently, Colorado providers charge an average of 269% of Medicare's charges for services through private health insurance. According to state officials, these lower rates would make up the bulk of the savings from the state option plans. Lower payment rates would translate to savings of 9% to 18% on monthly premiums. The state officials also indicated that these lower premiums should result in savings for the government on the cost of subsidies for people who purchase health insurance through the exchange. The public comment period for the draft proposal will be open until October 25, 2019. The proposal will be submitted to the Colorado legislature by November 15. Colorado officials are also planning to apply for a “state innovation waiver” request from CMS. This waiver would allow the state to keep some of the savings the federal government would gain from the lowered costs if the proposal goes forward. State officials planned on using premium tax credit pass through funding to lower out-of-pocket costs for consumers choosing the public option. Costs would decrease from $133.6 million to $69.7 million. Officials are planning on applying for the waiver by the summer of 2020. An actuarial analysis from the firm Wakely predicted that the proposal would increase enrollment in the individual market in Colorado by 4,600 to 9,200 in the first year. The state's limited involvement in managing the plan would help to offset any medical claims that [FN36] exceeded the cost of premiums preventing a tax increase for Colorado residents. CT Studies High Deductible Health Insurance In Connecticut, a task force is studying high-deductible health plans and access to coverage. The issue is complicated, indicated Susan Halpin, a task force member and a lobbyist for the health insurance industry. “Premiums and deductibles are a reflection of health care costs,” Halpin asserted. She argued that the costs are linked, so a reduction in the cost of deductibles will lead to increases in the cost of monthly premiums. She also noted that high-deductible plans have led to a closer focus on the value of the cost of care. Halpin argued that the high- deductible plans motivate consumers to look at the cost of care and shop for lower prices on healthcare services. According to studies, high-deductible plans do not motivate consumers to search for lower-priced care. The National Bureau of Economic Research found that only 1 percent of 50,000 patients receiving non-emergency outpatient MRIs on lower limbs used a price-comparison tool to choose an MRI provider. Ninety-nine percent of patients went to the MRI provider that their doctor recommended. Lynne Ide, director of program and policy for the Universal Health Care Foundation, pointed to a 2019 Benchmark Employer Health Benefits Survey showing that deductible cost have increased by 162 percent in the last decade. In Connecticut, 63 percent of residents with individual plans have high-deductible plans, according to the 2018 US Medical Expenditure Panel Survey. Fifty-five percent of Connecticut residents with family plans have high deductibles. The number of Connecticut employees with high-deductible plans increased from 2017 to 2018. Joseph McDonagh, an insurance agent and member of the task force indicated that he doesn't think there is much that can change the current marketplace. He called himself an outlier for holding this position. © 2020 Thomson Reuters. No claim to original U.S. Government Works. -28- He pointed to the plans offered in 2015 through the state's health insurance exchange, noting that only one had no deductible. In 2019, all plans offered through the exchange included a deductible. McDonagh also indicated that the deductible for a 2019 silver level health insurance plan is 50 percent more than the deductible for the same plan four years ago. Overall out-of-pocket costs for the same plans have increased by 30 percent. He also argued that there has been a trend toward changing which health services apply to the deductible. Specialists and emergency room visits are now more likely to be part of a deductible before the insurance company pays out anything under the co-pay of the insurance policy. He encouraged the task force to focus on how deductibles are applied and which services are part of the deductible. “There are perhaps some things nibbling around the edges that we might be able to accomplish,” McDonagh stated. However, Halpin cautioned that proposals from the task force will only affect 35 percent of the health insurance marketplace. The state legislature and Insurance Department only have control of that portion of the market. Employers that offer self-insured plans do