States that control their own insurance marketplaces – called state-based marketplaces (SBMs) – are leaders in providing affordability and choice, outperforming the federal marketplace on notable markers including higher enrollment, lower premium rate hikes, more participating issuers, and successfully attracting a young consumer base. These accomplishments are especially notable given recent federal policy actions that have unsettled insurance markets and a national rise in uninsured rates.
The success of SBMs results from years of hard work spent cultivating their markets while building operational and technical systems tailored to serve their states’ consumers. Thanks to the work of these SBMs and the evolution of new technology, it is now easier (and cheaper) for states currently using the federal platform to switch and adopt the SBM model.
As new states express interest in the SBM model, they can learn much from the leaders who have pioneered implementation of this model.
Earlier this month, the National Academy for State Health Policy (NASHP) hosted a webinar with SBM leaders from Idaho, Nevada, Massachusetts, and Washington, DC to showcase some of their lessons. Highlights are featured below, and a recording and slides from the webinar are available here.
Focus on the Basics (and Avoid Scope Creep)
SBMs provide more than “shop-and-compare” websites for consumers shopping for health insurance — SBMs are dynamic business enterprises. While their main objective is to make sure that individuals have “easy access to health coverage,” SBMs must also:
- Perform a series of complicated eligibility and enrollment functions easily;
- Work with the systems of partner organizations, including carriers, Medicaid, and outreach partners; and
- Be financially sustainable.
Rather than get carried away by bells, whistles, and complex policy aspirations, SBM leaders advise that future SBMs must first focus on building a functional, sustainable system. Once a working SBM is established with a long-term financing strategy, it can always grow and evolve to perform new functions.
Prioritize the Consumer Experience
Much of an SBM’s success depends on its ability to attract and retain consumers. Over the years, SBMs have worked diligently to improve the experience of its consumers. As Massachusetts Health Connector Chief of Policy and Strategy Audrey Gasteier explained, “Marketplaces require a lot of activity on the part of a consumer,” and it is important that consumers feel empowered. Outreach is a major component of this work — from providing educational materials to in-person assistance provided by brokers, Navigators, and certified application counselors. Earned press coverage and social media are also effective tools for SBMs to quickly spread the word about their products and policy changes at low cost. Speakers also noted the importance of call centers and recommended that states equip their centers with self-service capabilities so that consumers can easily resolve common issues over the phone.
Set Clear Expectations and Timelines
Heather Korbulic, executive director of Nevada’s SBM, presented an 18-month timeline for implementation of an SBM — from passage of enabling legislation to the marketplace’s first open enrollment period. While “out-of-the box” technology and adaptable systems make it easier than ever to for a state to build an SBM leaders cautioned states not to be too aggressive in their planning and timetables. As with any large-scale project, states should anticipate delays and challenges. For example, from the start states need to work closely with federal officials from the Center Consumer Information and Insurance Oversight (CCIIO) to establish their marketplace “blueprint.” While CCIIO experts serve as an important resource for states — providing years of technical and policy expertise to help guide states — implementation of an SBM requires strict federal oversight and approvals that may cause delays that are outside of the control of a state.
Throughout the SBM implementation process, leaders emphasized the importance of maintaining transparency so that stakeholders are not deterred by unexpected delays or issues. By keeping stakeholders informed of progress and expectations, an SBM will cultivate trust and maintain relationships critical to the marketplace’s long-term success.
Relationships Are the Foundation of an SBM
Any marketplace cannot function without engagement across a mix of stakeholders, which include:
- State policymakers who will establish the marketplace;
- Federal officials who will oversee and approve its implementation;
- Insurance carriers who will sell products through the marketplace; and
- Consumers whom the marketplace will serve.
Stakeholders will have different — and sometimes conflicting — interests and it is the job of the marketplace to balance those interests in pursuit of mutual goals. Leaders underscored the importance of insurer engagement, recognizing the central role of health plans in the success of the marketplace. Establishment of an SBM will require insurers in the state to establish new business practices. A state should not underestimate the uniqueness of how each carrier operates and the time it may take for each to adapt to the new SBM system.
Establish Clear Leadership that Can Take Quick Action
A state has the flexibility to choose how to establish its SBM — either as a state agency, a non-profit, or a quasi-public-private entity. Because an SBM must be responsive to changing consumer and insurer markets and be able to readily contract with vendors to develop needed services, it is best that an SBM assume a governance structure that can enable it to act quickly. Moreover, leaders directors noted the importance of leadership to any marketplace. While operation of an SBM takes a team, it is important to have one person who is clearly designated to establish priorities, take accountability, and make decisions to get the SBM “across the finish line.”
SBMs Serve as a “Hub” for Health Reform across State Agencies.
Regardless of the specific model chosen, SBMs must be able to work across existing state agencies including Medicaid, insurance departments, and other health policy agencies. SBMs are uniquely positioned to serve consumers who range from those on the cusp of Medicaid eligibility to those accustomed to various types of commercial market coverage. To ensure smooth processes for consumers, SBMs must be able to navigate between agencies to ensure that its policies and operations are consistent with what is being promulgated by its sister agencies.
For instance, SBMs are required to generate many different types of notices to consumers, such as information related to a consumer’s eligibility for coverage programs. SBMs coordinate closely with their Medicaid agencies on the language and process for sending these notices to help reduce confusion for consumers who might otherwise receive duplicative or misaligned information from both agencies. Additionally, because SBMs serve consumers who are eligible for federal tax credits, they serve an important role in informing state and federal policymakers about how policy changes may directly impact their consumers. To serve this role, it is important that SBMs have sufficient analytic capacity to process data on their consumers and advise on the implications of changing federal and state policies.
