The Affordable Care Act at 10: States Lead the Way
March 2020 marks the 10-year anniversary of the passage of the Affordable Care Act (ACA). The National Academy for State Health Policy (NASHP) has developed resources that highlight some of the key state activities related to ACA implementation.
This features the ACA’s major milestones, including states’ implementation of its coverage expansions, insurance market changes that impacted states’ decision making, and the broad policy changes and legal decisions that affected ACA implementation.
This summarizes the ACA’s provisions that relate to state action or oversight, and the efforts states made to put in place policies, programs, and initiatives to meet the ACA’s legal requirements – and in some cases develop policies to further codify certain aspects of the ACA.
The Affordable Care Act (ACA) at 10: Summary of State Provisions and Implementation Status
|Provision||State Activity as of March 2020|
|Enforcement to Expand Coverage|
|Individual mandate||Initially required all US citizens and legal residents to have health coverage and assessed a tax penalty on those lacking coverage.||In December 2019, Congress reduced the penalty to zero.
Five states (CA, MA, NJ, RI, VT) have enacted a state-based mandate.
One state has enacted a policy to automatically enroll uninsured, eligible individuals in Medicaid; others are provided information about coverage through the health insurance exchange. (MD)
|Employer mandate||Required all employers with more than 200 employees to automatically enroll employees in health insurance plans (opt out is available for employees). All employers with more than 50 employees are assessed a fee if they have at least one employee who receives a premium tax credit.||In 2009, 96.2% of all businesses with more than 50 employees offered health insurance to their employees. The number peaked in 2016, with 97% of employers offering health insurance. In 2018, 96.8%. of employers with more than 50 employees offered insurance to employees.
Massachusetts imposed a penalty on employers with more than five employees who have workers enrolled in Medicaid or Massachusetts’ subsidized individual insurance program (ConnectorCare).
|Private Market Reforms and Assistance|
|Advance, refundable, income-based premium tax credits (APTCs)||Refundable credits, which can be paid in advance, are given to individuals and families with incomes of 100-400% of the federal poverty level (FPL) to be used for the purchase of a qualified health plan (QHP) through a state or federal health insurance exchange.
Calculating tax credits: Credits are calculated on a sliding scale based on a benchmark of the second-lowest cost silver plan available to the individual (actuarial value of 70%).
Calculations also factor an “applicable percentage” of income that individuals are required to contribute toward insurance. The applicable percentage is based on income and ranges from 2% for those earning up to 133% of FPL to 9.5% for those earning up to 400% of FPL. The percentage is adjusted yearly based on premium growth.
|As of 2019, 9.7 million consumers received APTC through health insurance exchanges.
Three states (CA, MA, VT) provide subsidies in addition to what is available through the federal marketplaces.
|Cost sharing reduction (CSR)||Reimbursement is given to issuers to cover the cost of services received with no cost sharing by qualified individuals (exchange enrollees with incomes between 100-250% of FPL who enroll in a silver-level QHP). CSRs increase the actuarial value of silver plans so that they are equal to a gold or platinum plan.||As of 2019, 5.8 million consumers were receiving CSRs through the health insurance exchanges.
In October 2017, the Administration stopped issuing reimbursements to insurers to cover costs associated with the CSR program, resulting in financial losses and some exits for QHP issuers.
Forty-five states have instructed insurers to adjust premiums of QHPs to account for CSR losses. In 41 states, insurers isolate adjustments to just silver-level health plans, a policy known as silver-loading. The increase in silver plan premiums increased the benchmark against which APTCs are calculated, enabling consumers to draw down larger tax credits. (States that silver-load include AK AR, CA, CO, CT, DE, FL, HI, ID, IA KS, KY LA, ME, MD, MA, MI, MN, MO, NE, NV, NH, NJ, NM, NY, NC, NC, OH, OR, PA, RI, SC, SD, TN, UT, VT, VA, WA, WI, and WY. States that broad load: IN, MS, OK, WV).
|Excess advance payments||Requires households that receive excess APTC to return excess funds. Limits the amount of excess payments to be returned for households earning below 400% of FPL.||States that run state-based exchanges (SBEs) work in tandem with the Department of Health and Human Services (HHS) to conduct oversight over the provision of APTCs to eligible enrollees, including direct outreach to enrollees to request updated eligibility information.|
|Small employer tax credit||Provides small employers (up to 25 employees, with an average wage of $50,000 or less) with a temporary tax credit for purchase of health insurance (up to 50% of employer contribution if employer contributes at least 50% of premium costs).||The small employer tax credit went into effect in 2010. The tax credit was increased once exchanges were implemented in 2014, however employers are only eligible to receive the credit for a period of up to two years.
Insurance coverage by small employers has declined since 2009. (It dropped 18.9% for employers with 10-24 employees and 27.4 % for employers with less than 10 employees).
|Temporary high-risk pool||$5 billion was allocated for a high-risk pool available to individuals with pre-existing conditions.||The Pre-Existing Condition Insurance Plan was established in June 2010 and was operational through 2013.
|Issuer Requirements, Insurance Standards, and Consumer Protections|
|Issuer taxes and penalties||Health insurance tax. Imposes an annual fee on health insurance of a base rate, which increases to reflect growth of premium rates. The fee is reduced for non-profit issuers.||Health insurance tax: Implementation of the tax was delayed until plan year 2020. The tax is repealed effective for plan year 2021.
