This year, many states have continued to pursue federal approval for a range of proposals affecting Medicaid coverage, such as seeking modifications to the Affordable Care Act’s (ACA) Medicaid expansion or adding Medicaid work requirements.
Currently, nine states have implemented expansion through Section 1115 waivers to impose conditions such as monthly premiums, lock-out provisions for non-payment, and work requirements on certain Medicaid enrollees. While some Medicaid waivers approved by the federal government that include work requirements have faced legal challenges, other states — including those that have not implemented Medicaid expansion — are continuing to seek federal approval to condition Medicaid eligibility on work, with nine additional proposals currently pending.
The following is an overview of some of the current state Medicaid coverage waiver activity and other state actions affecting health coverage, including Tennessee’s recent block grant proposal.
State Changes to Medicaid Expansion Passed by Ballot Initiatives
Earlier this year, Idaho’s governor signed into law a number of changes to the Medicaid expansion ballot measure approved by voters in November 2018. One component of the law required the state to seek a 1332 waiver to enroll individuals eligible for expanded Medicaid who had income between 100 to 138 percent of the federal poverty level (FPL) in subsidized exchange coverage, although these individuals could opt for Medicaid coverage instead. However, in late August the Centers for Medicare & Medicaid Services (CMS) rejected the state’s waiver request, citing that it did not meet the deficit neutrality guardrails required of 1332 waivers. State officials have indicated that they will resubmit the application with additional information, although CMS noted in its letter that even a revised application would likely still not demonstrate compliance with those guardrails. Another aspect of Idaho’s law modifying the voter-approved Medicaid expansion directs the state to seek a waiver to implement Medicaid work requirements for most expansion enrollees, and the state recently submitted this 1115 waiver request for federal approval. If the waivers are not approved by Jan. 1, 2020, the state law requires implementation of traditional Medicaid expansion.
Similar to Idaho, voters in Utah passed a measure last November to implement Medicaid expansion, and in February state legislators enacted a law that significantly alters the voter-approved expansion in a number of ways. The law requires the state to seek a series of waivers, outlined in the state’s implementation toolkit, through a potentially four-step process, depending on what CMS approves. In March, CMS approved the state’s first request — the Bridge Plan — to expand Medicaid to only those earning 100 percent of FPL at the state’s regular federal medical assistance percentage (FMAP) rate, include an enrollment cap if projected costs exceed state appropriations, require individuals with access to employer-sponsored insurance (ESI) to enroll in that coverage with Medicaid premium assistance, and add work requirements in 2020. In May, the state submitted the second waiver proposal for the enhanced FMAP that the ACA provides for the expansion population while keeping the expansion eligibility level at 100 percent FPL, but CMS indicated that it would not provide the enhanced FMAP for a partial expansion. This second proposal also maintains the enrollment cap, work requirements, and ESI premium assistance from the initial waiver, adds in 12-month continuous eligibility and lock-out provisions for non-compliance with certain activities, and notably requests to implement a per capita cap model for receiving federal Medicaid funds for the new eligibility group. Although CMS did not approve the enhanced FMAP for the partial Medicaid expansion, the governor issued a statement that the state would move forward with requesting approval of the other proposal components, and the state submitted the waiver request in late July. If CMS does not approve this per capita cap proposal, the state plans to request permission to implement a “fallback” plan — the third step in the state’s implementation plan — that expands Medicaid to the ACA’s 138 percent of FPL eligibility threshold and provides the state with the enhanced expansion FMAP, and includes work requirements, an enrollment cap, and lock-out provisions. The final option – if this third plan is not approved – is implementing traditional Medicaid expansion through a state plan amendment, as was passed by the voters.
Nebraska was the third state in 2018 to pass Medicaid expansion through a ballot initiative, and while state legislators there did not follow the same route as Idaho and Utah, expansion in Nebraska has not yet occurred because the state intends to seek modifications to the expansion. State officials submitted a state plan amendment for expansion this past April, indicating the state would seek a waiver to modify its existing managed care program to include the expansion population and provide different benefit packages based on whether enrollees complete certain wellness requirements. Expansion will occur no later than Oct. 1, 2020, and the plan eventually will also incorporate work requirements for eligible individuals wishing to remain in the “prime” coverage option, which offers more robust benefits such as dental and vision services.
Activity in Medicaid Expansion States
Montana originally implemented Medicaid expansion through a waiver because the state requires certain individuals to pay premiums. The expansion was scheduled to sunset in July of this year, but in April the legislature passed a bill, signed by the governor in May, to continue expansion that added work requirements for most enrollees. The state’s waiver amendment also seeks to maintain the original waiver’s implementation of 12-month continuous eligibility and modify the monthly premium structure to be based on the amount of time an individual is enrolled. The federal comment period for the waiver amendment recently closed.
In Virginia, Democratic Gov. Ralph Northam and Republican state legislators negotiated a compromise to expand Medicaid with work requirements in 2018. Coverage became effective in January of this year, but the work requirements were not implemented as the state needed to seek federal permission through a waiver. The state is now negotiating to receive federal funding for employment supports, as Northam’s administration has indicated that the state cannot afford to implement the work requirements without these federal dollars. Some Republican state legislators are characterizing the request for this federal funding as an effort to backtrack on the compromise struck last year between them and the governor.
While New Mexico originally implemented the ACA’s traditional Medicaid expansion, the state sought and received approval in December 2018 to add premium and copayment requirements and waive retroactive eligibility for certain expansion enrollees. However, under Gov. Lujan Grisham, the state is now requesting to amend the waiver and remove the copayments, premiums, and waiver of retroactive eligibility.
Activity in Non-Medicaid Expansion States
Like last year, voters in some nonexpansion states will have the chance to consider expansion in 2020. Groups in Oklahoma indicated that they have gathered enough signatures to put expansion before voters in 2020. Medicaid expansion proponents in other states — specifically Missouri and South Dakota — are also attempting to place the issue before voters in 2020. Additionally, in Mississippi’s upcoming gubernatorial election in November, voters will decide between a Republican who opposes expansion and a Democratic who supports it.
North Carolina’s Democratic Gov. Roy Cooper vetoed the state budget in June in part because it did not include Medicaid expansion. However, in mid-September state legislators in the House voted to override the governor’s veto. While the Senate still needs to hold a vote on the veto override, a bill to expand Medicaid with work requirements and premiums has been added back to the legislative calendar.
Georgia is currently drafting two waiver proposals as part of a law signed by the governor in March. The state is expected to submit an 1115 waiver proposal to expand Medicaid to only those earning 100 percent of FPL, as well as seek federal approval through a 1332 waiver to implement a reinsurance program.
Beyond continuing efforts to expand Medicaid or modify laws to do so, block grants have surfaced again. Tennessee has developed a draft proposal to shift federal funding for most of the state’s Medicaid program into a version of a block grant, which would be a significant change and is based on a state law passed earlier this year. Under the plan, the state would receive a capped amount of federal Medicaid funding for low-income parents, children, and individuals with disabilities. Unlike a traditional block grant — which the state acknowledges its plan differs from — the state is requesting additional funding if enrollment rises above a certain threshold, but the funding amount would not be reduced if enrollment declined. Additionally, the funding cap does not include state spending on individuals dually eligible for Medicaid and Medicare, disproportionate share hospital (DSH) payments, outpatient prescription drug expenses, or administrative costs, and any savings achieved from the financing model would be divided evenly between the state and the federal government (the state’s current federal match rate is 65 percent). The state is also requesting additional flexibilities, such as modifying the amount, duration, and scope of benefits without federal approval or public comment and implementing a closed formulary for prescription drugs. The waiver request also proposes to exempt the state from federal regulations for managed care plans. Some policy analysts have identified that federal law does not allow Medicaid’s financing model to be restructured through the 1115 waiver authority, and if CMS does approve the waiver it is expected to face legal challenges. Tennessee also submitted a separate waiver request in December 2018 seeking to implement Medicaid work requirements for low-income parents and caretakers, which is still awaiting federal approval.