not have to follow state regulations, only federal law. According to health care advocate Ted Doolittle, the chair of the task force, high-deductible plans are necessary in the market. Dr. Andrew Wormser, the past president of the Connecticut Society of Internal Medicine argued that there is a question about whether the high-deductible plans should exist. He called the plans “a very harsh method of cost-sharing and they're regressive.” He indicated that he is “horrified at the way the incentives for healthcare change with the dates on the calendar.” People with deductibles are more likely to delay treatment until the end of the year when they have met deductibles. “Something we should explore, in my opinion, is no deductibles,” Wormser asserted. Doolittle pointed out that no other states are currently studying high-deductible plans in relation to the health insurance market, so the task force in Connecticut puts the state on the cutting edge of the issue. “It is a complicated issue and maybe that's why it hasn't been tackled,” Doolittle stated. He put the timeline for creative solutions to the issue at early next year. The task force will submit a report to the legislature's Insurance [FN37] and Real Estate Committee in February. California to Provide State Subsidies California will offer some state residents subsidies to help purchase health insurance coverage beginning in January 2020. Open enrollment for Covered California starts in October and ends Jan. 31 for plans available through Covered California, the state's health insurance exchange where health insurance companies offer individual health insurance plans to consumers who cannot access health insurance through their employers. California residents signing up by Dec. 15 will have coverage beginning Jan. 1. People signing up between Dec. 16 and Jan. 31 will have health plans that begin on February 1, 2020. Approximately 235,000 middle-income California residents will become eligible for the new state-sponsored subsidies in 2020. It will be the first time that California has offered subsidies to residents to help purchase private health insurance plans. Federal subsidies are available under the Affordable Care Act for people who make between about $17,000 to $50,000 per year. People making between 138% and 400% of the federal poverty level are eligible for the federal subsidies. California will now offer residents earning between $50,000 and $75,000 per person subsidies to help cover the cost of private health insurance plans. People making between 400% and 600% of the federal poverty level will be eligible for the subsidies to purchase plans through the exchange. The amount of the subsidy will vary depending on income. People with higher incomes will qualify for a lower subsidy. Eligible California residents who purchase private health insurance plans through the state's health insurance exchange currently qualify for federal subsidies toward the cost of the plans. Now, an additional 663,000 California residents will become eligible for the new state subsidy. The ultimate amount of the subsidies claimed by Californians will depend on the age of the residents and the cost of health insurance plans in their geographic region. According to Covered California officials, eligible residents will receive an average of $15 per household per month from the state subsidy. The state subsidy will be in addition to any federal subsidy the residents receive because of the ACA. Cost to the State © 2020 Thomson Reuters. No claim to original U.S. Government Works. -29- In 2020, the subsidies will cost California approximately $429 million. Officials predicted that most of the cost, $317 million, will be covered by new tax penalties imposed by the state on people who do not obtain insurance coverage. California's individual mandate to obtain health insurance coverage will be implemented in 2020. Penalties for people who fail to obtain insurance will be $695 per adult and $347.50 per child per year, or 2.5% of annual household income, whichever is higher. [FN38] The Franchise Tax Board will collect the penalties. Federal Judge Temporarily Bars Rule Requiring Immigrants to Have Health Insurance A federal judge issued a temporary restraining order preventing the Trump administration from implementing a rule that would require immigrants to prove that they have health insurance coverage or means to cover medical care before they can become eligible for visas. Judge Michael Simon of the U.S. District Court for the District of Oregon made the ruling. The Trump administration rule required immigrants to show that they had insurance coverage or could obtain it within 30 days of