One state (MD) leveraged the money that would have been spent on the health insurance tax to finance its reinsurance program.
|Cadillac tax. Imposes an excise tax on insurers of employer-sponsored health plans with aggregate values that exceed $10,200 for individual coverage and $27,500 for family coverage (indexed based on the consumer price index for urban consumers).||Cadillac Tax: Implementation of the tax was repeatedly delayed, and then repealed effective as of plan year 2020.|
|Qualified health plan (QHP)||Defines a QHP as a health insurance plan that meets certain parameters set forth by the ACA, including limits on cost sharing, provision of essential health benefits, and provision of minimum essential coverage (MEC).
Allowed for “grandfathering” of small group and individual market plans in existence before 3/23/2010, meaning that these health plans could continue to offer coverage after 1/1/2014, even if they were not in compliance with QHP requirements.
|Responding to concerns over loss of insurance plans, the Centers for Medicare & Medicaid Services (CMS) allowed plans in existence prior to 1/1/2013 to continue through 2014 (called grandmothered plans after ACA implementation). The policy has continually been extended. Currently, grandmothered policies may remain in existence through 2021 at the discretion of states.
Fourteen states (CA, CO, CT, DC, DE, MA, MD, MN, NV, NM, NY, OR, RI, VT, WA) and DC have prohibited the sale of grandmothered plans in their markets.
|Medical loss ratio (MLR)||Requires most insurance companies that cover individuals and small businesses to spend at least 80% of their premium income on health care claims and quality improvement. The remaining 20% may be allocated to administrative and marketing costs and plan profits. If an insurer does not comply with the MLR standard, it must issue rebates back to enrollees for the amount of premiums not spend on health care or quality improvement.||Insurers began issuing refund payments to enrollees in 2012. In 2019, insurers were required to pay nearly $1.4 billion in rebates, with individual consumers receiving an average of $128 for the year.
Eight states (CA, CT, DC, MD, ME, MN, NJ, RI, VT) and DC have issued state legislation or regulations that enforce, at minimum, the federal MLR standard.
|Limits to consumer spending||Institutes limits on out-of-pocket spending.
Eliminates annual limits on spending for services considered essential health benefits (EHB).
Eliminates lifetime limits on spending for services considered EHB.
Eliminates cost-sharing for preventive services defined by the US Preventive Services Task Force.
Requires plans to charge in-network rates for emergency services rendered at out-of-network facilities.
Limits deductibles for small group plans.
|Thirteen states (CA, CO, CT, DC, DE, HI, LA, MD, ME, MN, NC, VA, VT, WA)
and DC have issued legislation or regulation that limits cost-sharing.
Twenty-three states (CA, CO, CT, DC, DE, HI, IA, IN, LA, MA, MD, ME, MN, ND, NE, NH, NY, NC, OR, RI, UT, VT, VA, WA) and DC have issued state legislation or regulation that prohibits annual limits.
Twenty-three states (CA, CO, CT, DC, DE, HI, IA, IN, MA, MD, ME, MN, ND, NE, NH, NY, NC, OR, RI, UT, VT, VA, WA) and DC have issued state legislation or regulations that prohibit lifetime limits.
Eighteen states (CA, CO, CT, DC, DE, HI, IA, IN, MA, MD, ME, NC, ND, NE, NY, OR, UT, VA, VT) and DC have issued state legislation or regulation that prohibits cost-sharing for preventative services.
Twenty-one states (CA, CO, CT, DC, DE, HI, IA, IN, MA, ME, MD, MN, MO, ND, NE, NJ, NY, NC, OR, RI, VT, VA) and DC have issued state legislation or regulations requiring plans to charge in-network rates for emergency services delivered at out-of-network facilities.
|Extension of dependent coverage||Requires employer-sponsored insurance plans to offer employees’ dependents health coverage up to age 26.||Thirty-three states (CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KY, LA, ME, MD, MA, MN, MT, ND, NE, NV, NH, NJ, NY, NC, OR, RI, SD, TN, TX, UT, VT, VA, WA) and DC have issued state legislation or regulations to allow health insurance plans to cover dependents up to age 26.|
|Pre-existing condition protections||Guaranteed issue. Requires health plans to offer coverage to any eligible applicant regardless of health status, including those with pre-existing conditions.
Ban on rescissions. Prohibits issuers from revoking coverage other than in cases of fraud or intentional misrepresentation of facts.
Limits waiting periods to 90 days.
|Nineteen states (CA, CO, CT, DE, HI, ME, MD, MA, MI, MN, NV, NJ, NM, NY, NC, OR, UT, VT, VA, WA) and DC have issued state legislation or regulations that require guaranteed issue for health insurance plans.
Twenty-two states (CA, CO, CT, DC, DE, HI, IA, IN, LA, MA, MD, ME, MN, NC, ND, NE, NY, OR, RI, UT, VA, VT, WA) and DC have issued state legislation or regulations that prohibit rescissions.
Sixteen states (CA, CO, CT, DC, DE, HI, MA, MD, ME, MI, MN, NC, NV, OR, UT, VA, VT) and DC have limited waiting periods for health insurance.
|Non-discrimination standards||Prohibits discrimination on the basis of race, color, national origin, sex, age, or disability for health programs or activities funded by HHS and by issuers offering coverage in the health insurance marketplace.||In May 2016, HHS issued regulations to set parameters for implementation of the ACA’s non-discrimination policies. Ongoing litigation has blocked implementation of regulations that extend protections based on gender identity and termination of pregnancy.