Legal Challenges to Medicaid Work Requirements
Medicaid waivers containing work requirements approved by CMS have been halted by court rulings earlier this year in Arkansas, Kentucky, and New Hampshire, and a legal challenge was recently filed against Indiana’s approved work requirements. Earlier this month, a three-judge panel heard oral arguments on the federal government’s appeal of the Arkansas and Kentucky rulings, and the judges noted that the administration had not considered the coverage losses resulting from work requirements. The ruling by this federal appeals court will have significant implications for Medicaid work requirements overall, and while they did not provide specific information about timing for the decision, it is expected before the end of the year. The court challenges are already beginning to have some implications — on Oct. 17, 2019, Arizona informed CMS that it would postpone implementation of the state’s approved Medicaid work requirements due to the litigation in other states. Additionally, a recent study conducted by the Government Accountability Office (GAO) recommended that CMS should improve its oversight of the administrative costs associated with work requirement waivers, which GAO found can be significant, ranging from under $10 million to over $250 million.
In addition to the next round of court decisions on Medicaid work requirements, states are waiting to see if federal guidance on Medicaid block granting will be issued soon — which is currently under review at the Office of Management and Budget. Similar to how states are seeking to implement Medicaid work requirements despite legal challenges, if CMS provides guidance and approves Tennessee’s block grant proposal, other states may also pursue this financing model, even if the block grant is challenged in court. Also, whether CMS and states that have been hesitant to expand will be able to find a middle ground on Medicaid expansion remains a question, and how decisions play out in Idaho and Utah in particular, will be significant for future actions. Similar to this past year, in 2020 states are expected to continue to seek new ways to test the boundaries of Medicaid coverage waivers and manage their Medicaid programs.
Care coordination is an essential component of care for children and youth with special health care needs (CYSHCN). When successfully implemented, it can improve care, reduce costs, avoid fragmented and duplicative care, and improve family functioning and satisfaction. As states work to provide quality care coordination, many are adopting shared plans of care (SPoC) to enhance patient- and family-centered care delivery, and support improved outcomes and care quality. This issue brief, developed by the National Academy for State Health Policy with support from the Health Resources and Services Administration’s Maternal and Child Health Bureau, identifies approaches and strategies states can use to promote the use of SPoCs as part of care coordination. It also features case studies showcasing how Iowa, Oregon, Utah, and West Virginia are implementing SPoCs for CYSHCN.
Read or download: State Strategies for Shared Plans of Care to Improve Care Coordination for Children and Youth with Special Health Care Needs
Blog: Why Shared Plans of Care Are Critical to Coordinated Care and How States Are Implementing Them
Children and youth with special health care needs (CYSHCN) can require significant care coordination across a continuum of health and social services. Improved care coordination for CYSHCN can lead to better outcomes for CYSHCN, as well as cost savings for states. To achieve those goals, state Medicaid agencies and Title V CYSHCN programs are increasingly using individual, comprehensive plans of care, called shared plans of care (SPoCs), to strengthen care coordination for CYSHCN.
States play a significant role in coordinating care for CYSHCN and in implementing SPoCs. Nationally, state Medicaid agencies and Children’s Health Insurance Program (CHIP) provide health insurance to 48 percent of all CYSHCN, and their Title V programs are an essential resource for care coordination for CYSHCN and can play a central role in supporting and implementing SPoCs.
Health care delivery transformation and other federal and state reforms present key opportunities for states to promote the use of SPoCs. For example, states are now integrating SPoCs into patient-centered medical home (PCMH) initiatives, health home models, Medicaid managed care arrangements, and state accountable care organizations. To implement SPoCs, states are:
- Creating a standardized SPoC document for use or adaptation by Title V CYSHCN program staff, health care providers, health plans, and others that serve CYSHCN;
- Contractually requiring Medicaid managed care organizations to use SPoCs as part of their care coordination services; and
- Working within programs or with outside entities to modify existing care planning processes to accommodate SPoCs and ensure they meet shared care planning standards.
In a new issue brief, State Strategies for Using Shared Plans of Care to Improve Care Coordination for Children and Youth with Special Health Care Needs, the National Academy for State Health Policy (NASHP) outlines state strategies to effectively launch and implement SPoC. The report also features four state case studies that explore how Iowa, Oregon, Utah, and West Virginia are implementing and advancing their SPoC initiatives. Highlights include:
- Iowa’s Title V CYSHCN program developed an electronic SPoC using ACT.md, a web-based platform that serves as the central hub for SPoCs. Iowa uses the SPoCs to support care coordination for a subset CYSHCN who receive services through the state’s Pediatric Integrated Health Home Program or Child Health Specialty Clinics (the state’s community-based public health agencies).
- Oregon is implementing SPoCs for a select group of CYSHCN through its local public health agencies (LPHAs), which it contracts with to provide care coordination services. SPoCs are developed during meetings with all of the child’s providers, which helps ensure that everyone involved in the child’s care receives the same information. To enable LPHAs to better provide cross-sector care coordination and support integration of care in the community, Oregon maintains a resource-rich SPoC website that includes its SPoC Implementation Guide.
- Utah’s SPoC initiative targets CYSHCN living in rural areas who receive direct clinical services from the state’s Title V CYSHCN program, with the Title V care coordinators leading the development and oversight of SPoCs. SPoCs are housed in the state’s electronic medical record system (Cadurx). Families can access their children’s SPoCs through a patient portal and they also receive a printed copy. Training, tools, and information on care coordination and SPoCs are available to providers and care coordinators through the Utah Children’s Care Coordination Network.
- West Virginia’s Title V program developed its SPoC initiative when it redesigned its care coordination program for CYSHCN. The care coordinators within the state’s Title V CYSHCN program lead the development of SPoCs and collaborate with the Medicaid managed care organizations’ (MCOs) medical case managers, foster care services agencies, and primary care physicians to provide care coordination. The strong partnership between the state Medicaid agency and state Title V program helped the Title V program established memos of understanding (MOUs) with the four state Medicaid MCOs. Through the MOU, MCOs and the Title V program are required to coordinate the care planning process for CYSHCN, including the use of SPoCs.
Click here for a chart comparing the health topics each governor addressed.
In their state of the state speeches, governors highlight policy successes and outline key proposals they want their legislatures to address. This year, governors highlighted health care issues such as Medicaid, behavioral health, and the opioid epidemic as policy priorities in these speeches.
Currently, there are 33 Republicans, 16 Democrats, and one Independent among the nation’s governors. Kansas, New Jersey, and Virginia swore in new governors in 2018, and 36 governors will be elected this fall. As of late February, 43 governors included health care policy priorities in their state of the state speeches, budget proposals, or inaugural addresses. This is the highest number of governors commenting on health care in their speeches since NASHP began tracking them in 2015. The descriptions and chart below summarize the governors’ health-related themes.
Click a health topic below to read how individual governors are tackling the issue.
Mental health and substance use disorders were the most commonly cited health issues, with 37 governors addressing these issues. Governors frequently highlighted strategies they had implemented or planned to implement to increase access to behavioral health services.
|Georgia||Created Commission on Children’s Mental Health to recommend ways to improve state mental health services for children. Budget proposal includes $22.9 million in funding based on the commission’s recommendations.|
|Hawaii||Dedicated more money to mental health treatment and services, including to the homeless population.|
|Idaho||Identified the need for cost-effective ways to address acute substance abuse and mental health issues. Noted appreciation of legislature’s support to create behavioral health crisis centers in four areas, which help reduce use of more costly emergency rooms and jails. Requested $2.6 million for FY 2019 to build three more crisis centers.|
|Iowa||State redesigned its mental health system in 2013, resulting in improved access and modernized services. It currently invests $2 billion in mental health services. Requested legislature to remove a cap on sub-acute beds and asked all stakeholders to develop a sustainable funding structure for crisis centers to increase access to residential access centers that provide short-term crisis care.|
|Massachussetts||Budget will include more than $83 million in new funding for Department of Mental Health to strengthen community-based services for adults with serious mental illness. Services will integrate behavioral and physical health, provide active outreach and engagement services, residential supports, clinical coverage, and include peer and recovery coaches as part of the treatment team.|
|New Hampshire||Commented on mental health crisis in the state, but noted state has made strides in addressing needs of mental health system. Provided funding for 60 new beds for community-based transitional housing and created a fourth rapid response mobile crisis unit. A state working group has prioritized the issue and is developing a comprehensive 10-year plan for the mental health system.|
|New Jersey||State has provided 60,000 behavioral health screenings, psychological services through schools or community service centers to 10,000 families, and drug addiction treatment services to more than 3,500 people affected by Hurricane Sandy.|
|New Mexico||State is providing more behavioral health services than at any point in its history.|
|Rhode Island||Noted lack of access to mental health care; will propose legislation to require health insurance companies to cover addiction and mental health treatment.|
|South Dakota||Noted importance of serving individuals with mental health problems through community-based approaches, and that the state needs to demolish, sell, or repurpose vacant state-owned institutions or those in disrepair. Mentioned state’s methamphetamine epidemic, and is addressing the issue through an education campaign that includes a prevention toolkit, expanding access to treatment, ensuring providers are trained in evidence-based treatment models, and a drug interdiction task force.|
|Utah||Mentioned that suicide has become leading cause of death among young people, and created a task force to address the issue.|
|Washington||Identified need to continue work on mental and behavioral health care, commenting that passing a budget would allow for expanded capacity in mental health system.|
|Wisconsin||Noted that last year the state provided schools with resources to add mental health services.|
|Wyoming||Mentioned state has addressed issues of bullying and suicide prevention through its Safe2Tell initiative for individuals to report suicide threats. Suicide prevention has been a statewide initiative for several; years and the state is holding its third annual suicide prevention symposium.|
Thirty governors specifically addressed heroin and other types of opioid abuse and overdoses — an increase from 21 in 2017 and 13 in 2016.