Let SBMs Adapt Over Time
Insurance markets and marketplace consumers are not static, and SBMs must be able to adjust to changing needs and consumers. They must constantly work to engage new consumers who may be coming in and out of other coverage programs (e.g., leaving parental coverage, employer-sponsored insurance, or Medicaid), while also adapting to evolving expectations as consumers interact more and more with e-commerce and advanced technology. Through consumer surveys and testing, SBMs are constantly learning and adapting their services. One benefit of their flexible structure is that SBMs are also becoming more sophisticated and efficient in navigating this process. Some have even been able to cut operational expenses and lower the assessments they charge to carriers who sell on their exchanges, which, in turn, results in lower consumer premiums. For example, Mila Kofman, executive director of DC Health Link, estimates her SBM was able to save approximately $2 million annually by moving its data servers to a cloud-based system in 2016.
Most notably, leaders point out that each SBM has taken a unique approach in how it has operationalized its marketplace. In the process, each has learned lessons from their SBM peers — from simply sharing effective marketing strategies to full partnerships, like Massachusetts’ adoption of Washington, DC’s technology for its small business marketplace. In this spirit, speakers advised states to learn from their peers as they work through their own challenges on the road to implementing SBMs.
NASHP and the SBMs are ready and eager to help support states as they contemplate establishing their own SBMs. For additional resources about SBM models and implementation, explore NASHP’s State Exchange Resource Hub.
During NASHP’s recent state health policy conference, state insurance experts explored the dramatic changes that recent federal action has foisted on their individual health insurance markets. In a second report from this conference session, they highlight strategies they’ve used to stabilize markets and identify lingering challenges to insurance markets’ affordability and choice.
While many state insurance commissioners and Affordable Care Act (ACA) marketplace directors work in tandem with state lawmakers to develop new policies that can support and stabilize markets, several experts noted that state leaders wield significant authority to influence their own markets. For example, through insurance rate review programs, state insurance commissioners have significant influence over the cost of premiums and scope of coverage sold in the markets they regulate.
Pennsylvania, for example, requires insurers to file rates using standard rating factors (a specific percent that all insurers must use to account for cost-sharing reduction calculations). Standard rating factors help the state minimize arbitrary variability between insurers’ rates and encourages competitive pricing practices among insurers.
Panelists also noted the importance – especially this year — of investments in outreach and education to teach consumers about the varying coverage levels of insurance plans now on the market. This is especially important given the expanded availability of short-term and association health plans that may confuse consumers.
Jane Beyer, senior health policy advisor to Washington State’s insurance commissioner, suggested the development of simple tables comparing coverage options (e.g., short-term plans, health care ministries, and broader qualified health plans) as important tools to educate ACA exchange navigators and other outreach workers as they help consumers purchase policies.
States that operate their own state-based marketplaces are uniquely positioned to support their individual markets through effective marketing and innovative consumer tools to help attract consumers.
- Mila Kofman, executive director of Washington, DC’s health insurance marketplace, stressed the importance of a local approach to marketing and outreach. Beyer touted the benefits of Washington State’s new marketplace app and “Smart Planfinder” decision tool that assists consumers in making informed decisions about their coverage options.
- Kate Harris of Colorado’s marketplace explained, “People wildly underestimate what they are eligible for.” She said Colorado is constantly evolving its outreach strategy to find new approaches to expand its reach to uninsured consumers.
- Wes Trexler, Idaho’s Department of Insurance Actuary and Bureau Chief of Product Review, cited his state’s systems control and its ability to create an integrated outreach and enrollment process for its consumers as big factors to its success.
Addressing Affordability through Reinsurance and Other Reforms
Affordability remains a huge threat to stable markets, especially among consumers earning more than 400 percent of the federal poverty level (FPL) and individuals earning less than 100 percent of FPL in non-Medicaid expansion states (see more on Medicaid below), who do not qualify for federal tax credits to purchase individual market coverage. Trexler said states must address the plights of individuals who fall into coverage gaps, including individuals who cannot afford their employer plans but do not qualify for tax credits and individuals who struggle with eligibility for subsidized coverage because of variability in their income throughout the year. As insurance rates rise, these individuals are increasingly priced out of the market and opt for no insurance coverage.
State-based reinsurance programs, instituted through 1332 state innovation waivers, have been successfully leveraged by some states to help reduce premium costs. A state’s reinsurance program pays insurers that take on higher-costs, enabling those insurers to lower their insurance premiums. The payments are funded through a combination of state funds and federal savings achieved from lower tax credit payments paid to subsidize the premiums of coverage sold through the state’s health insurance marketplace.
However, panelists raised concerns about the high costs of implementing state reinsurance programs, the sustainability of these programs, and the political challenge of getting legislation passed to submit a 1332 waiver. Some state officials expressed support for a federally-funded reinsurance program, which could help stabilize state markets and lower federal spending on tax credits.
States, faced with the prospects of market erosion from the emergence of short-term and association health plans, are contemplating options that will balance affordability with the need to keep a robust risk pool that includes healthy and sick; young and old. They are looking into other creative solutions to offer more affordable plans to their consumers.