Twelve states (CA, CO, DC, DE, HI, IL, ME, MN, NV, NY, OR, RI, VT, WA) and DC prohibit health insurance discrimination based on sexual orientation and gender identity. (Movement Advancement Project)
Five states (CT, MA, NJ, NM, PA) prohibit health insurance discrimination based on gender identity. (Movement Advancement Project)
Twenty-two states (CA, CO, CT, DC, DE, HI, IL, MA, MD, MI, ME, MN, MT, NH, NJ, NM, NV, NY, OR, PA, RI, VT, WA) prohibit insurance exclusions based on transgender status (Movement Advancement Project)
|Plan value and design||Essential Health Benefits (EHBs). Requires QHPs to offer a package of EHBs that cover a comprehensive set of services defined within 10 benefit categories, which include mental health and substance abuse services.
Actuarial values. Establishes four standard tiers of health insurance based on actuarial values –
60%, 70%, 80% and 90% of expected costs. The tiered system sets the minimum amount of coverage that individuals must purchase to receive tax credits and sets benchmarks for premium and cost sharing subsidies.
|Twenty-two states (CA, CO, CT, DE, DC, HI, IL, LA, ME, MA, MD, MN, NV, NH, NJ, NM, NY, NC, OR, UT, VT, VA, WA) and DC have issued state legislation or regulations to enforce federal EHBs requirements for plans sold in their individual insurance markets.
Thirteen states (CA, CO, CT, DE, DC, HI, ME, MD, MN, NY, NC, VT, VA, WA) and DC have issued state legislation or regulation to enforce federal actuarial value standards for plans sold in their individual insurance markets.
Several states (CA, DC, CT, MA, NY, OR, VT, WA) are exploring strategies to further experiment with insurance plan design to provide affordable, high-value coverage to consumers. These strategies include implementation of standard plan design or other strategies to guarantee provision of certain benefits without cost-sharing (MD).
|Rating bands||Issuers offering health plans through marketplaces may only rate (or price) their products based on age (3:1 ratio), tobacco use (1.5:1 ratio), geographic area, or family size. As described above, the law explicitly prohibits rating factors related to medical underwriting (e.g., a consumer’s health condition).
Prohibits issuers from charging different premiums to individuals based on gender.
|Five states (MA, NJ, NY, OR, VT) have issued state legislation or regulation to impose rating restrictions related to age.
Sixteen states (CA, CO, DC, IA, ME, MD, MA, MI, MN, MT, NH, NY, ND, OR, VT, WA) and DC have issued state legislation or regulation to prohibit rating based on gender.
Sixteen states (CA, CO, CT, HI, ME, MA, MI, MN, NV, NJ, NM, NY, OR, VT, VA, WA) have issued state legislation or regulation to prohibit community rating.
Six states (DC, DE, HI, NH, NJ, PA VT) and DC have created a single geographic rating area for the state.
|Rate review||Requires state/federal review of any premium increases in excess of 10% over the prior year. Requires states to report on premium trends and offer recommendations for plans that should be excluded from the marketplace. Provides grants to states to support the rate review program.||Forty-seven states (AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OR, PA, RI, SC, SD, TN, UT, VT, VA, WA, WV, WI) and DC operate their own rate review programs.|
|Network adequacy||Requires marketplace plans to offer a sufficient choice of providers — meaning an adequate number and mix of provider types (including mental health and substance abuse providers) to assure accessibility of services without unreasonable delay. Networks must include essential community providers that serve predominantly low-income, medically underserved individuals, such as federally qualified health centers.||As of plan year 2019, CMS defers to states to conduct their own review of whether health plans are meeting network adequacy requirements.
States have issued state legislation or regulation establishing network adequacy standards at least as comparable as under the ACA.
|Issuer transparency||Mandates issuers to develop provider directories and to post accurate information about provider availability and networks.
Established new standards for issuers to use for providing information on benefits and coverage to consumers.
|Twenty-nine states (CA, DE, IL, KY, ME, MI, NH, NJ, NV, NY, NM, RI, SC, TX, VA, VT, WA) have issued state legislation or regulations that govern provider directories.|
|Merged markets||Permits states to merge individual and small group markets.||Two states have merged individual and small group markets (MA, VT). DC operates a modified merged market where insurers can adjust index rates separately for the small and large group markets.|
|Single risk pool||Requires issuers to consider all plans sold in a state’s individual market as part of a single risk pool, whether the plans exist on or off an exchange.||Applies across all states.|
|Coverage appeals||Establishes an avenue for consumers to appeal coverage denials to the insurer and be guaranteed the right to an independent external review.||State insurance departments have and continue to serve as a resource through which consumers can file complaints regarding coverage denials. In addition, state-based health insurance exchanges provide an additional avenue through which consumers can access resources to help navigate coverage denials and appeals.|
|Prescription drugs are included as one of the 10 EHB categories that all private plans and plans covering the Medicaid expansion population must cover.||See above section on EHBs.|
|Acquiring Coverage and Subsidies|
|Health insurance exchanges||Establishes individual and small-group health insurance exchanges where individuals and businesses with up to 100 employees can purchase coverage. Exchanges may be run by a governmental or quasi-government agency, or a non-profit organization. Exchanges are required to perform certain functions related to consumer outreach and service as well as provide health plan oversight. States may opt to operate their own state-based exchanges (SBE), use the federal exchange (FFE), or operate a hybrid state-federal model, whereby the state conducts its own outreach and plan management functions, yet uses the federal technology platform (SBE-FP).
Exchanges work to promote greater transparency through a simplified approach to “shopping” for health insurance. They are empowered to provide tools that guide consumers through the process of obtaining health insurance, from plan search through enrollment including coordination of outreach and enrollment support via health insurance navigators and assisters.