|Alabama||Established the Opioid Overdose and Addiction Council.|
|Alaska||State leaders recently issued a declaration of emergency for the opioid crisis and established an incident command structure to coordinate responses.|
|Arizona||Noted that in past year more than 800 residents died from opioids. Have taken steps to address issue, such as reducing doctor shopping, making naloxone available, and setting prescription limits, but seeks a more aggressive approach. Last June, state declared the crisis a public health emergency, and medical, addiction, and public safety officials have provided recommendations. Will call for a special session to focus on the issue.|
|Arkansas||Noted the need to continue addressing the opioid crisis.|
|Colorado||Included the need to halt the opioid epidemic in list of issues to address in this legislative period.|
|Delaware||Strengthened oversight of opioid prescriptions, expanded access to substance abuse treatment, and better coordinated efforts to help those battling addiction.|
|Florida||Noted that the state attorney general has been a leading voice in the fight against the opioid epidemic. Proposes to invest $53 million to address issue, also proposing legislation to prevent drug addiction on the front end, reduce the ability for dangerous drugs to spread, provide support to vulnerable individuals, and ensure law enforcement officers have necessary resources.|
|Illinois||Highlighted state efforts to address opioid epidemic, such as the 24/7 Helpline to connect individuals to resources, requiring drug prescribers to register for the prescription drug monitoring program, and permitting first responders to use medication to stop overdoses. Determined to reduce projected opioid deaths by more than one-third in the year ahead.|
|Indiana||Continuing to attack opioid epidemic through treatment, prevention, and enforcement. Working to integrate technology needed to help physicians access a prescription drug monitoring program, and this year plans to require physicians to use this system before issuing an opioid prescription. Plans to increase the number of opioid treatment locations, improve reporting of drug overdose deaths, and strengthen enforcement efforts.|
|Kentucky||Noted fighting the opioid crisis as a focus for 2018. Allocated $34 million to address the issue, and provided additional funding for pregnant women who are addicted.|
|Maryland||Opioid-related deaths last year exceeded deaths from firearms and motor vehicle fatalities combined. Last year, it was the first state to declare a state of emergency in response to the crisis. The state has committed $500 million toward the issue and substance use disorders generally, with a four-pronged approach focused on education, prevention, treatment, and enforcement.|
|Massachusetts||Progress made from three years ago when overdose deaths were very high — overdose deaths have declined 10 percent for the first time in over a decade and opioid prescribing has declined 29 percent. Since 2015, the state has added 1,110 treatment beds, increased spending on treatment by 60 percent, upgraded the prescription drug monitoring program, required teaching to medical and other professionals about opioid therapy and pain management, increased access to Narcan, and expanded education, screening, and treatment programs. Plans to add more treatment beds and increase spending on addiction services by more than $200 million over next five years. Noted the need to address Fentanyl because of an increase in overdose deaths associated with this drug. A proposed bill makes it easier to arrest and convict dealers. Expressed support for the CARE Act that will provide a framework for community-based, aftercare addiction services, expand school-based education, and broaden paths to treatment for people dealing with addiction.|
|Michigan||Noted the opioid crisis and the dramatic increases in addiction and overdose deaths in the last several years. The lieutenant governor has been a leader on the state task force and the state recently passed legislation to address the issue. Highlighted Angel Program, a state police program that enables individuals to go to certain stations and seek treatment help without fear of arrest.|
|Mississippi||The state created a task force in 2016 to address the opioid epidemic and develop recommendations that are being implemented, led by the Department of Public Safety and the Bureau of Narcotics.|
|New Hampshire||Most serious challenge is opioid crisis. Last year, it directed new funds for prevention, treatment, and recovery, and this year will be opening a youth addiction treatment center. Needs to expand focus of recovery programs by engaging employers. Will be launching Recovery Friendly Workplaces initiative to address addiction in workplaces and increase access to treatment.|
|New Jersey||Noted legislation passed last year to address opioid crisis, though acknowledged there are still too many opioid-related deaths. State has strongest limit on opioid prescriptions, which has decreased prescription rate by over 15 percent. Has a shared prescription drug monitoring program with 15 other states designed to reduce doctor shopping and pill mills across state borders. Since 2011, through its Project Medicine Drop program, the state has collected 88 tons of opioid pills for proper disposal. Created a way for pharmacists, doctors, nurses, and others to report suspicious use or sale of opioids, and placed limits on amounts pharmaceutical companies can pay doctors to minimize monetary influence in prescribing habits. Also expanded availability of Narcan, and the ReachNJ program works to reduce addiction stigma and connect families with treatment.|
|New Mexico||Noted that the state is restricting the use of narcotic medications.|
|New York||Mentioned need to address growing opioid epidemic with more prevention, education, enforcement, and treatment services, along with new efforts to sue certain distributors.|
|North Dakota||Commented on addiction and overdose deaths, mostly related to opioids and fentanyl. Expressed the need to address issue on a multi-dimensional front and approach addiction as a disease when designing treatments. A statewide task force has helped reduce prescriptions of opioids, while encouraging appropriate prescribing. Have also worked to bring attention to new addiction recovery approaches and promote access to Narcan. Should address the issue through prevention, early intervention, treatment, and recovery.|
|Oregon||Commented on need to address opioid crisis.|
|Pennsylvania||Expanded response to opioid crisis by providing law enforcement with necessary tools and increasing access to addiction treatment for individuals.|
|Rhode Island||State has made overdose crisis a top priority, resulting in an 8 percent reduction in overdose deaths in 2017. Noted the need to invest more in recovery/treatment efforts. Will add a new job training program for individuals in recovery.|
|South Carolina||Mentioned high rates of death due to opioids and heroin. Need to address the issue through a “full court press” of awareness, information, and treatment. Has declared the issue a statewide public health emergency to allow for wide use of state resources. State task force has developed a comprehensive informational website, is setting disposal protocols, and physicians are educating individuals about dangers of opioids. Proposes $10 million for treatment, prevention and education.|
|South Dakota||Noted the need to address opioids. The state’s prescription drug overdose death rate is relatively low (second lowest in nation), though over-prescribing is an issue in the state. Legislation passed last year requires pharmacies to use statewide database for painkiller prescriptions and participate in the prescription drug monitoring program. Mentioned laws passed in 2015 and 2016 that increase access to naloxone by giving supplies to first responders. Highlighted need to take many approaches involving providers, private organizations, law enforcement, communities, and individuals. State medical association is also providing resources for physicians to better recognize and treat opioid addiction and appropriately prescribe. Board of Pharmacy is establishing permanent drop-off sites for certain expired, unused, and unwanted prescription drugs. In 2016, established an advisory council on opioid abuse that supports developing capacity for medication-assisted treatment. Planning for a new media and school-based opioid prevention campaign in 2018.|
|Tennessee||Commented that the opioid epidemic is crippling the state and the nation. Noted recent announcement of a plan, TN Together, to address the crisis by focusing on prevention, treatment and law enforcement, and develop provisions to limit the supply of opioids, provide funding for treatment, and combat illegal sales and trafficking of opioids.|
|Vermont||Need to continue to combat opioid crisis, last year funded a new treatment center. Also created Opioid Coordination Council to identify prevention, treatment, recovery, and enforcement strategies. Will develop proposals to help individuals in recovery transition to workforce, and increase number of treatment professionals.|
|Washington||Commented on the need to continue to work on the opioid issue.|
|West Virginia||Mentioned the need to stop the drug epidemic and that state university researchers are looking at ways to curb addiction.|
|Wisconsin||Commented on the need to continue to work on the opioid issue and has signed 28 bills dealing with the challenge. Urges legislators to pass recent recommendations from a bipartisan commission.|
|Wyoming||Commented that overdose deaths have decreased, but that leading form of drug abuse for 12 to 25 year olds is still prescription painkillers. State will launch educational campaign targeting teens and young adults.|
Eight governors also spoke about improving behavioral health services to better meet the needs of justice-involved individuals as they transition back into communities and/or providing mental health and substance use disorder treatment services rather than incarcerating individuals when appropriate.