Colorado recently passed legislation to support a study to use a 1332 waiver to allow for the sale of catastrophic health plans to individuals older than 30. Catastrophic health plans have low premiums, yet high out-of-pocket costs to consumers. Under the ACA, they are only available to individuals under age 30. By adding these plans to its individual market, Colorado plans to offer more affordable options to consumers. The law stipulates that catastrophic plans must be sold through the state’s health insurance marketplace and that Colorado would only pursue the waiver if the study finds that the expansion of catastrophic plans would not lead to overall premium increases OR decreases in tax credits received by consumers.
Under an executive order, Idaho is exploring granting greater flexibility to insurance carriers to sell products that do not comply with federal requirements under the ACA, but would be part of the individual market risk pool. Specifically, these plans would:
- Not meet pre-existing condition protections,
- Allow for a 5-to-1 age rating ratio, meaning that insurers can charge older enrollees up to five times as much for coverage as younger enrollees (the ACA sets this cap at a lower 3-to-1 ratio);
- Allow for annual coverage limits of no less than $1 million; and
- Allow year-round enrollment and not limit enrollment to special time periods).
As envisioned by Idaho’s Department of Insurance, these insurance products, called “state-based plans,” would complement ACA-compliant products. They would bring consumers into the state’s individual market, help to stabilize the risk pool, and force any insurer that sold a state-based plan to also sell a fully ACA-compliant product through the state’s insurance marketplace, thus encouraging product competition through the marketplace.
The Centers for Medicare & Medicaid Services (CMS) rejected the proposal, due to non-compliance with federal law. However, Idaho is continuing conversations with CMS to develop federally-compliant solution for its market.
During the conference session, state officials described a slew of other proposals they plan to explore to help stabilize their markets, including:
- Merging individual and small group markets;
- Forging stronger links between ACA-compliant qualified health plans and public programs (see Washington’s public-employee law described below);
- Providing state-funded subsidies for insurance in addition to federal tax credits; and
- Working with insurers to create more efficient plan design (e.g., changing benefit and network requirements).
Several panelists said it was important to ensure that future solutions do not undercut their individual markets — as new federal policies promoting market segmentation do (e.g., promulgation of short-term plans and health care ministries). Several states have explored implementing a state-based insurance mandate to help ensure that consumers continue to participate in their insurance markets to help stabilize their risk pools for all.
Washington, DC’s new mandate , for example, is modeled closely after the federal mandate, though it made small changes, such as including an automatic exemption for those eligible for Medicaid based on their income even if they were not currently enrolled in Medicaid. Under federal law, these individuals had to actively pursue an exemption, and would often not apply on time if at all. Money collected from the mandate will be used to fund additional affordability programs and coverage outreach initiatives. Washington State leveraged its state purchasing power to require that any insurer offering school or state employee coverage must also offer individual market plans in those counties through the state’s health insurance marketplace.
Medicaid’s Bearing on Individual Market Costs
A few panelists cited the positive effect that states’ decisions to expand Medicaid have had on their individual markets. In Medicaid expansion states, Medicaid eligibility is raised to 133 percent of FPL, meaning that individuals earning between 100 to 133 percent of FPL — who would otherwise be eligible for subsidies for private coverage through the health insurance marketplaces — are enrolled in Medicaid coverage. Studies indicate that Medicaid expansion states have better individual market risk scores than those that have not expanded coverage, suggesting that populations at lower-income thresholds are in poorer health than those at higher-income levels. This suggests that the individual market risk pool in expansion states is healthier, leading to lower overall costs in those markets.
Building on this concept, Idaho, a non-expansion state, explored a dual waiver program in which it would use an 1115 Medicaid waiver and a 1332 state innovation waiver to allow individuals earning below 100 percent of FPL to receive subsidies for coverage through its health insurance marketplace, while enrolling individual earning between zero to 400 percent of FPL with complex medical needs in Medicaid. The program would have enabled more individuals to access coverage, while lowering premiums for marketplace enrollees by taking those with unhealthy risk out of the individual market risk pool.
The proposal was ultimately rejected by Idaho’s state legislature in part due to concerns over costs to the state’s Medicaid program. However, supporters of expansion in Idaho have secured a ballot initiative so residents can vote on whether the state should expand Medicaid in November. Similar initiatives will also be on the ballot in Nebraska and Utah.
Future State Solutions
Challenges remain for states pursuing stabilization strategies. Several officials expressed hope the federal government would refrain from new actions that could de-stabilize markets or reduce state authority over markets, such as restricting state decisions on “silver-loading” to account for CSR losses. Some also expressed a desire for greater flexibility over 1332 waivers that could ease states’ ability to apply for waivers or allow more state experimentation. .
This remains a unique time for states, observed Washington, DC’s Mila Kofman, with consumer groups, insurers, and state policymakers united in their goal to enact policies that create more stable and affordable insurance markets.
NASHP will continue to closely monitor state strategies and report on their efforts to create stable and affordable markets.
State health policymakers are eagerly waiting to see if Congress’ omnibus budget bill released this week will attempt to stabilize Affordable Care Act (ACA) insurance markets by reinstating ACA’s cost-sharing reduction (CSR) payments. An early proposal by US Sen. Lamar Alexander would fund the cost-sharing subsidies, which reduce a family’s out-of-pocket health care costs, retroactively from 2017 through 2021.
While this is a potential solution to how the federal government can subsidize health insurance for some consumers who purchase insurance through ACA markets, data collected by the National Academy for State Health Policy (NASHP) illustrates the complex interplay between marketplace subsidies and consumer decisions that states face.