Regional exchanges: States may form regional exchanges and/or for multiple exchanges may exist in a state (the latter only if the exchanges serve distinct geographic regions).
|Upon passage of the ACA, many states moved forward with exploration of an SBE; all states except Alaska received federal planning grants to implement an exchange. Ultimately, time, resource, and political constraints prohibited most states from moving forward with implementation of an SBE and the FFE launched in 34 states in 2013.
· Thirteen states operate SBEs. (CA, CO, CT, DC, ID, MD, MA, MN, NV, NY, RI, VT, WA)
· Six states run an SBE-FP. (AR, KY, OR, NJ. NM, PA)
· Of the states that use the FFE, seven maintain an active role in plan management meaning the state plays an active role in certification and oversight of QHPs sold through the FFE. (KS, ME, MT, NE, OH, SD, VA).
· Six states are actively exploring the transition to a full SBE (ME, NJ, NM, PA, OR, VA).
· No states have formed regional exchanges, nor do any states have multiple operational exchanges.
SBEs have worked diligently to continue to improve operations to provide better value and services to health insurance consumers and help ensure the availability of affordable coverage options. These efforts include continuous improvements to exchange websites and shopping tools, investments in targeted outreach and marketing, and engagement with health insurers to bring choice and value to insurance markets. Through these efforts, states that operate SBEs have maintained increasing or steady enrollment since they launched in 2013.
|Distribution of tax credits||Tax credits can be used to purchase QHPs only through established health insurance exchanges.||Three states (CA, MA, VT) provide subsidies in addition to federal APTC.|
|Eligibility determinations||No wrong-door eligibility. Requires states to develop a single form for consumers to use when applying for health insurance subsidies. Enables states to contract with Medicaid to determine eligibility for Medicaid coverage.||No wrong-door eligibility requires close collaboration between insurance exchanges and state Medicaid agencies on issues including development of applications and eligibility systems, marketing and outreach strategies, and financing. At least 10 states +DC (CT, DC, CO, ID, MA, MD, MN, NV RI, VT, WA)** have created exchange eligibility systems that are fully integrated with their Medicaid programs in order to provide as seamless an enrollment experience as possible. In 2019, the exchanges assessed or determined over 2.8 million individuals as eligible for Medicaid.***
***Data from CA, ID, and NY are not available and not included in this figure.
|Federal agency||Established the Center for Consumer Information and Insurance Oversight (CCIIO) within HHS — designed to serve as an “advocate for people with private coverage”||CCIIO operates the FFE, and provides oversight, technical assistance, and guidance to SBEs and health insurance agencies.|
|Establishing Coverage Options and Alternatives|
|Consumer-Operated and -Oriented Plan Program (CO-OPs)||Fosters the creation of qualified nonprofit health insurance issuers to increase competition in the individual and small group markets.
|In 2012, CMS awarded $2 billion to groups to operate CO-OPs in 24 states (AZ, CO, CT, IA, IL, KY, LA, MA, MD, ME, MI, MT, NE, NH, NJ, NM, NV, NY, OH, OR, SC, TN, UT, WI).
Most CO-OPs struggled, suffering severe financial losses caused by taking on higher than anticipated risk, and sale of underpriced health plans. These losses were further exacerbated in 2015 after Congress capped funding available through the federal Risk Corridor program.
Four CO-OPs remain operational in five states (ME, MT, ID, NM, WI).
|Basic health plan (BHP)||Option for states to create an insurance product available to citizens or lawfully present non-citizens with incomes between 133-200% of the FPL who do not qualify for Medicaid, Children’s Health Insurance Program (CHIP), or other minimum essential coverage (MEC). States receive 95% of the premium tax credits and cost-sharing reductions that would have otherwise been provided to (or on behalf of) eligible individuals if these individuals enrolled in QHPs through the marketplace.||Two states (MN and NY) have instituted a BHP. In 2019, nearly 883,000 individuals enrolled in a BHP.|
|Health savings accounts (HSAs), health reimbursement accounts (HRAs), and flexible spending accounts (FSAs)||Qualifies HRA as group coverage: Designates HRAs as group coverage, meaning that to offer an HRA the employer had to offer insurance coverage that is compliant with ACA requirements for group coverage.
Limits FSA and HRA flexibility: Excludes over-the-counter, non-prescribed drugs as reimbursable expenses.
Increased tax on HSA funds: Imposes an increased tax on distributions to HSAs not spent on qualified medical expenses.
Limits FSA contributions: Limits FSA contribution amounts to $2,500 per year, adjusted for cost of living.