|Arkansas||Funding is in place for four Crisis Stabilization Units, which are expected to have a major impact on those suffering from mental health issues and ease the burden on county jails and hospitals.|
|California||Need more mental health and drug treatment programs and better training and education in the context of reforming the overall criminal justice system.|
|Georgia||Criminal justice system reforms include increasing number of accountability court programs, such as drug and mental health courts.|
|New Jersey||Noted completion of a conversion of a state prison to an inpatient drug treatment facility. State has also made drug courts available statewide.|
|North Dakota||Acknowledged that about 75 percent of people in the criminal justice system have an addiction and they should receive treatment while incarcerated. Treatment services rather than incarceration should be provided when appropriate and noted the state’s new “Free Through Recovery” initiative.|
|Oklahoma||Commented that there should be solutions other than incarceration for non-violent offenders in need of substance abuse treatment and that too few of these individuals are receiving this treatment.|
|South Dakota||Noted significant impact of the methamphetamine epidemic on criminal justice system. State has the highest juvenile incarceration rate in the nation but most are non-violent offenders. There has been some progress in expanding capacity of drug and DUI courts and community-based treatment programs. Legislation passed requires jail time for individuals who use drugs while on probation or parole, and expands availability of 24/7 HOPE probation for drug offenders. Reforms have also included functional family therapy for juveniles and expanded capacity in specialty drug and DUI courts for adults. Noted state’s lower recidivism rate for justice-involved individuals who need and complete substance use disorder treatment in comparison to the overall criminal justice population.|
|Wisconsin||Planning to implement reforms to juvenile justice system, will focus on smaller facilities with some providing mental health and substance use disorder treatment and trauma-informed care.|
In total, 19 governors mentioned the issue of Medicaid and/or Medicaid expansion in their speeches, compared to 21 last year. Ten governors addressed their states’ Medicaid programs, such as commenting on recent program improvements, the growth of overall program costs, or cost savings achieved through program reforms.
|Alabama||Fewer people are eligible for Medicaid than a year ago, and as a result, Medicaid will require less general fund appropriations than expected.|
|Arkansas||Noted that state has come a long way in reforming its welfare programs and there are fewer individuals on Medicaid than when governor took office (117,000 individuals left Medicaid in 2017—many of whom found work). This has resulted in returning nearly $500 million in new Medicaid spending to the federal government. Remaining growth in Medicaid spending is the result of the change in the federal match rate, elimination of $50 million in one-time funding for Medicaid, and normal cost increases. Commented that more reforms are necessary, but much has been accomplished without reducing benefits. Will focus on the enforcement of current eligibility requirements through more efficient determination process and breaking down government silos. Also, in 2016, asked for Medicaid transformation initiatives to produce at least $835 million in savings over the next five years. The state is on track to meet that goal due to the Legislative Health Care Task Force.|
|Illinois||Healthcare Fraud Elimination Task Force, in collaboration with the inspector general, has helped root out Medicaid fraud, resulting in $450 million in taxpayer savings.|
|Iowa||Last year, state modernized the Medicaid system, moving to a patient-centered approach through managed care. Commented that prior to her tenure there were mistakes made in its implementation, and so took action to address issues with new staffing, working with managed care organizations to ensure good outcomes, and individualized patient care.|
|Massachusetts||Discussions with legislature and other interested parties about MassHealth have been helpful, and thinks that shared goals of quality care and long-term sustainability can be achieved.|
|Mississippi||Need to address Medicaid cost increases, caused in part by poor health choices that lead to higher mortality rates and disabling conditions, which must also be addressed. The state’s goal is to prevent poor health from getting worse and focus on getting Medicaid patients well. Also noted the need to both manage the program’s current needs and ensure sustainability for future demands while addressing waste, fraud and abuse. Asked legislature to properly frame the Medicaid Technical Amendments Act. Has tasked the Department of Human Services (DHS) and Medicaid to jointly identify beneficiaries’ needs and more effectively address them, and noted is considering moving Medicaid eligibility determination to DHS. Commented on waiver request to implement work requirements for Medicaid enrollees to help move individuals from government health care to employer-sponsored health care.|
|New York||Health care investments must continue, and Medicaid and CHIP programs must be preserved.|
|Oklahoma||Commented that the state should not reduce rates paid to providers in order to address budget issues.|
|South Dakota||Has asked the Department of Social Services to pursue a waiver to implement Medicaid work requirements. Proposes to pilot the program in two counties where there is the greatest availability of employment and training resources. Indicates state will provide interim resources, such as childcare assistance and premium assistance, to families as they transition off Medicaid. As state waits for approval of waiver, it will begin a voluntary program in July.|
|Wisconsin||Noted that the state’s Medicaid waiver covers all individuals earning less than the poverty level.|
Ten governors addressed Medicaid expansion in their speeches. Five governors commented positively on expansion or the potential for expansion, while Maine’s governor commented negatively on moving forward with implementation of his state’s voter-approved expansion.
Six governors referred to work requirement proposals for certain Medicaid enrollees that they had submitted to federal officials or that they plan to pursue (in some states these requirements would apply only to the expansion population, while others want to apply them more broadly).
|Alaska||Commented that 40,000 additional Alaskans now receive health care since the state expanded Medicaid, and that expansion gave the state $500 million in additional federal dollars.|
|Arkansas||Anticipates state will receive federal approval to implement a work requirement for the Arkansas Works program before the end of the state’s legislative session, and indicated it would be one of the most stringent in the country. Believes able-bodied, working age adults without dependents should be working or in training, and stated that the only long-lasting solution to lowering the cost of Medicaid is to help more people earn their way off the program.|
|Indiana||Mentioned pending federal approval of Health Indiana Plan extension, which will include expanded substance use disorder treatment services and efforts to transition certain individuals to employment (at time of speech extension had not been approved).|
|Kentucky||Noted recent approval of 1115 waiver and that Medicaid for able-bodied working aged men and women without dependents will change. (Addressed in the context that the state is going to lead on the front of reforming entitlements.)|
|Maine||Agreed to obey the law requiring Medicaid expansion, but thinks it is bad public policy to give able-bodied people a “free ride.” Noted that although believes expansion will plunge state into financial disarray, he called on the legislature to appropriate funds for implementation and identified four principles to guide the decision on how to fund the expansion:
Noted that it is important for the elderly and mentally and physically disabled to be prioritized. Also, Medicaid agency cannot hire and train the additional staff needed or cover the state’s share for new enrollees without additional funds.
|Michigan||Highlighted success of the state’s Medicaid expansion waiver that covers 675,000 people, with 80 percent now receiving annual physicals and avoiding emergency room visits.|
|New Hampshire||Commented that state is in process of developing a state-specific design for Medicaid, specifically seeking to add viable work requirements for expansion population while maximizing flexibilities and options.|
|New Jersey||Noted benefit of Medicaid expansion in relation to drug treatment, and that the state has a federal waiver to open additional treatment beds and connect patients with recovery coaches after drug overdoses.|
|Pennsylvania||Commented positively on state’s implementation of Medicaid expansion and reducing uninsured rate to historic low.|
|Virginia||Noted that he strongly supports Medicaid expansion, both to cover uninsured residents who lack access to care and to benefit state economy and rural hospitals (Gov. McAuliffe).|
In addition to addressing Medicaid costs, 11 governors also spoke about state health care costs more broadly, and most stressed the need for more affordable health care.