States and insurers demonstrated incredible dexterity in quickly redesigning insurance plans in response to the Administration’s late-in-the-game decision to end CSR payments in October 2017. The result was that consumers faced new confusion as insurance plans were revamped and repriced in 2018, resulting in major enrollment shifts both off and within health insurance marketplaces. Below, NASHP presents 2018 enrollment data collected by state-based marketplaces (SBMs), which closely manage their own exchanges, highlight how state actions to address the loss of CSR funding influenced market decisions in 2018. Key findings indicate:
- Decreased enrollment in marketplace silver plans, especially among consumers who no longer had access to CSR subsidies and who did not qualify for tax credits;
- Enrollment growth in marketplace bronze plans;
- Mixed enrollment growth or declines in gold plans; and
- Mixed growth, and some declines in the total number of subsidized enrollees in the marketplaces.
The findings do not provide a complete picture of what has occurred in markets nationwide, as the data represent only 10 states and do not include complete information about off-marketplace enrollment patterns or full consideration of other factors that may have influenced enrollment during the 2018 enrollment period, including shortened enrollment periods and other factors influencing premium costs. However, they provide a glimpse into how states’ markets reacted to federal policy shifts and the serious ramifications of CSR changes wrought by Washington on consumer purchasing behaviors.
Under the CSR program, insurers are required by federal law to cover certain out-of-pocket expenses (e.g., deductibles, copayments, coinsurance) for enrollees with incomes below 250 percent of the federal poverty level (FPL). CSRs are only available through silver-level health plans purchased on the state or federal health insurance marketplaces. Typically, silver-level plans have an actuarial value (AV) of 70 percent, meaning that the plan must cover in aggregate at least 70 percent of the health care costs received under the plan. CSRs change the AV of plans by varying amounts depending on the income of the qualifying consumer (see Table 1).
|Table 1. Qualifying for CSRs|
|To qualify for the ACA’s CSR program, consumers must purchase silver-level health plans and have incomes between 100 to 250 percent of FPL, which in 2018 ranged from $16,642 to $30,150 for individuals and from $33,948 to $61,500 for a family of four.|
|CSR-Eligible Plan||Standard Silver||Silver 73||Silver 87||Silver 94|
|Income||Any||200-250% FPL||150-200% FPL||100-150% FPL|
The ACA designed the CSR program so that insurers would be reimbursed for expenditures incurred under the program, and would be paid back whatever costs were charged to ensure that consumers who received services were only paying out-of-pocket expenses in line with the AV of their CSR-eligible health plan.
Questions about the exact language of the CSR law spurred litigation over whether it was legal for the government to issue reimbursements without an explicit appropriation for the program. Pending the outcome of this litigation, the Administration stopped issuing CSR reimbursements.
Response to Elimination of Federal CSR Reimbursements
After the Administration stopped CSR payments last October, most state regulators directed their insurance carriers to adjust their 2018 premium rates to account for CSR losses. Not responding to the issue would have left insurers exposed to the lost federal funding, possibly resulting in insurers opting to not participate in markets. As CSR payments most directly affected silver-level plans sold on the marketplaces, most states and carriers opted to load premium increases onto silver-level plans offered through their insurance marketplaces. The Congressional Budget Office (CBO) estimated that silver plan premiums increased by 10 percent on average in 2018 in response to elimination of CSR funding. Among the states that operate their own marketplaces, only three did not load the increases onto their silver plans. These included:
- Colorado, which advised its insurers to distribute premium increases across all metal levels to mitigate the effect on silver-level plans;
- Vermont, which similarly distributed premium increases across all metal levels due to uncertainty over the effects of the changes on its uniquely-merged individual and small group markets; and
- Washington, D.C., which calculated that elimination of the CSR payments would have minimal effect on its market due to low enrollment of CSR-eligible individuals.
CSR Loading Had Differing Impacts on Subsidized and Non-subsidized Consumers
Silver-loaded premiums shifted the affordability and value of plans offered through marketplaces, distorting costs and participation in the markets. For consumers who were eligible for premium tax credits to subsidize their coverage (82 percent of marketplace consumers in 2017), some coverage options became even more affordable. This is because the tax credit is calculated based on the second-lowest-cost silver plan available to a consumer. As a result, as silver premium costs increased in response to CSR elimination, so did the total amount of tax credit a qualifying consumer could receive. This increase in tax credits — combined with more marginal increases in premiums for bronze- and gold-level plans than for silver plans — meant that both bronze and gold plans became more affordable for these consumers. Availability of these more affordable plans may have attributed to the enrollment increases seen in some states’ marketplaces.
While the silver-loading strategy served the important purpose of insulating lower-income consumers from CSR losses, it resulted in increases costs for consumers who were ineligible for tax credits. The increased premiums escalated affordability concerns and forced many of these consumers to seek cheaper options, either by enrolling in lower-value bronze plans or by disenrolling from marketplace coverage entirely. These changes had important repercussions for both consumers and insurers participating in the markets.
- Distorted market competition and enrollment. CSR payment elimination had disproportionate effects on marketplace insurers as they adjusted premium rates differently based on the proportion of CSR-eligible consumers enrolled in their plans. Insurers with a greater proportion of CSR-eligible individuals increased premiums by a higher amount than those with fewer CSR-eligible enrollees. In California, for example, CSR-induced premium rate increases ranged from 8 percent to as much as 27 percent. This lead to a distortion of premium prices between insurers and generated shifts in market share as consumers switched to insurers whose plans had smaller premium growth.