|New federal policies have expanded the use of HRAs, providing new opportunities for individuals to use tax-free dollars to purchase coverage through the health insurance exchanges. The 21st Century CURES Act allows small businesses (with fewer than 50 employees) to put a certain amount of money into an HRA, which can then be used by an individual to purchase coverage. The individual must prove that they are enrolled in coverage that meets MEC standards. A June 2019 rule allows for integrated HRAs, which enable use of HRA dollars to purchase MEC. Employers may offer integrated HRAs regardless of employer size.|
|Multi-state plan (MSP) program||Directs the Office of Personnel Management (OPM) to contract with at least two private health insurers per state to offer marketplace coverage options that [intend to] provide statewide or cross-state coverage.||The MSP program was discontinued by OPM in 2019.|
|Strategies to Support Market Stabilization|
|Risk adjustment program||A program through which HHS redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees based on a risk calculation developed to evaluate the average financial risk of marketplace enrollees.||States have the option to operate their own risk adjustment program, though to date all have defaulted to federal operation of the program.|
|Reinsurance program||Established a temporary reinsurance program for individual and group market, effective 2014-2016.||Termination of the federal reinsurance program partially drove premium increases across states in 2017. Eleven states (CO, DE, ME, MD, MN, MO, NJ, ND, OR, RI, WI) have implemented state reinsurance programs through Section 1332 innovation waivers in an effort to bring down costs. However, requirements for states to finance a portion of the program prohibits implementation of a reinsurance program in many states.|
|Risk corridor program||Established a temporary risk corridor program by which HHS would collect funds from QHPs with lower than expected claims and distribute those funds to plan with higher than expected claims, effective 2014-2016.||In December 2014, Congress required the Risk Corridor program to be budget neutral, limiting the amount of money available to pay insurers with higher than expected claims. These cuts resulted in lower than anticipated payments to insurers to cover higher costs, affecting budgets and even solvency of many insurers including CO-OPs.|
|State Innovation Waiver (1332)||Waiver “Guardrails:” Waivers must satisfy four criteria in relation to the ACA.
1. Coverage must be “at least as comprehensive.”
2. Coverage must be “at least as affordable” (inclusive of all ACA cost-sharing protections).
3. Coverage must be provided to “a comparable number of residents.”
4. Provisions included in the waiver may not increase the federal deficit.
What may be waived? The ACA specifies which types of provisions may be waived. These include rules and legislation governing:
● Health insurance marketplaces;
● Qualified health plan certification; and
● The individual and employer mandates.
|To date, the majority of states have leveraged 1332 waiver programs to implement state reinsurance programs (see “reinsurance program” above).
Hawaii used a 1332 waiver to waive implementation of a SHOP. Existing state law includes requirements for employer mandates and coverage that are more stringent than what is required under the ACA.
In October 2018, HHS issued new guidance that loosened the parameters set by the 1332 guardrails, including by counting enrollment in coverage alternatives such as short-term plans so long as at least one plan that met the comprehensiveness standard would still be available in a state’s market. (More details available here.)
|Revised FPL limits for Medicaid||Expands Medicaid to all non-Medicare-eligible individuals under age 65 with incomes up to 138% of FPL based on modified adjusted gross income (Supreme Court 2012 ruling resulted in expansion being optional for states).||· Twenty-five states (AR, AZ, CA, CO, CT, DE, DC, HI, IL, IA, KY, MD, MA, MN, NV, NJ, NM, NY, ND, OH, OR, RI, VT, WA, WV) and DC expanded Medicaid on 1/1/2014.
· As of January 2020, 37 states (AK, AR, AZ, CA, CO, CT, DE, DC, HI, ID, IL, IN, IA, KY, LA, ME, MD, MA, MI, MN, MT, NE, NV, NH, NJ, NM, NY, ND, OH, OR, PA, RI, UT, VA, VT, WA, WV; not yet implemented in NE) and DC have expanded Medicaid.
· Ten states (AZ, AR, IN, IA, MI, MT, NH, NM, OH, UT) have approved Section 1115 waivers to structure their Medicaid expansion programs in ways not traditionally permitted by federal law. (Kentucky had an approved 1115 waiver for the expansion population that was vacated by a federal judge in March 2019, and then in December 2019. Kentucky Gov. Andy Beshear informed CMS that the state would not move forward with the waiver.)
|State match for Medicaid expansion||States expanding Medicaid for their newly eligible populations received 100% federal match for 2014-2016, gradually phasing down to 90% federal match in 2020.||Federal match for Medicaid expansion population:
· 2014-2016: 100%
· 2017: 95%
· 2018: 94%
· 2019: 93%
· 2020 and beyond: 90%
According to a survey of state Medicaid spending published in October 2019, most states use general revenue to cover the state share of expansion costs, and several states reported multiple financing sources. Eleven states reported using existing or new provider taxes; seven states indicated using savings from other state health programs, and two states indicated using cigarette/tobacco taxes.
|Eligibility and enrollment|
|Eligibility threshold for children||This raises Medicaid eligibility levels for all children to 138% of FPL. Required some states to transition children from separate CHIP to Medicaid coverage.
Maintenance of effort (MOE). Requires states to maintain the Medicaid and CHIP eligibility levels, standards, methodologies, and procedures for children that were in place in 2010 through FFY 2019.
|Twenty-one states (AL, AZ, CA, CO, DE, FL, GA, KS, MS, NV, NH, NY, NC, ND, OR, PA, TN, TX, UT, WV, WY) transitioned children ages 6-18 from CHIP to Medicaid; read an implementation analysis of states’ experiences transitioning these children from CHIP to Medicaid.
The MOE for children was extended through FFY 2027 with passage of the HEALTHY KIDS and ACCESS Acts in early 2018 to extend federal CHIP funding; beginning in FFY 2020 the MOE only applies to children in families with incomes under 300% of FPL, meaning that states providing CHIP coverage above this level have the option to reduce these coverage levels.
|Systems enhancements||States were required to implement a number of changes to their Medicaid programs related to eligibility and enrollment, operations, etc., regardless of whether they opted to implement the Medicaid expansion.||Examples of changes that states made to streamline enrollment and simplify eligibility rules:
· Single application for all insurance affordability programs (IAPs), with a “no wrong door” approach so that individuals are determined for eligibility for all IAPs;
· New eligibility determination timeliness standards and move toward “real time” eligibility determinations;
· New modified adjusted gross income (MAGI) income methodology for most non-elderly, non-disabled individuals applying for Medicaid; no asset tests or in-person interviews;
· New requirements related to verification of eligibility criteria; states required to access financial information data through electronic sources, including through the federal hub;
· Medicaid agency coordination with exchanges on eligibility and enrollment functions (e.g., secure transmissions of electronic accounts, whether to use the assessment or determination model for eligibility determinations);
· Requirements to provide consumer outreach and enrollment assistance and develop consumer-facing websites and make notices more consumer-friendly and accessible; and
· Eligibility renewals no more often than every 12 months, using available information from data sources first.