|Alaska||Working internally and with other states and the federal government to explore options to reduce overall health care costs. Has reduced health care premiums by 26 percent through a reinsurance program that is being replicated across the country.|
|Colorado||Fixed the hospital provider fee, which prevented the closing of rural hospitals. The state has some of the most high-cost counties in the country for health care spending and 14 rural counties have only one Affordable Care Act (ACA) plan available. Noted that federal policymakers need to move past the fight over the ACA, which has helped reduce bankruptcy caused by medical debt in the state by 60 percent.|
|Connecticut||Noted that affordable health care is under assault by federal policymakers, and without action premiums will rise and life-saving treatments will be out of reach.|
|Delaware||Noted that health care costs are the biggest driver of state budget growth, accounting for 30 percent of the budget. Called for state government and hospitals to come together to find a solution.|
|Maine||Noted state has paid off hospital debt using the liquor bond, though it should have been implemented incrementally rather than all at once. Identified $800 million in capital investment of hospital projects on the drawing board. Noted that state has reformed health insurance to lower costs.|
|Maryland||Called on the legislature to address health insurance rate increases caused by the failures at federal level and to develop bipartisan solutions to stabilize rates.|
|New Jersey||Mentioned the need to address costs associated with state employee health benefits.|
|New York||Started year with $4 billion deficit compounded by a $2 billion cut primarily due to federal government funding changes and health care.|
|North Dakota||Noted significant amount of the budget is allocated to health care.|
|Pennsylvania||Commented that the state has been able to reduce health care costs.|
|Vermont||Reached an agreement to return $13 million to taxpayers through health care premium savings due to renegotiation of health insurance coverage for school employees.|
Twelve governors addressed issues related to the health care workforce, primarily strategies to address provider shortages. This is a significant increase from eight governors who mentioned health care workforce in 2017 and five in 2016.
|Alabama||Proposed funding for loan repayment programs for dentists and physician assistants who agree to work in underserved/rural areas.|
|Idaho||Commented that health care is an economic driver and leads employment growth (accounting for 46 percent of overall job growth), but noted state’s chronic shortage of physicians and other providers, especially in rural areas. Highlighted upcoming opening of a new osteopathic medicine school, which will bring more residency opportunities for physicians. Budget will recommend funding for 11 new residencies in certain regions. Currently has 40 seats for Idaho medical students in the regional medical education program consortium with four other states that also lack medical schools.|
|Iowa||Highlighted investment of $4 million for a new psychiatric medical residency program to bring in more psychiatrists, and a new partnership with Des Moines University and the National Alliance on Mental Illness to provide new doctors with training to identify mental health issues.|
|Kansas||Opened new medical education building at University of Kansas School of Medicine that will provide openings for an additional 50 doctors each year. Commented on need to end shortage of rural physicians and dentists, which has chronically plagued the state, by training more professionals.|
|Mississippi||Created a new medical school at the University of Mississippi to train physicians to address the state’s shortage of medical professionals with a goal to add 1,000 new physicians by 2025. Also noted that the medical profession is a significant economic driver in the state.|
|Missouri||Noted the need to grant reciprocity of health care licenses from other states (provided example of dentistry).|
|Nebraska||Has improved efforts to issue licenses more quickly for medical professionals (e.g., has reduced nurse licensing processing time by about one-third since 2015).|
|New Jersey||Noted that due to state efforts over a number of years, universities have expanded medical health sciences education programs. Rutgers University has a medical school, schools of public health, and a cancer institute, and receives more National Institutes of Health funding than before. Rowan University gained an osteopathic medicine school and now has two medical schools.|
|New Mexico||Should recognize certifications from other states, in particular nurses, and requested legislature pass an interstate nursing compact bill. State has dramatically expanded health care workforce, especially in nursing.|
|North Dakota||Mentioned the state’s shortage of health care providers and nurses.|
|Oregon||Noted that health care is one of the largest growing industries in the state, and recommends training opportunities should be improved and expanded, such as developing apprenticeship-type programs in different health care and other fields, and better aligning training and requirements for home care and community-based care delivery professions to ensure a career ladder for people entering these professions.|
|South Dakota||Focused on building the overall workforce in the state, and noted privately-funded donations matched with state dollars for the Build Dakota Scholarship Fund (began in 2014), which provides scholarships for students to attend technical institutes who then promise to work in the state after graduation. Includes fields such as surgical technology and nursing. Requested legislature pass a bill to develop an interstate licensure compact (noting doctors as one of the examples) with governors of nearby states, allowing professionals to move to another member state and practice for 18 months (enough time to earn another license in their field).|
Nine governors mentioned the need to improve population health and building healthy communities through efforts such as targeted investments to address health and social disparities.
|Connecticut||Characterized health care as a basic human right that should never be out of reach for anyone.|
|Delaware||Highlighted a “healthier Delaware” as a priority for 2018.|
|Hawaii||Highlighted that the state is one of the healthiest in the nation and has led the nation in health insurance coverage for decades.|
|Massachusetts||Noted that United Health Foundation called the state the healthiest in the nation, and AARP has designated it as one of only two age-friendly states in the country. Noted state’s commitment to provide all residents with access to quality care and preserve its health insurance program put in place a decade ago. Will continue to advocate for bipartisan fixes to the ACA.|
|New York||Creating a new health care initiative called Vital Brooklyn to address chronic social, economic, and health disparities by targeting investments in eight integrated areas to create a new model for community development and wellness (e.g., increasing access to open spaces, healthy food, and high quality health care services.)|
|Pennsylvania||Will focus on building a stronger and fairer economy, healthier and safer communities, and new opportunities for the next generation.|
|Vermont||Noted state frequently ranks as safest, happiest, and healthiest, but needs to focus on cost-of-living issues.|
|Virginia||The state has regional health disparities that affect life expectancy that should be addressed through efforts such as better access to care and effective interventions for addiction or mental health challenges (Gov. Northam)|
|Washington||Indicated state should strengthen relationship with counties to promote healthy communities.|
Most governors mentioned other health topics in their speeches, either as recent accomplishments or as future goals. These included supports for seniors, disabled individuals, children in foster care, and women’s health, and efforts to address broader social and/or environmental issues affecting health.