entering the United States. The temporary restraining order will remain in effect for 28 days. The Justice Action Center, Innovation Law Lab and the American Immigration Lawyers Association asserted that the Trump administration's rule was “plainly illegal.” They argued that it would cause immediate and irreparable harm. The lawyers wrote in the motion asking for the temporary restraining order, “This new requirement rewrites our immigration and health care laws.” The lawyers indicated that the rule would prevent up to 375,000 qualified immigrants each year from entering the United States. According to the Trump administration, immigrants are “about three times more likely” than U.S. citizens to lack health insurance. The administration argued that immigrants “should not further saddle our health care system, and subsequently American taxpayers, with higher costs.” The White House spoke out against the ruling, asserting that Trump has the power to change the immigration policy of the United States. In press secretary Stephanie Grisham's statement, she asserted, “It is wrong and unfair for a single district court judge to thwart the [FN39] policies that the president determined would best protect the United States health care system.” Florida Creates Health Care Transparency Website Florida has created a website aimed at assisting health care consumers obtain information about pricing of health care services. Governor Ron DeSantis announced the website launch. The website will help consumers compare prices for common health care services. It will utilize information provided by insurers from almost 70 million claims. In some instances, consumers will be able to determine cost estimates at specific hospitals or health care providers. DeSantis stated that the website is part of an effort to lower health care costs for residents of Florida. “We think that this is a powerful tool that can be used as we look to innovate in health care and to save costs,” DeSantis indicated. “I think most people, they want high quality care but they want it in the most cost effective way and so that's what we're trying to do.” He pointed to an example of the cost of a knee replacement that varies from $33,000 to $54,000 in the Tampa area. “That's a difference of $21,000,” he noted. “In other areas of life you probably wouldn't have that unless there's some obvious benefit for quality.” Florida's Agency for Health Care Administration will operate the website. Consumers will also be able to research the quality of services for specific providers. The website currently contains information about 44 common non-emergency health care procedures. It includes average costs for over 200 services by county, state, and the nation overall. The website informs consumers that costs can vary based on insurance coverage and the deductibles of their plans. Costs can also vary due to the health of the patient. According to Rep. Chris Sprowls, of Palm Harbor, the prevalence of high deductible health insurance plans makes the need for price transparency even higher. He noted that deductibles can be over $5,000 per person in high-deductible plans before insurance will cover any of the cost. He was a sponsor of a bill that led to the creation of the website. “The reality is most people know more about the television that they are going to buy than the person who is going to do their heart surgery.” Sprowls indicated. “That's not acceptable. So we're trying to pull back the curtain to arm consumers with information so they © 2020 Thomson Reuters. No claim to original U.S. Government Works. -30- can begin to shop with the same veracity for the person who is going to do their surgery as they do for the consumer product that they are going to buy at a retailer.” Mary Mayhew, secretary of the Agency for Health Care Administration indicated that Florida will lean on Medicaid purchasing power and the state employee health insurance plan to help to increase transparency and accountability in the health care system. Mayhew also indicated that the state plans to partner with large employers like Walmart to help accomplish those goals. “Medicaid is a huge purchaser of health care in this state -- $28 billion a year spent on health care a year for nearly 4 million Floridians,” she stated. “Through our collective purchasing power we can promote high-quality, affordable care by moving the health care market to reward providers who are adhering to evidence-based practices, clinical protocols supported by research.” Mayhew stated that the goal is to discourage providers from ordering unnecessary procedures that increase the cost of health care overall. DeSantis also announced