- Increased consumer susceptibility to out-of-pocket spending. The lower-cost bronze plans, which offer less coverage, enticed more consumers to purchase them. While this lowered consumers’ annual spending on premiums, the lower AV of bronze plans means that these consumers are at greater risk of higher out-of-pocket spending. This is especially true for consumers who were once CSR-eligible but switched from silver to bronze plans without considering the resulting out-of-pocket costs.
- Complete disenrollment from individual market coverage. While the total impact of CSR changes on enrollment cannot be known without additional data about off-marketplace enrollment, it is highly probable that premium increases and confusion over the changes in premium costs spurred some non-subsidized consumers to drop insurance coverage altogether. These drops in coverage led to altered market risk pools and premium increases.
Consumers Shifted Purchasing Patterns in 2018
While it is not possible to determine the absolute effect of CSR elimination on consumers’ behavior, initial data collected by the 10 SBM states indicate that state and insurer decisions to silver-load influenced consumers’ choices in 2018. Key patterns that emerged include:
- Disenrollment in silver-level health plans, especially among unsubsidized consumers: While the majority of consumers from these states continued to select silver-level health plans, there was an almost a universal drop in the proportion of enrollees selecting silver-level plans (exceptions include Colorado and Vermont, which did not silver-load, and Minnesota, whose Basic Health Program for consumers earning up to 200 percent FPL offset the effect of CSR losses.) As expected, shifts away from silver plan selections were more common among individuals who did not receive tax credits.
- Growth in enrollment in bronze plans: There was almost universal growth across all states in the proportion of enrollees who selected bronze plans, with the exception of Minnesota and Vermont, which only saw marginal reduction in bronze plan selections.
- Varied growth or disenrollment in gold plans: Changes in gold selections vary across states, from Colorado where the proportion of gold enrollments dropped by nearly one-third to Maryland where gold enrollments increased nearly four-fold.
Different trends in enrollment among subsidized and unsubsidized consumers in these states indicate that CSR policies did not by themselves drive shifts in enrollment. It is also likely that the total effect of the CSR issue varied greatly across all states, depending on several factors including:
- The proportion of unsubsidized marketplace consumers in the state — especially those enrolled in silver plans who were most susceptible to silver-loaded premiums; and
- Baseline premium prices of bronze or gold alternatives for consumers seeking to shift away from silver plans.
Investments in education and outreach also affected how consumers responded to CSR-loading in various states. The Massachusetts’ Health Connector, for example, was among several states that took extensive steps to urge its unsubsidized silver-plan enrollees to seek more affordable options either on or outside the marketplace. Connector officials reported that they were successful in moving 82 percent of affected enrollees into new coverage plans. This meant that 18 percent of unsubsidized consumers remained in silver plans, despite its aggressive outreach efforts to inform consumers about the availability of more affordable options.
Outlook for States and Markets Pending Federal Action
While this information provides a snapshot of enrollment patterns in 2018 from 10 states, it indicates that responses to the CSR funding elimination had diverse effects on states’ markets and consumers. Similarly, if CSR funding is reinstated, the effect will reverberate differently across states’ markets and consumers. Significant changes could mean another year of disruption for insurers, who will need to adapt products and rates based on shifting federal policy, and consumers, who may need to once again actively shop around and switch plans next year. The CBO estimates that 500,000 to 1 million consumers would become uninsured from 2020 to 2021 if CSR funding was reinstated. These would mostly impact consumers with incomes between 200 to 400 percent FPL who would no longer would benefit from tax credits, which are larger than CSR subsidies.
While states and insurers rapidly responded to the Administration’s decision to end the CSR program in 2017, an absence of clear policies and continuous last-minute changes will spur unrest in markets. Without sustainable policies to stabilize the individual market, consumers will face higher costs, confusion, and anxiety about whether insurance coverage will be available when they need it.
While CSR funding remains a concern to some states, states are also seeking solutions that could bring immediate stability to markets, such as federal reinsurance funding. Whatever policies are implemented this spring, time is of the essence as state regulators are already in active negotiations with their insurers for 2019 offerings, with rate filings expected in some states as early as May. Ideally, future federal policies will grant states sufficient time and flexibility to respond to policy changes in a manner most appropriate for their markets.
Click here to view a chart comparing marketplace enrollment by metal level in California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Minnesota, Rhode Island, Vermont and Washington State.
Many states use innovative approaches in their Children’s Health Insurance Program (CHIP) and Medicaid programs to improve the quality of pediatric care and preventive services. With support from the Health Resources and Services Administration (HRSA) under the Alliance for Innovation on Maternal and Child Health, NASHP has developed several case studies that highlight successful initiatives designed to improve the health of children and adolescents.
- Idaho’s Preventive Health Assistance (PHA) program uses incentives that target Medicaid and CHIP beneficiaries to promote healthy behaviors and encourage parents to help children and adolescents adopt healthy lifestyle changes.
- Tennessee has a pay-for-performance program that rewards improvement on Healthcare Effectiveness Data and Information Set (HEDIS) quality measures for pediatric preventive services.
- Minnesota and Oregon use innovative measures at the provider and health plan level to track rates of adolescent depression screening and to measure and incentivize follow-up treatment for adolescents with depression.
- To learn about more programs, see the NASHP map and chart: State Strategies for Promoting Children’s Preventive Services.