|Alabama||Is negotiating with a new health care provider for the state’s prison system to expand and improve inmate health care at a reasonable cost.|
|Alaska||Mentioned compact between Office of Children’s Services and tribal organizations to benefit children in foster care.|
|Arizona||Prevented sending disenrollment notices to families with children enrolled in CHIP by providing state funding (governor also implored Congress to act on CHIP, because at the time of the speech, it had not yet funded the program). Noted the state has addressed problems in the child safety department and was recently recognized as best in the country for foster care reduction. Last year, expanded the Happy Babies initiative that allows new parents employed by state agencies to bring newborns to work and now private sector companies are interested in developing similar programs.|
|Arkansas||State utilized $8 million last year from the Tobacco Settlement Fund to reduce the Developmentally Disabled Waitlist by 500. Noted the need to address the insufficient reimbursement of pharmacists who work in rural communities.|
|California||State is leading on clean air initiatives, such as implementing appliance efficiency standards, promoting renewable electricity and zero-emissions vehicles, and other measures to reduce air pollution. Also noted passage of water bond that invests in safe drinking water, conservation, and storage.|
|Colorado||Family planning initiative has helped reduce the abortion rate among teens by 64 percent. Commented that state has “swelled our ranks in health care with 600,000 more enrollees while prioritizing value.”|
|Connecticut||Noted that state built one of the most successful health care exchanges in the nation and that just this year more than 100,000 residents found health insurance through the exchange. Wants to pass a bill to improve state’s paid sick leave law, which was the first in the nation in 2011.|
|Delaware||Announced support for paid parental leave for all state employees.|
|Illinois||In response to outbreak of Legionnaires’ disease at the Quincy Veterans Home two years ago, partnered with the US Centers for Disease Control and Prevention to install a $6 million water treatment system and instituted water flushing and purification best practices, resulting in a substantial reduction in Legionnaires’ disease and detectable legionella in water systems.|
|Indiana||Noted that the state regularly ranks among the worst for infant mortality, and so is implementing a Levels of Care program to assure that the highest-risk babies are delivered at hospitals with the facilities to meet their needs, and set a goal to become the best state in the Midwest for infant mortality rates by 2024.|
|Iowa||Last year state passed a law prohibiting late-term abortions. Requested legislators to develop a bill focused on improving water quality.|
|Kansas||Noted that infant mortality rate is at the lowest point in state’s history. Would like the state to lead the country in developing new treatments using adult stem cells. Noted that with the passage of legislation “protecting and honoring life,” there have been 17,000 fewer abortions in the past six years.|
|Kentucky||Plans to fix its foster care and adoption system, as it now has 8,500 children in foster care and more than 2,400 eligible for adoption. Will provide additional funding for the Department for Community Based Services, including $10.8 million for a new program specifically targeting adoption and foster care.|
|Maryland||Commented that legislation to provide paid sick leave is close to passing. State has enacted clean air standards that are stronger than 48 other states and nearly twice as strong as the Paris Accords.|
|Massachusetts||Noted that Health Connector had initial challenges, but just finished its third consecutive positive open enrollment period, providing more than 240,000 working families with affordable health care coverage. Pledged that regardless of federal-level actions, no woman in the state will be denied reproductive health care services.|
|Michigan||Noted that Flint has continued to have good water quality results and they are continuing the replacement of lead service lines.|
|Mississippi||To address systemic issues related to poor school and student performance, has created an Early Childhood Advisory Council with experts in education, health care, child welfare, mental health, and early childhood learning. Noted improvements in foster care system through creation of the Department of Child Protection Services. Noted planned expansion of children’s hospital, which along with other facilities and changes (such as building a new medical conference center) will help build a medical corridor/zone. Also highlighted plans for construction of a long-term palliative care unit, which will offer a home-like treatment facility for medically fragile children. Highlighted the new “medical city” in Harrison County, where there is a new pharmacy school, a nursing and simulation center, and the National Obesity and Diabetes Research Center. Commented that the health of the state’s population continues to lag behind most of the nation, with a need to encourage more preventative health care to address obesity, substance abuse, and sexually transmitted diseases.|
|Missouri||Made it easier for foster care children to obtain birth certificates without fees, and noted passage of Foster Care Bill of Rights and improvements to adoption process, along with other associated legislative initiatives. Also noted that the Department of Natural Resources has worked to ensure that state has achieved safest drinking water in almost 20 years.|
|Nebraska||Commended legislative efforts to protect injured first responders from losing health insurance. Noted significant increase in number of children coming into child welfare system due to parental methamphetamine use, and recommended additional funding and creation of task force.|
|New York||Cited health concerns related to the plume of contamination caused by industrial waste from manufacturing facilities in Oyster Bay, and that state will provide $150 million to address issue. Also noted environmental threats to drinking water. Has made historic investments in health care, which will keep health care industry as a strong and vibrant economic engine, and is investing in building new hospitals. Encourages legislature to enact the Contraceptive Care Act. Noted the need to address homelessness, especially the needs of those who are sick and/or mentally ill.|
|Oklahoma||Noted efforts implemented to address needs of abused and abandoned children by increasing the number of foster care homes (highest number of gains in these homes in the nation).|
|Pennsylvania||Commented positively on state’s upcoming implementation of medical marijuana availability and its help to individuals in pain. Noted state has expanded opportunities for seniors to receive home health care.|
|Rhode Island||Passed legislation last year for worker sick leave. Highlighted that nearly every state resident has health insurance, and that premiums on the exchange are the lowest in the nation.|
|South Dakota||Noted state’s emerging biotech sector, which includes development of a new facility for a company known for developing human antibodies aimed at preventing and treating cancer, autoimmune diseases, and infectious diseases. Discussed issue of infant mortality and associated task force led by governor’s wife, who worked with doctors, nurses, tribal health workers, social workers, and the Department of Health to research the issue. Birthing hospitals have followed through on one recommendation to reduce early elective deliveries. Additional resources provided to educate pregnant women about the dangers of tobacco use have led to declines in usage since 2011. There are also efforts to promote safe sleep practices, and state infant mortality rate overall has gone down to its lowest levels.|
|Vermont||Noted state has been a leader in expanding access to health care and should continue building on this by focusing on prevention while moderating costs. Will continue to test voluntary pilot program that has more than 5,000 providers participating (including most hospitals) that pays for care quality rather than quantity. Will continue to evaluate if this pilot meets state goals of better health, quality and sustainable costs. State will be proposing additional prevention-focused efforts.|
|Virginia||Noted that when regulations risked closing nearly all of the state’s women’s health clinics, the state took action to protect access to care. Noted being first state in the nation to functionally end veteran homelessness (Gov. McAuliffe). Committed to continuing personally caring for patients at Virginia’s Remote Area Medical clinic and also providing coverage to more residents. Highlighted the issue of nearly 400,000 residents who are one illness or accident away from bankruptcy because they lack insurance (Gov. Northam).|
|Washington||Need to ensure women’s health care rights, such as full access to contraception, including long-acting reversible contraception. Noted passage last year of best paid family leave program in the nation. Noted investments in health care system, with state biotech companies developing new cancer treatments. Urged legislators to address public safety and health by supporting measures to reduce gun violence. Commented that climate change is a threat to the health of the state and its children and businesses.|
|Wisconsin||Cited the Fostering Futures initiative started last year to focus on incorporating trauma-informed care for foster care children. Commented that the state’s health care systems are ranked first in the nation for quality, and that the percentage of people with access to health coverage is one of the best. Noted that eight years ago, about 4,000 people with disabilities were on long-term care service waiting lists, and many counties were not included in long-term care programs. With expansion of long-term care services this year, the state will be able to eliminate waiting lists for all children needing long-term care services. Is now seeking permanent federal approval of a waiver to provide SeniorCare (a state prescription drug assistance program). Since it was first approved in 2002, the state has requested an extension of SeniorCare four times.|
|Wyoming||Noted state’s 10-year homelessness plan, and the need to create a skilled nursing center for veterans.|
With debate and uncertainty at the federal level, eight governors commented about potential changes that may occur to the Affordable Care Act and health coverage in general. Many indicated they would take action to increase access to affordable health care no matter what changes occur at the federal level. Some specifically mentioned reforms to stabilize their individual insurance markets and constrain premium costs for consumers.
|California||Noted the state boldly embraced the ACA by enrolling 5 million more people in Medi-Cal and 1.3 million in Covered California. Expressed appreciation that ACA repeal did not occur in Congress in 2017.|
|Connecticut||Stressed the state must act to ensure insurance marketplace stability and constrain premium costs. Urged legislature to pass a bill that preserves the most vital elements of the ACA, including the individual mandate, making it clear that in Connecticut health care is a fundamental right. Also wants to pass a law that ensures birth control remains cost-free, irrespective of what happens at the federal level.|
|Idaho||Commented on importance of making health care more accessible and affordable, and how the state can ensure there is an adequate supply of trained workers in health care and STEM fields. Noted that despite some uncertainty on federal level health policy, the state has proposed ideas, such as the Idaho Health Care Plan proposal, as a way to be both conservative and compassionate. Highlighted this was not Medicaid expansion and strongly emphasized support for it. While state funds will be needed, the plan will lower health costs for families.|
|Iowa||Prior to ACA, commented that state had an insurance market with relatively low costs and high participation, but that market is collapsing now. Indicated Iowa will continue to call on Congress to repeal and replace the ACA, but meanwhile the legislature should pass legislation to increase access to affordable insurance.|
|New York||Noted that federal government is trying to “roll back health care for the poor,” and identified health care as a human right that the state will protect and preserve.|
|Oregon||Promised to protect health care for state residents from federal level efforts that threaten care.|
|Rhode Island||Commented that when Congress sought to repeal health care coverage, the state spoke out against it and emphasized that the state will continue to protect coverage.|
|Wisconsin||Proposed the Health Care Stability Plan, which will include focus on passing a state law to guarantee coverage of pre-existing conditions (the state Assembly has already passed legislation). Also proposing through the plan that the state provide assistance to cover premium costs for people seeking coverage through the individual market by creating a reinsurance program through a 1332 waiver.|
* As of late February 2018, the governors of LA, MT, MN, NV, NC, OH, and TX had not yet held their speeches or did not have a 2018 address planned.