the creation of a yearly award for the provider making the most effort toward accessible and transparent [FN40] health care in the state. MI Legislation Aimed at Insurance Pre-Approvals Legislation pending in Michigan would prevent insurers from extensive use of cost-control methods requiring pre-approvals for care. Physicians and health care advocates said these methods delay care, frustrate patients, and create expenses for providers. Once insurance pre-approvals were limited to newer, expensive services and medications. Currently, physicians asserted that pre- approvals now limit necessary, routing, and less expensive treatments. Physicians argued that the pre-approvals create unnecessary administrative hurdles for patients. According to Dr. Bobby Mukkamala, an ear, nose and throat specialist in Flint, “It's a very inefficient use of our time, and then the worst part of it is those CT scan requests get approved in excess of 90 percent of the time, more like 95 percent,” he said. “It's really just a way to delay care in the hopes ... that some people will give up and just not do it.” Mukkamala heads the Michigan State Medical Society, an organization created by physicians to support the legislation limiting pre- approvals. Insurers require prior authorization for services and medication, sometimes requiring step therapy, which forces patients to try cheaper medications and treatments before more expensive measures. Insurers argued that these cost controls are necessary, but they can affect patients with a variety of chronic diseases. Under the legislation, insurers would have to post their prior authorization requirements on their website along with statistics about approval rates for the medications and treatments. Insurers would have to give providers 60 days' notice of any new requirements. The requirements would need a basis in peer-reviewed clinical data and information from practicing physicians. Only physicians practicing in the same specialty as the patient's physician could make adverse determinations. [FN41] Insurers would also face time limits on authorization requests, 48 hours, or 24 hours for urgent requests. © Copyright Thomson/West - NETSCAN's Health Policy Tracking Service [FN1] . Rosato, Donna, “What the Latest Court Ruling on the ACA Means for Your Health Insurance,” Consumer Reports, December 31, 2018, available at https://www.consumerreports.org/health-insurance/what-latest-court-ruling-means-for-your-health-insurance/. [FN2] . Michigan Medicine-University of Michigan, “Pre-Medicare years bring health insurance worries for many, U-M/AARP poll finds,” EurekAlert The Global Source for Science News, January 3, 2019, available at https://www.eurekalert.org/pub_releases/2019-01/mm-u- pyb122118.php. [FN3] . Ho, Sally, and Geoff Mulvihill, “Making health care more affordable,” Sunbury News, January 13, 2019, available at https:// www.sunburynews.com/opinion/24220/making-health-care-more-affordable. [FN4] © 2020 Thomson Reuters. No claim to original U.S. Government Works. -31- . Fram, Alan, “Dem-led House moves to join health care law case,” KKTV, January 4, 2019, available at https://www.kktv.com/content/ news/Dem-led-House-moves-to-join-health-care-law-case-503909701.html. [FN5] . Witters, Dan, “U.S. Uninsured Rate Rises to Four-Year High,” Gallup, January 23, 2019, available at https://news.gallup.com/ poll/246134/uninsured-rate-rises-four-year-high.aspx. [FN6] . Associated Press, “Trump rule changes expected to raise Obamacare health-insurance premiums,” MarketWatch, January 18, 2019, available at https://www.marketwatch.com/story/trump-rule-changes-expected-to-raise-obamacare-health-insurance- premiums-2019-01-18. [FN7] . Kovaleski, Jennifer, “Would a health reinsurance program work in Colorado? Polis says program would curb health care costs,” The Denver Channel, January 28, 2019, available at https://www.thedenverchannel.com/news/360/gov-polis-wants-to-create-a-reinsurance- program-to-deal-with-soaring-health-insurance-costs. [FN8] . Alonso-Zaldivar, Ricardo, “White House report tries to shift Trump health care rhetoric,” AP News, February 8, 2019, available at https://www.apnews.com/922ab9a3de864e2cb4a6ccaba37547f1. [FN9] . Galewitz, Phil, “Shrinking Medicaid Rolls In Missouri And Tennessee Raise Flag On Vetting Process,” Kaiser Health News, February 8, 2019, available at https://khn.org/news/shrinking-medicaid-rolls-in-missouri-and-tennessee-raise-flag-on-vetting-process/. [FN10] . Andrews, Michelle, “Progressives Tout ‘Medicare-For-All’ But States Eye ‘Medicaid Buy-In”’ Kaiser Health News, February 26, 2019, available at https://khn.org/news/progressives-tout-medicare-for-all-but-states-eye-medicaid-buy-in/. [FN11] . Marso, Andy, “Kansas