Current status of states’ enrollment and renewal processes as of January 2019:
· Individuals can apply for Medicaid online in all states for the first time;
· Forty-six states can complete real-time determinations and automated renewals;
· Thirty-four states have reported that there was improvement in at least one area of eligibility operations since prior to ACA implementation;
· Thirty-two states determine eligibility for all Medicaid groups through a single system, and in 24 states the MAGI-based eligibility system also conducts eligibility determinations for at least one non-health program; and
· Of the 39 states reporting using the federally facilitated marketplace (FFM) platform, 30 states use the FFM to assess Medicaid eligibility only, and then make a final determination after the case is transferred to the state.
|Enrollment simplification||Provides a new presumptive eligibility (PE) authority for hospitals and provides options to expand PE to new non-elderly Medicaid-eligible populations.||The need for PE has decreased as states have become more able to process eligibility determinations faster, but it remains a way in some states for individuals to access temporary coverage. As of January 2019, 30 states use PE for pregnant women and 20 states do so for children. Also, 15 states use PE for parents, adults, family planning services, and/or former foster youth.|
|Extension of Medicaid eligibility for former foster care youth||Allows youth who age out of foster care or who have previously aged out of foster care to enroll in Medicaid, regardless of income, until the age of 26. This was designed to be a companion provision to the extension of dependent coverage until age 26.||CMS subsequently released guidance that allows for states to opt to: cover former foster care youth who aged out of the foster care system in another state (via an 1115 waiver) and extend Medicaid coverage to any adult under age 26 who received Medicaid at any time during foster care – not just at the time they aged out. As of October 2018, eight states (CA, KY, MA, PA, SD, UT, VA, WI) have approved 1115 waivers to enroll former foster care youth from other states in Medicaid.|
|Medicaid Program Design|
|Benchmark benefits||Benefits for newly eligible individuals provided through a Medicaid Alternative Benefit Plan (ABP) that is based on a benchmark plan that includes the ACA’s essential health benefits.||A Congressional Research Service analysis of Medicaid state plan information on the CMS website in August 2018 found that of the 32 Medicaid expansion states (including DC) that had a state plan amendment related to the ABP benefit provided to their expansion population, all had elected benchmark rather than benchmark-equivalent coverage, and 31 (all except ND) elected to use secretary-approved coverage as the ABP benchmark.|
|Enhanced match for community-based attendant services and supports||Community First Choice: Created an option in Medicaid to allow states to provide community-based supports for individuals with disabilities who need institutional-level care. States were provided with an enhanced federal match rate.||Nine states (AL, AR, CA, FL, LA, NJ, OR, TX, and WI) have implemented Community First Choice to expand access to home- and community-based services for people with disabilities.|
|Home and community-based services||Provided states with additional options for providing home and community based services (HCBS) through Medicaid state plans instead of waivers for certain individuals.||Seventeen states (AR, CA, CT, DE, DC, ID, IN, IA, MD, MI, MN, MS, NV, NH, OH, OR, and TX) have (or have submitted) 1915(I) state plan amendments to expand access to home- and community-based services, primarily for people with mental health needs.|
|Balancing Incentive Program||This provided qualifying states with an enhanced federal match rate from 10/1/11 to 9/30/15 to increase access to non-institutional long-term support services options for individuals.||Twenty-one states participated in the program to expand access to people with disabilities in home- and community-based settings. Although the program expired, 13 states participated past the Sept. 30, 2015 deadline: (CT, GA, IL, ME, MD, MA, MS, NV, NH, NJ, NY, PA, and TX).|
|Medicaid health home||Established a Medicaid state plan option under Section 2703 to coordinate care through a health home model for individuals with two or more chronic conditions, or who have one chronic condition and are at risk for developing another, or who have one serious mental illness. States receive enhanced federal funding (a 90% match) for the first eight quarters of implementation.||As of November 2019, 20 states and DC have a total of 35 approved Medicaid health home models: California (2), Connecticut, Delaware, District of Columbia (2), Iowa (2), Maine (3), Maryland, Michigan (3), Minnesota, Missouri (2), New Jersey (2), New Mexico, New York (2), Oklahoma (2), Rhode Island (3), South Dakota, Tennessee, Vermont, Washington, West Virginia (2), and Wisconsin.
New York has specifically targeted children with complex health care needs with their Health Home model, which has led to a new state option, passed into law in 2019 to allow for states to establish health homes particularly for children with medical complexity.