**Jeff Colyer became governor of Kansas on Jan. 31, 2018, after Sam Brownback was confirmed as U.S. Ambassador-at-Large for International Religions Freedom.
***Ralph Northam was sworn in as Virginia’s governor on Jan. 13, 2018. Information from former Gov. McAuliffe’s state of the state speech and Gov. Northam’s inaugural address are both reflected in this chart.
As states pursue a wide range of legislation to address rising drug costs, four more states have joined Utah and Vermont to introduce bills to import prescription drugs from Canada through a state-run, wholesale operation.
This market-based approach to providing more affordable medicines from Canada, where prescription drugs cost on average 30 percent less than in the United States, is appealing to a politically diverse group of states, and is currently under review by legislators in:
- Colorado (S 80);
- Missouri bill studies the creation of an importation program (SB 722);
- Oklahoma (SB 1381);
- Utah (HB 163);
- Vermont (S 175); and
- West Virginia (HB 4294).
A fiscal analysis recently completed in Utah indicated the potential for millions in reduced spending due to the significant price differences between certain products sold in the United States and Canada. This month, NASHP is convening state legislative sponsors to share information and expertise about the importation policies in their states. Many of the importation bills currently under review are based on National Academy for State Health Policy’s (NASHP) model legislation.
If an importation bill passes in a state legislature and is signed into law by the governor, the next step is to seek certification from the US Health and Human Services Secretary Alex Azar by proving that the state’s importation program meets federal requirements to ensure both product safety and consumer savings.
NASHP’s model legislation was designed to meet federal requirements by taking the form of a state-administered system of wholesale importation and distribution limited to pharmaceuticals from Canada. States can decide whether to purchase lower-cost drugs for public programs only, or to expand the importation initiative to also serve commercial health plans.
The program’s imported drugs would be safe and would produce savings because a state would:
- Select only Canadian suppliers who are licensed and regulated under Canadian law;
- Select only drugs to be imported that are already approved for the Canadian market;
- Provide the drugs only to distributors, pharmacies and other dispensers, and health plans, that volunteer to participate in the program. Participants would agree to purchase and reimburse drugs at the import price and patients would share the cost savings and pay the import price as well. The imported drug costs would be made publicly available to create greater drug pricing transparency for consumers;
- Ensure that the imported products are distributed in-state only; and
- Monitor/audit the system for compliance, safety, and savings.
Salt Lake City, Utah: Today, Republican state legislator Norman Thurston introduced groundbreaking legislation to create a safe, state-run prescription drug importation program that would import high-cost drugs from Canada, where prescription drugs cost 30 percent less than in the United States.
The proposal for a whole-sale importation program of select, higher-cost drugs that are already licensed for sale in Canada would be among the first in the nation and promises to generate significant cost savings for the state of Utah and its consumers. The Utah bill closely follows model legislation developed by the National Academy for State Health Policy (NASHP), a nonpartisan group that works closely with state policymakers to develop state legislative and regulatory strategies to rein in pharmaceutical costs.
For more than a decade, Thurston, a respected health care advocate and member of NASHP’s Pharmacy Cost Work Group, has worked tirelessly to reduce state spending on prescription drugs. Aware of his “red” state’s concerns about regulations and the complexity of drug price transparency legislation implemented in other states, Thurston took a different approach to rein in drug costs by proposing drug importation.
“Utah will control which drugs are imported and will monitor this program so the savings make it all the way down to consumers when they fill prescriptions,” said Thurston. “The State of Utah pays for drug benefits for a quarter of its population, including state and local government employees and retirees, teachers, and Medicaid enrollees. At some point, we need to ask ourselves, ‘as a major drug purchaser, why aren’t we getting a better deal?’ Other major purchasers such as Canada and Europe get a much better deal than us.”
“The time is right for a well-run state importation program, considering the US drug market already relies heavily on pharmaceutical drug importation,” observed NASHP Executive Director Trish Riley. Currently:
- 80 percent of raw ingredients for drugs made in the United States are imported from China and other countries;
- 40 percent of finished drugs used in the United States are manufactured in other countries;
- The U.S. Food and Drug Administration (FDA) has had a cooperative agreement addressing drug regulatory matters with Canada for years, more than 30 Canadian drug manufacturers are FDA-registered to produce drugs for US markets; and
- About 20 percent of drugs licensed for the Canadian market are made in the United States.
“Consumers continue to be outraged by the price of necessary prescription drugs, and the federal government has not acted to stem the cost of drugs,” noted Riley. “States can be great laboratories for innovation and this is a great opportunity for Utah to be a national leader and develop new approaches that can be adopted by other states and ultimately by the federal government.”
Early in 2017, Thurston convened a working group of Utah stakeholders, including state agencies that pay for prescription drugs, commercial health plans, pharmacists, community clinics and others, to outline how a Utah wholesale importation should operate. The Utah work group tailored the bill closely after NASHP’s model.
The group’s recommendation culminated in the bill Thurston introduced today. Thurston developed the bill in compliance with federal regulations governing drug importation that require guarantees of drug safety and consumer savings. The legislation also requires federal approval from the Secretary of the US Department of Health and Human Services. Thurston and members of his stakeholder group indicated they are confident the federal government will approve the Utah program.
The legislation will safeguard the quality and safety of imported drugs by:
- Contracting with licensed, regulated drug wholesalers and distributors in Utah and Canada;
- Importing only drugs licensed for sale in Canada;
- Testing imported products for purity on a sample basis if needed; and
- Limiting distribution of imported drugs to only Utah.
The legislation will deliver significant consumer savings by:
- Monitoring market competition among Utah wholesalers;
- Ensuring that consumers pay similar prices to those charged in Canada; and
- Widely publicizing the prices of the imported products so consumers know what they can expect to pay.
Utah is one of several states currently considering drug importation legislation.
NASHP’s Center for State Drug Price Action: Provides technical and strategic assistance to states to reduce their prescription drug spending and regularly convenes its Pharmacy Costs Work Group to address policy and strategic issues. The work group is made up of leaders from governors’ staff, state legislatures, Medicaid programs, public employees, attorney generals’ offices, state-based insurance exchanges, comptrollers’ offices, and corrections departments. The group explores new approaches to limit pharmaceutical costs by examining the many levers state governments have as policymakers, regulators, and purchasers.
About NASHP: The National Academy for State Health Policy (NASHP) is an independent academy of state health policymakers. It is dedicated to helping states achieve excellence in health policy and practice. A non-profit and non-partisan organization, NASHP is the “United Nations of state health policy,” providing a forum for constructive work across branches and agencies of state government on critical health issues.
As states transform their health systems, many are turning to community health workers (CHWs) to improve health outcomes and access to care, address social determinants of health, and help control costs of care. While state definitions vary, CHWs are typically frontline workers who are trusted members of and/or have a unique and intimate understanding of the communities they serve. NASHP has produced a number of resources, below, to support state efforts to incorporate CHWs into their health and health equity improvement work. If you would like to suggest a resource or share your state’s efforts, please contact Malka Berro at firstname.lastname@example.org.
- Innovative Community Health Worker Strategies: Medicaid Payment Models for Community Health Worker Home Visits, December 2017. This case study examines Medicaid payment models from Minnesota, New York, Utah, and Washington for CHWs providing in-home services that address healthy home environments.
- Innovative Community Health Worker Strategies: My Health GPS in Washington, DC, Seeks to Achieve Sustainable Funding and Whole-Person Care, November 2017. This case study explores the financing and roles of CHWs in My Health GPS, the District of Columbia’s health home program.
- Community Health Workers: Policy Opportunities for Population Health and Patient-Centered Health Care, October 2017. This NASHP conference session highlighted state strategies and experiences in CHW financing, training, and oversight. Speakers from Oregon, Texas, and Wisconsin discussed the national CHW landscape and policy opportunities that could be explored to advance the CHW workforce in states. Please click on the speakers’ names to access their conference slides.