Uncertainty about the future of health insurance options and concern about the ability of Affordable Care Act (ACA) marketplaces to offer adequate competition and choice have spurred states to look for new coverage approaches. Among the innovative strategies states are proposing are allowing consumers to buy into state Medicaid programs and developing state-specific coverage options within the ACA’s framework.
State Medicaid Buy-In Proposals
A new strategy some states are examining is to allow individuals who are not currently eligible for Medicaid to buy into the program. Cindy Mann of Manatt Health recently explored this proposal at a session at NASHP’s annual health care policy conference. She outlined some of the key issues that states need to consider to implement this approach.
One approach allows states to offer Medicaid as a new “public option” product in their ACA marketplaces, which could help increase affordability and consumer choice, particularly in areas where there are a limited number of participating plans. To be offered on the marketplace, a Medicaid plan would need to match marketplace coverage standards and be certified as a qualified health plan. Some session attendees wondered if a state could “deem” a Medicaid plan as qualified, particularly in bare counties where no insurance product was available.
Another way states could leverage Medicaid to expand coverage would be to permit individuals with incomes above current Medicaid eligibility levels to buy into the program. States could choose to offer this Medicaid buy-in to consumers either with or without subsidies. However, if they offered subsidies, states would need to seek federal approval through a 1332 Waiver or obtain a Basic Health Program (BHP) state plan amendment. Also, in order for the Medicaid plan to be affordable, the benefit package may need to be less robust than traditional Medicaid benefits.
Both strategies would require state Medicaid and insurance agencies to coordinate closely. Key advantages of Medicaid buy-in proposals include:
- The statewide nature of Medicaid’s provider networks;
- The reach of the program overall; and
- States would have the flexibility to set plan rates.
Potential disadvantages include:
- Medicaid’s lower provider reimbursement rates could diminish provider participation; and
- In some states, it may not be politically feasible to broaden the scope of Medicaid, even if individuals are required to pay premiums for coverage.
State and Federal Action on Medicaid Buy-in
Some states have already moved forward on these concepts . In early 2017, Nevada state Rep. Mike Sprinkle introduced and the state Legislature passed AB 374, which offered a public option on the marketplace. The bill directed the state to contract with insurers to provide a commercial health plan based on Medicaid (though without non-emergency medical transportation coverage), and allow eligible individuals to use ACA’s tax credits to purchase this coverage. While the proposal may have required both a 1332 and a Section 1115 Medicaid waivers, the bill was ultimately vetoed by the governor. If re-elected, Sprinkle indicated he will reintroduce the proposal.
In Minnesota, a bill was introduced in January 2017 that would have allowed individuals with incomes above 200 percent of the federal poverty level (FPL) to purchase coverage through MinnesotaCare, the state’s BHP, and they would have received a tax credit subsidy if eligible. The bill did not move forward in the state Legislature.
In Massachusetts, a provision in a recent bill that passed the state Senate in November proposes to allow any individual to purchase coverage through the state’s Medicaid program.
On the federal level, Sen. Brian Schatz (D-HI) and Rep. Ben Ray Lujan (D-NM) in October introduced the State Public Option Act in the Senate and the House, which would allow states to create a Medicaid buy-in program for all residents earning any income level who are not currently eligible for the program.
Idaho’s Health Care Plan
Idaho did not implement the ACA’s Medicaid expansion, but the state has held many meetings since passage of the ACA to explore alternative options to provide coverage to low-income individuals. Most recently, and as discussed at a NASHP conference session, the Governor’s Health Care Advisory Panel has proposed the Idaho Health Care Plan, designed to both stabilize the individual insurance market and offer coverage to some uninsured individuals.
Specifically, one aspect of the plan permits working individuals with taxable income below 100 percent of FPL to purchase subsidized marketplace coverage. The state estimates that 22,000 of the 78,000 uninsured residents with incomes under 100 percent of FPL would be able to purchase coverage.
The other component of Idaho’s proposal creates a new Medicaid Complex Medical Needs program that allows adults and children with certain complex health conditions with incomes up to 400 percent of FPL to be covered by Medicaid. Individuals would qualify if they were not eligible for Medicaid and did not have access to affordable employer coverage.
The state anticipates that moving individuals with high-cost care needs to Medicaid could reduce premiums in the marketplace and would offer these individuals more comprehensive coverage to meet their needs. The draft waiver indicates that the program would cover individuals in need of ongoing medical support for genetic conditions such as hemophilia or cystic fibrosis as well as individuals with end–of-life care needs. Most enrollees with incomes above 150 percent of FPL would be required to pay premiums for this coverage based on a sliding scale.
The two-pronged plan would require federal approval through both a 1332 waiver and a Section 1115 Medicaid waiver. The state held public hearings in December 2017 and is seeking public comments through Dec. 15, 2017. Idaho’s goal is to implement the plan in mid-2018.
Also in 2018, while there may be new efforts in Congress to modify or repeal the ACA, some states are likely to continue to pursue their own options to provide health coverage to residents. NASHP will continue to monitor and share information about these emerging state health policy proposals.
- There were a total of 230,725 beneficiaries enrolled in Idaho Medicaid as of July 2011, 100% of whom were enrolled in Healthy Connections, Idaho’s mandatory Primary Care Case Management Program. Physical Medicaid services are delivered through Healthy Connections.
- While inpatient and outpatient behavioral health services have been covered under Healthy Connections, on September 1, 2013 the state implemented the Idaho Behavioral Health Plan. Under the plan, outpatient behavioral health services are offered through a capitated behavioral health organization, Optum Idaho.