Six states (CA, ME, MD, MI, RI, and VT) have implemented health homes specifically for individuals with substance use disorder (SUD) or using SUD as a qualifying criterion. The complex biopsychosocial nature of SUD makes health homes and other integrated care models helpful to address the multiple factors that foster SUD in a coordinated environment.
|Money follows the person (MFP)||Allocated an additional $2.25 billion to the program and expanded eligibility criteria.||More than 75,151 people with chronic conditions and disabilities transitioned from institutions back into the community through MFP programs as of December 2016. For the period 1/1/17 through 12/31/18, grantees self-reported having transitioned an additional 18,640 individuals for a total of 93,791. As of October 2019, the program operates in 44 states. States’ programs were set to phase out in FFY 2020, but Congress provided a short-term extension of $254.5 million to continue the program through December 2019, and another short-term extension was provided through 5/22/20.|
|Increased Medicaid payments for primary care||Increased Medicaid payment rates for primary care services provided by physicians in 2013 and 2014 to match Medicare fee levels.||An analysis conducted by the Medicaid and CHIP Payment and Access Commission (MACPAC) found that it was unclear whether the primary care payment increase affected access to primary care. After the increase ended on 12/31/14, MACPAC found that at least 24 states returned to their previous primary care physician payment rates, and that 14 states would continue to pay primary care physicians at higher levels in 2015 than during their pre-2013 levels, but not necessarily at Medicare rates.|
|Drug rebates||Increased drug rebate percentage for brand-name, and non-innovator, multiple source drugs.
Extended drug rebates to Medicaid managed care organizations (MCOs).
|Rebate amounts increased from 18.1% to 23.1% for brand-name drugs, and from 11% to 13% for generics, but the state share is calculated from the pre-ACA rebate amount.
Allowing for rebates for drugs purchased through managed care has increased the number of states carving in prescription drug coverage back into managed care; of the 40 states in 2018 that contracted with comprehensive risk-based MCOs, 35 indicated carving in all or most of their drug coverage.
|Dual eligibles||Created a new office in CMS – the Federal Coordination Health Care Office to Medicare and Medicaid – to promote benefit integration and coordination across programs.||Eleven states (CA, IL, MA, MI, MN, NY, OH, RI, SC, TX and WA) are currently participating in the financial alignment initiative to provide individuals dually enrolled for Medicare and Medicaid with a better care experience and to better align the financial incentives of the Medicare and Medicaid programs. Colorado’s and Virginia’s programs ended in December 2017.|
|Financing home visiting||Enacted the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) Program that created an initial funding stream to states for home visiting, established future federal funding streams and put an emphasis on the importance and impact of evidence-based home visiting programs for women, children and families.||Since passage of the ACA, MIECHV has been reauthorized several times with over $1.85 billion invested in state-based home visiting programs.|
|Children’s Health Insurance Program (CHIP)|
|Option to extend CHIP coverage||Provided states an option to offer CHIP coverage to children of state employees who were eligible for health benefits (if certain conditions were met).||This option has been implemented by 18 states (AL, AR, CO, CT, FL, GA, KS, KY, ME, MS, MT, NV, NC, PA, TN, TX, VA, WV) in their separate CHIP programs as of January 2019.|
|Enhanced funding to states||Introduced a 23 percentage-point increase in the federal CHIP match rate (not to exceed 100%) beginning in FFY 2016 through FFY 2019.||With the 23 percentage-point increase, states’ federal CHIP match rates ranged from 88 to 100% beginning in FFY 2016. The HEALTHY KIDS and ACCESS Acts that were passed in early 2018 to extend federal CHIP funding maintained the 23 percentage point increase through FFY 2019. In FFY 2020, the law maintains an increase in the federal CHIP match rate, but it is phased down to 11.5 percentage points. Then beginning in FFY 2021 and beyond, it returns to states’ regular enhanced CHIP match rate.|
|Maintenance of Effort (MOE)||Requires states to maintain Medicaid and CHIP eligibility levels, standards, methodologies, and procedures for children that were in place in 2010 through FFY 2019.||The MOE for children was extended through FFY 2027 with passage of the HEALTHY KIDS and ACCESS Acts in early 2018; beginning in FFY 2020 the MOE only applies to children in families with incomes under 300% of FPL, meaning that states providing CHIP coverage above this level have the option to reduce these coverage levels.|
|Delivery System Reforms|
|Center for Medicare and Medicaid Innovation (CMMI) within CMS||CMMI demonstration programs reward providers and systems for value over volume. CMMI funds a number of initiatives (such as the State Innovation Model – SIM)) that address payment and delivery system reform and population health and prevention. CMMI also has a prevention and population health group that provides national leadership.||CMMI has supported states in developing new payment reforms and new delivery models that are part of a broader move to value-based care, which aims to raise quality while lowering costs. Seventeen states participated in SIM Rounds 1 and 2. More than half of the 11 states receiving SIM 2 funds set up population health programs, typically involving clinical and community health integration. For example SIM enabled Washington State to develop accountable communities of health to improve community health and transformed health systems. CMMI’s Accountable Health Communities initiative (ongoing) draws attention to an issue states are increasingly focused on – whether systematically identifying and addressing the health-related social needs of Medicare and Medicaid beneficiaries’ through screening, referral, and community navigation services will impact health care costs and reduce health care utilization.|
|Accountable care organizations (ACOs)||The ACA defines ACOs and establishes a Medicare Shared Savings ACO program.||By rewarding value over volume and holding providers financially accountable for their patients’ health, an ACO sets the stage for states to begin addressing health-related needs through accountable health entities.|
|Medicare-Medicaid Coordination Office||Created to address issues for individuals dually enrolled in Medicare and Medicaid.||See above under dual eligibles.|
|Community Health Center Fund (CHCF)||Allocates $11 billion to community health centers over a five-year period and provides support for school-based health centers and nurse-managed health clinics.||About $11 billion was appropriated from FFY 2011-FFY 2015 to the CHCF established through the ACA. The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 extended appropriations for the CHCF by providing a total of $7.2 billion for health centers for FFY 2016-FFY 2017. The Bipartisan Budget Act of 2018 also extended the CHCF for another two years, providing a total of $7.8 billion for FFY 2018-FFY 2019. Current funding for community health centers goes through 5/22/20.|
|Hospital Provider Payments|
|Hospital readmissions reduction program||Penalizes hospitals for excess readmissions within 30 days of discharge. (Medicare)||This program marked a large-scale shift toward holding providers accountable for the non-clinical factors affecting health. Hospitals now have a financial stake in connecting patients to social services, and following up with them, and many states have embraced the idea that care does not stop at the hospital door.