- State Community Health Worker Models Map, last updated August 2017. This map highlights state-level activities and policies to integrate CHWs into evolving health care systems in key areas such as financing, education and training, certification, and state definitions, roles and scope of practice. The map includes enacted state CHW legislation and provides links to state CHW associations, state agencies, and other leading organizations working on CHW policy in states. An instructional video, designed with support from the National Center for Healthy Housing (NCHH) and the W.K. Kellogg Foundation, is available to facilitate use of the map.
- Community Health Workers in the Wake of Health Care Reform: Considerations for State and Federal Policymakers, December 2015. This brief captures key themes that emerged during an October 2015 meeting of state and federal leaders to identify areas in which state and federal policy can align around the use of CHWs in transforming health systems to achieve better care, lower costs, and improved population health.
These resources were produced and updated with support from the Robert Wood Johnson Foundation, The W.K. Kellogg Foundation, the National Center for Healthy Housing, and The Commonwealth Fund.
For more than a decade, Utah State Legislator and Director of the Office of Health Care Statistics Norman Thurston has worked to reform his state’s health care system, including its Medicaid program, and is considered one of the state’s “go-to” health care policymakers.
Thurston, a Republican, has worked to reduce state spending on prescription drugs and is a member of the National Academy for State Health Policy’s (NASHP) Pharmacy Cost Work Group and its Health Care Access and Financing Committee. Sensitive to his state’s aversion to regulations, he is taking a unique approach to reining in drug costs by proposing legislation to import prescription drugs from Canada.
Recently, NASHP caught up with Thurston at its 30th Annual State Health Policy Conference in Portland, OR, to ask him about his prescription drug initiative.
How did you get interested in health care policy?
When I was in graduate school for applied microeconomics looking for field of emphasis, someone suggested I look into heath care because of the expected growth in health economics research. It turned out to be excellent advice. (Thurston, a Utah native, has a masters and PhD in economics from Princeton.)
How did you come to work for lower prescription drug costs?
NASHP suggested that states look at this. In the health care statistics world we are of course always looking at costs, and I love looking at data, so this was naturally an interesting question.
You have sponsored a bill to import drugs from Canada, where most prescription drugs cost a fraction of what they do in the United States. Why did you choose that approach instead of proposing a bill to regulate drug costs?
First, federal law already allows importation of drugs to happen, and passing a rate-setting bill (with a cost control commission that regulates drug costs like a public utility) may be fine for some blue states, but it’s not very appealing to a red state like Utah. We decided to look at something creative, and importing drugs fit our abilities.
Utah is unique in its politics and approach. We’re dealing with an industry that has a lot of market power, and you need to address market power with market power. The State of Utah pays for drug benefits for a quarter of its population (including state and local government employees and retirees, teachers, and Medicaid enrollees.) At some point, we need to say, ‘as a major drug purchaser, why aren’t we getting a better deal?’ Other major purchasers such as Canada and Europe are getting a much better deal than us.
Where does the bill stand today?
We’re drafting it now and working with stakeholders, including payors, public employee health plans, regional health carriers, retail pharmacists, and pharmacy benefit managers. Drug manufacturers are interested too, though perhaps not in the way we want them to be just yet.
The constituency I worry the most about in terms of how they will react to this idea is the free market conservatives, many of them are not sure how to react. Drug manufacturers are given a patent on their product and they have a monopoly. So how much latitude should we give someone as a monopolist? How should we approach this and talk about it?
Then why not take a rate-setting approach toward this monopoly?
Politically, it wouldn’t fly in Utah, far more people would have a problem with it and would wonder how would state government would know what’s a fair drug price? But when it comes to importing drugs from Canada, there are drugs that cost more in Canada and there are some that cost 10 percent of what they cost here. We need to figure out what they are and how to gain some real savings.
What’s the hardest aspect about convincing Utah to import drugs from Canada?
Most of it is logistics, how do we get them here, labelled correctly, and distributed to patients? It’s a logistics issue, not a philosophical one, and there are ways of addressing it. Our next session starts in late January. I’d like to have a solid draft of the bill in mid-December and start circulating it for comment and feedback.
Could you have done this without NASHP?
I think some things would have happened without NASHP, but NASHP has found a way to bring us together and move the dial forward and ramp it up. I like the 11-point report we produced on drug price controls that has gotten a lot of people’s attention and I’m surprised at the number of states that are doing things.
Thurston can be both a state lawmaker and employee because, he explained, the Office of Health Care Statistics performs objective tasks such as collecting and analyzing data about health care cost and quality and therefore avoids any conflict of interest when it comes to policymaking.
With 80 bills introduced in 2017, there is a high level of interest in pharmaceutical pricing among state legislators. However, despite legislative sessions wrapping up, very few laws have been enacted. To date, bills have passed in Maryland, Montana, New Mexico, New York, and Utah.
In 2016, Vermont led the way with a price transparency law that, in brief, requires the state to identify up to 15 drugs that account for significant state spending and which have seen price increases of either 50 percent over five years or 15 percent over one year. Manufacturers of those products have to submit price increase justifications to the Attorney General and that information will be made public.
2017 legislation built on Vermont’s first initiative and went a bit further to address drug pricing.
Legislation in Utah directs the Department of Health to study the feasibility of a prescription drug importation program that could be certified by the Secretary of the U.S. Department of Health and Human Services. The Utah Department is to report back to the Legislature by November 2017. Similarly, in Montana a bill directs the State Legislative Council to establish an interagency committee to study drug pricing and state drug spending trends, and make recommendations about drug spending by September 2018.
In New Mexico, the bill would have created an interagency group of state agencies to explore ways of reducing the cost of prescription drugs on state programs. The bill provided direction for what the group should explore but did not require the individual agencies to adopt any of the recommendations. It died on the Governor’s desk.
Maryland’s bill, which is awaiting the Governor’s signature, will give the State Attorney General and Circuit Courts authority to penalize the makers of essential generic and essential off-patent medications for excessive price increases.
This bill permits the Medicaid agency to notify the attorney general when an essential generic medication or off-patent brand drug has an excessive price increase. There are several criteria for what may constitute an excessive price increase among drugs where total cost of 30-day supply is greater than $80 or where the drug price increased more than 50 percent in a year. For these drugs, the attorney general can request manufacturer and wholesaler documentation of product cost increases, or costs associated with increased access and health benefits. If the increase is found to be unjustified, the Circuit Court may impose civil penalties of $10,000 for each violation, roll back the increase, refund to all public and private payers and consumers the excess price and extend to pre-increase drug price for all state health programs for up to one year.
The New York legislation, which passed as part of the state budget and was approved by the Governor, imposes a Medicaid prescription drug spending growth cap. When it appears the Medicaid spending cap will be breached, the Commissioner of Health may select a drug for referral to the state Drug Utilization Review Board (DURB). The DURB is given new authority to assess product value and recommend back to the Commissioner a target Medicaid supplemental rebate amount which would be in addition to the federal Medicaid minimum rebate amount.
If the Commissioner cannot negotiate a rebate for Medicaid that is at least 75 percent of the recommended target amount, the Commissioner is authorized to place the drug on Medicaid prior authorization requiring prescriber justification. It appears that these Medicaid supplemental rebates can be in addition to existing Medicaid supplemental rebate agreements. The law is not specific about how the Commissioner would select a Medicaid drug for referral to the DURB. And the Commissioner could negotiate a Medicaid supplemental rebate with the manufacturer after the manufacturer has received notice of the pending referral to the DURB. The provision is estimated to save $55 million in SFY 2017-2018 and $85 million in SFY 2018-2019.
These legislative milestones are exciting developments in states’ quest to constrain spending on prescription drugs that result from high prices. States are acting in the absence of federal action and attempting a variety of approaches. Since legislatures are still in session in a number of states where drug pricing is a topic of debate, there may be more legislation passed and enacted as these sessions wrap up. For instance, California SB 17 is moving through the State Senate. It is a price transparency bill that goes further than many other proposals and is generating a lot of interest.
NASHP is tracking legislative and executive branch state activity on prescription drug pricing and spending. And we can provide states with expert technical and policy resources to facilitate drug price policy work. Key to the effort is the NASHP state official’s Work Group on Pharmacy Costs, which is building on its 2016 work by developing model legislation and model program design for any state interested in pursuing any of a variety of concrete actions to stem rising drug prices.
Interested state officials should contact Jane Horvath for more information at email@example.com or 202-238-3337.