- Idaho provides dental benefits and transportation through Prepaid Ambulatory Health Plans. Dental services are offered through a program called Idaho Smiles, which is administered by a partnership between Blue Cross of Idaho and DentaQuest.
- Idaho provides basic EPSDT services to children on a fee-for-service basis and delivers behavioral health services through its EPSDT Service Coordination (ESC) program and home and community-based services through its Children’s Developmental Disabilities Services Program. Idaho also has an approved Section 2703 Health Home State Plan Amendment to provide Health Home services to Medicaid participants with chronic conditions.
Last updated May 2014
According to regulations in Idaho,
“A service is medically necessary if:
Idaho requires prior authorization for the following list of services:
|Initiatives to Improve Access
|Reporting & Data Collection||
Idaho Medicaid has reporting requirements for two of its initiatives: the Idaho Medical Home Collaborative multi-payer pilot and its ACA Section 2703 State Plan Amendment. Practices participating in the Medical Home Collaborative must achieve National Committee for Quality Assurance (NCQA) PCMH recognition and report on measures in three categories: clinical measures, including chronic disease outcome measures and preventive measures; practice transformation; and patient and provider/staff satisfaction.
Idaho Medicaid is using claims and chart-based process and outcome measures as endorsed by the National Quality Forum to track progress on six goals for the state’s health home program. Two of these are specific to children:
One of the qualifying Medicaid populations for Idaho’s ACA Section 2703 State Plan Amendment is pediatric patients with serious and persistent mental illness or serious emotional disturbance. Additionally, Idaho has the EPSDT Service Coordination Program (ESC) to help children with at least one of the following: a developmental delay or disability, special healthcare needs, or a severe emotional disorder. The ESC Service Coordinators help families with children who have special needs find and coordinate services their children need, such as health, educational, early intervention, advocacy and social services.
Idaho also offers Case Management services through its Children’s Developmental Disabilities Services Program. Services offered through this program include:
|Support to Providers and Families||
Support to Providers
Idaho Medicaid maintains a page for providers that includes links to forms, including the EPSDT Request for Additional Services. The provider page also has information on school-based services.
Support to Families
The Children’s Developmental Disabilities Services Program has an option that allows for Family-Directed Services. This option allows parents to choose, design, and direct services outside of the traditional menu of services within set parameters. It also allows families to hire (or act as) a support broker to develop and manage services. Additionally, a Fiscal Employer Agent is brought in to assist with and handle financial considerations. The ESC program also provides a number of services to assist families. These include:
Idaho also has a 2-1-1 CareLine to provide statewide community information and referral service.
Care coordination across settings, including referral and transition management is considered a “critical element” for the practices participating in the Idaho Medical Home Collaborative. Additionally, Idaho’s Section 2703 State Plan Amendment states that health home providers, “identify and lead the team based care coordination approach between the clinic and specialist so the whole person’s care is taken into account in both chronic disease and mental health treatment.” Finally a key role of the EPSDT Service Coordinators in the ESC Program is coordination of services such as health, educational, early intervention, advocacy and social services.
The national IMPaCT project supported North Carolina as one of four leading states in the field of practice transformation and primary care extension. Through IMPaCT, North Carolina partnered with four other states (Idaho, Maryland, Montana, West Virginia) to disseminate its primary care practice transformation strategies. Together these states formed the North Carolina IMPaCT Learning Community, and each state received individual and group technical assistance to help implement a practice transformation initiative. North Carolina, meanwhile, is completing its own IMPaCT project with a focus on further improvements to its primary care transformation model. Participants on this webinar will hear from the states in the Learning Community. Idaho will present on how it used the technical assistance offered through the project to devise a plan for primary care transformation that would become the basis of its State Innovation Model Design award. The other three states in the Learning Community will react to Idaho’s presentation and recount how the NC IMPaCT project promoted their development in key areas of data infrastructure, stakeholder engagement, and practice support. Participants will also hear from North Carolina on its IMPaCT practice support improvements. At the end of the webinar participants will have the opportunity to ask questions of the speakers about their experiences with primary care transformation.
- Denise Chuckovich, Deputy Director, Idaho Department of Health and Welfare
- Jonathan Griffin, MD, Family Physician, St. Peter’s Medical Group
- Nancy Sullivan, Assistant to the Cabinet Secretary, West Virginia Department of Health and Human Resources
- Niharika Khanna, MD, Associate Professor, University of Maryland School of Medicine
- Darren DeWalt, MD, Associate Professor of Medicine, University of North Carolina – Chapel Hill
|Click for the Slide Deck||4 MB|
By Larry Hinkle
Many states are testing primary care extension as a strategy for supporting continuous quality improvement in practice. Primary care extension is based on the model of the Agricultural Extension Service. In health care this model applies scientific research and new knowledge to practices through provider education – often led by other providers or specially trained practice facilitators.
Program Type: Idaho operates a combination CHIP program, called Idaho Health Plan.
Number of Children Covered: In FY2013, 45,399 children were covered by Idaho Health Plan.*
State’s Enhanced Federal Match Rate: For FY2014, the federal match is 80.15%, and for FY2015 it is 80.23%.
*Data from Medicaid and CHIP Payment and Access Commission March 2014 MACStats report.
The Children’s Health Insurance Program (CHIP) was created in 1997 to provide quality health coverage for children under 19 in families that earned too much to qualify for Medicaid but were unable to afford coverage in the private market. Each state has the option to cover its CHIP population under its Medicaid program, design and structure a separate CHIP program, or establish a combination program using both options.