· For example, California passed a law (SB 1152) in 2018 that requires hospitals to develop a plan for coordinating services and referrals for patients experiencing homelessness to help ensure an appropriate discharge.
|Medicaid coverage for tobacco cessation for pregnant women||Medicaid must cover counseling and medication for tobacco cessation without cost sharing.
|This provision has resulted in increases in state Medicaid coverage of tobacco cessation counseling and medications for pregnant women.|
|Cost-containment and Other Payment Reforms|
|Prescription drugs||Authorized Food and Drug Administration (FDA) approval of generics for biologic drugs.
Granted biologic manufacturers 12 years of exclusive use before generics could be developed.
|The prescription drug provisions within the ACA are referred to as the Biologics Price Competition and Innovation Act (BPCIA). BPCIA provides the framework under which biosimilars and interchangeable biologics can be approved by the FDA.|
|Waste, fraud, abuse||Required disclosure of financial relationships between health entities and manufacturers and distributors of drugs, devices, and medical supplies.
Created a national database to share data across federal and state programs related to compliance.
Funds anti-fraud activities.
Enhanced oversight of new provides and suppliers in public programs.
Grants to states to address medical malpractice.
Required skilled nursing facilities in Medicare, and nursing facilities under Medicaid to disclose information regarding ownership, accountability, and expenditures.
|Several state agencies including offices of Attorneys General and departments of insurance perform oversight to mitigate waste, fraud, and abuse in the state.|
|Patient-Centered Outcomes Research Institute (PCORI)||PCORI funds comparative effectiveness research (CER) to help policymakers and others make informed decisions based on evidence-based information. However, CER may not be, “construed as mandates, guidelines, or recommendations for payment, coverage, or treatment or used to deny coverage.”||Since 2012, PCORI has funded hundreds of health care comparative effectiveness research studies to learn which work best for patients, patients are included in the research process.|
|National Quality Strategy (NQS)||NQS works with stakeholders to align clinical quality measures around shared aims and priorities. It identifies and prioritizes areas of focus for quality improvement nationwide. It developed measure sets for nine topics aligned with six quality priorities. Measure alignment is done with an eye toward minimizing provider burden.||The National Quality Strategy, developed through a collaborative process with input from multiple stakeholders, established a set of three overarching aims that builds on the Institute for Healthcare Improvement’s Triple Aim, supported by six priorities that address the most common health concerns that Americans face.|
|Prevention and Public Health Fund||The Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Cooperative Agreement, which awards funds to all 50 state health departments, receives nearly half its funding from the fund (see ASTHO, Prevention and Public Health Fund). ELC awards to states and localities totaled $245 million in 2016. According to the Centers for Disease Control and Prevention (CDC), “Funds provided through the ELC mechanism help pay for more than 1,000 full- and part-time positions in the state, territorial, local, and tribal health departments. These positions include epidemiologists, laboratorians, and health information systems staff,” in 2013. Trust for America’s Health estimates that states would lose more than $3 billion over five years if the fund were repealed.
The fund supports the Preventive Health and Health Services (PHHS) Block Grant to states, which supports rapid responses to emerging health issues. The CDC allocated $160 million in PHHS Block Grant funding 2015, aligned with Healthy People 2020 goals. The ELC also gave states and cities $60 million in July 2016 to fight Zika.
Established the National Prevention, Health Promotion, and Public Health Council, including various task forces to develop evidence-based recommendation on use of prevention services.
|The Prevention and Public Health Fund (Sec. 4002) established by the ACA has been an important source of funding to states, but has not been funded as the act initially required.|
|Office of Minority Health||The ACA reauthorized the Office of Minority Health and moved it to the Office of the HHS secretary. It also created individual offices of minority health within: CDC, Health Resources and Services Administration, Substance Abuse and Mental Health Services Administration, Agency for Healthcare Research and Quality, FDA, and CMS.||The ACA elevated the issue of health disparities. Although not required by the ACA, the number of state offices of minority health has increased. As of January 2000, 33 states have established offices of minority health. As of 2016, each of the 50 states had a minority health or health equity office or entity, showing growth in state commitment to committing to the mission of reducing health disparities and increasing health equity.|
|Tax-exempt hospital community needs assessment/benefits||The ACA requires nonprofit hospitals seeking to retain their tax-exempt status to conduct community health needs assessments (CHNA) and develop a plan to address those needs. Final rules specify that the community needs addressed by hospitals may include the need to, “ensure adequate nutrition, or to address social, behavioral, and environmental factors that influence health in the community.” The rule requires each hospital to obtain and consider input from a governmental public health department.||In the years since the ACA’s passage, many states have built on the federal law by implementing reporting systems that go beyond the federal requirements, encouraging or requiring community involvement in the CHNA process, and by aligning hospital community benefit investments with state health priorities. States are also building CHNA requirements into hospital certificate of need conditions that address the health-related needs of the community.|
NASHP will be producing additional products that closely examine states’ roles in implementing Medicaid changes and the broader implications of ACA’s Medicaid expansion, along with states’ efforts to provide affordable, high-quality coverage through their health insurance marketplaces.