GOP pushes for cheaper health plans that may not cover pre-existing conditions,” The Kansas City Star, February 21, 2019, available at https://www.kansascity.com/news/business/health-care/article226468970.html. [FN12] . Kent, Jessica, “11.4M Consumers Selected ACA Health Insurance Exchange Plans in 2019,” Health Payer Intelligence, March 28, 2019, available at https://healthpayerintelligence.com/news/11.4m-consumers-selected-aca-health-insurance-exchange-plans-in-2019. [FN13] . Wamsley, Laurel, “Trump Administration Says Entire Affordable Care Act Should Be Repealed,” NPR, Martch26, 2019, available at https://www.npr.org/2019/03/26/706869835/trump-administration-now-says-entire-affordable-care-act-should-be-repealed. [FN14] . Bharath, Deepa, Michael Finch II, Sophia Bollage, and Sammy Caiola, “22 ways California could make health care more affordable and accessible,” The Sacramento Bee, April 8, 2019, available at https://www.sacbee.com/news/local/health-and-medicine/ article228863604.html. [FN15] . Hodge, Rex, “Another Health Care Proposal to Cover NC Uninsured,” WLOS, April 10, 2019, available at https://wlos.com/news/local/ another-health-care-proposal-to-cover-nc-uninsured. [FN16] . Cohn, Meredith, and Pamela Wood, “Maryland legislature passes laws to make health insurance enrollment easier and create drug price board,” The Baltimore Sun, April 11, 2019, available at https://www.baltimoresun.com/health/bs-hs-health-laws-pass- legislature-20190409-story.html. [FN17] © 2020 Thomson Reuters. No claim to original U.S. Government Works. -32- . Associated Press, “A Reinsurance Bill That Would Lower Health Care Premiums Has Temporarily Stalled,” Colorado Public Radio, April 18, 2019, available at https://www.cpr.org/news/story/a-reinsurance-bill-that-would-lower-health-care-premiums-has-temporarily- stalled. [FN18] . Washington Governor's Office, “Inslee signs bill that protects ACA health care insurance practices,” Medium, April 17, 2019, available at https://medium.com/wagovernor/inslee-signs-bill-that-protects-aca-health-care-insurance-practices-9f3f6097757d. [FN19] . Hanna, John, “Kansas to let Farm Bureau health coverage avoid ACA rules,” AP News, April 19, 2019, available at https:// www.apnews.com/8c6f552e504e490b8ce2cd7d753e1995. [FN20] . Luhby, Tami, “House passes bill to roll back Trump Obamacare guidance,” WFMZ, May 9, 2019, available at https://www.wfmz.com/ news/politics/house-passes-bill-to-roll-back-trump-obamacare-guidance/1076757168. [FN21] . Cates-Carney, Corin, “Governor Signs Montana Medicaid Expansion Renewal Bill,” Montana Public Radio, May 9, 2019, available at https://www.mtpr.org/post/governor-signs-montana-medicaid-expansion-renewal-bill. [FN22] . Dorn, Stan, “Maryland's Easy Enrollment Health Insurance Program: An Innovative Approach to Covering the Eligible Uninsured,” Health Affairs, May 13, 2019, available at https://www.healthaffairs.org/do/10.1377/hblog20190510.993788/full/. [FN23] . Singer, Stephen, “Lamont, legislative leaders announce ‘public option’ health care bill as insurance industry withholds support,” Hartford Courant, May 23, 2019, available at https://www.courant.com/business/hc-biz-connecticut-public-option-20190523- vxbzyntsibdqxdso63mutgmdkm-story.html. [FN24] . Keith, Tamara, “Trump Administration Pushes To Make Health Care Pricing More Transparent,” Shots Health New from NPR, June 24, 2019, available at https://www.npr.org/sections/health-shots/2019/06/24/735432387/trump-administration-pushes-to-make-health- care-pricing-more-transparent. [FN25] . Williams, Michelle, “Cost of health insurance premiums on the rise in Massachusetts,” MassLive, June 27, 2018, available at https:// www.masslive.com/politics/2019/06/cost-of-health-insurance-premiums-on-the-rise-in-massachusetts.html. [FN26] . Press release, “Actuaries: Health Care Costs, Public Policy-Driven Changes Among Factors Shaping 2020 Health Insurance Premiums,” BioSpace, June 27, 2019, available at https://www.biospace.com/article/releases/actuaries-health-care-costs-public-policy- driven-changes-among-factors-shaping-2020-health-insurance-premiums/. [FN27] . McGill, Kevin, and Rebecca Santana, “Validity of Obama health care law at issue in appeal hearing,” AP, July 9, 2019, available at https://www.apnews.com/a3b83b51e2f74699b8fd6c480d953daa. [FN28] . Allyn, Bobby, “California Is 1st State To Offer Health Benefits To Adult Undocumented Immigrants,” NPR, July 10, 2019, available at https://www.npr.org/2019/07/10/740147546/california-first-state-to-offer-health-benefits-to-adult-undocumented-immigrants. [FN29] . 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