The Children’s Health Insurance Program Reauthorization Act (CHIPRA) of 2009 strengthened the program through increased federal funding, new outreach and enrollment opportunities, mental health parity, the requirement to cover dental care, and other provisions. In 2010, the Affordable Care Act (ACA) extended CHIP funding through federal fiscal year 2015 and required states to maintain Medicaid and CHIP eligibility levels and processes for children through 2019.1
Participation Rate: 85.1% of eligible children in Idaho participated in either Medicaid or Idaho Health Plan in 2011, the last year for which we have national data. The national average was 87.2% in 2011.2
Eligibility Levels: States establish CHIP eligibility levels within federal rules. Under the ACA’s maintenance of effort requirement, they must maintain CHIP eligibility levels they had in place when ACA was enacted until September 30, 2019. Beginning in 2014, eligibility levels for CHIP were revised based on Modified Adjusted Gross Income (MAGI).
|Modified Adjusted Gross Income (MAGI) Eligibility Levels for CHIP in Idaho (by Age Group) in 2014|
|Ages 0 – 1||Ages 1 – 5||Ages 6 – 18|
|Medicaid Expansion||N/A||N/A||108-133% FPL|
|Separate CHIP Program||142-185% FPL||142-185% FPL||134-185% FPL|
Notes: Under ACA, states must cover all children with incomes up to 133% FPL in Medicaid, but if they had been covered in CHIP (Title XXI) prior to 2014, the state still receives the Title XXI match.Eligibility levels do not include the mandatory 5% income disregard. Medicaid expansion program data from CMS staff; separate CHIP program data from CMS eligibility table.
Benefit Package: States that operate Medicaid expansion CHIP programs must follow Medicaid rules, including providing all Medicaid covered benefits to enrolled children. In separate CHIP programs, states have substantial flexibility in designing CHIP benefit packages within broad federal guidelines. In addition to general medical and dental benefits, other benefits offered in Idaho’s CHIP program include (but are not necessarily limited to):
Delivery System: The provider network in Idaho Health Plan is the same as Medicaid. All children are enrolled in primary care case management.
Premiums & Cost Sharing: Within federal parameters, states can set CHIP program premium and cost sharing levels. In total, any family contribution to the cost of coverage cannot exceed five percent of family income.
Premiums & Cost Sharing: Within federal parameters, states can set CHIP program premium and cost sharing levels. In total, any family contribution to the cost of coverage cannot exceed five percent of family income.
|Premiums and Selected Cost Sharing in Idaho Health Plan, 2013|
|Family Income Level||Premiums||Office Visits||Inpatient Services||Prescription Drugs|
Note: MAGI-adjusted income levels for premiums and cost sharing were not available at the time of publication.
Efforts to Simplify Enrollment and Renewals: CHIPRA established a five-year incentive program to support state efforts to simplify enrollment and renewal of eligible children in Medicaid and CHIP.3 From FY2009 – FY2013, Idaho received a total of $8,183,619 in incentive payments.4
|Enrollment and Renewal Strategies Implemented in Idaho, as of December 2013|
|Elimination of in-person interview*||
|Use of presumptive eligibility|
|Elimination of asset test*||✓||Use of 12-month continuous eligibility||
|Use of joint application and renewal forms*||✓||
|Use of express lane eligibility|
*ACA requires states to implement this strategy beginning January 2014. For definitions of strategies in this chart, see the Centers for Medicare and Medicaid Services December 2009 State Health Official letter.
Other Program Characteristics: Below are some other key program characteristics of Idaho Health Plan.
|Require a waiting period?5||No (as of 1/14/14)6|
|Offer a buy-in option?7||No|
|Cover dependents of public employees?8||No|
|Cover lawfully residing children without a five-year waiting period?9||No|
Quality Measures: States may report on a “core set” of quality measures for children. Idaho reported on 10 measures for federal fiscal year 2012. Among the measures is access to primary care providers, listed below.
|Percentage of Children and Adolescents Visiting a Primary Care Provider, by Age (FFY 2012)|
25 months – 6 years
Source: Department of Health and Human Services, 2013 Annual Report on the Quality of Care for Children in Medicaid and CHIP, September 2013. The measure is for the percentage of children ages 12 to 24 months and 25 months to 6 years receiving a visit to a primary care provider within the past year; and every two years for children ages 7 to 11 years and 12 to 19 years. Note: These data include both Medicaid and CHIP.
1 Information in this fact sheet has been verified by the state.
2 Genevieve Kenney et al., Medicaid/CHIP Participation Rates Among Children: An Update. September 2013.
3 To qualify for incentive payments each fiscal year, states had to implement at least 5 out of 8 specified strategies and increase child enrollment in Medicaid above a state-specific target level.
4 InsureKidsNow.gov. “CHIPRA Performance Bonuses: A History (FY 2009 – FY 2013).”
5 States may implement waiting periods up to 90 days in CHIP. A waiting period is the length of time a child must be uninsured before s/he can enroll in CHIP.
6 Information on waiting periods verified by state. Prior to January 2014, Idaho Health Plan had a six-month waiting period.
7 States can allow families with incomes above the upper income eligibility limit to pay the full cost to purchase coverage for their uninsured children through CHIP.
8 CHIPRA provided states the option to cover the income-eligible dependents of state employees under CHIP.
9 CHIPRA provided states the option to remove the five-year waiting period for lawfully residing children.