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.
When Rhode Island health policymakers read the U.S. Centers for Disease Control and Prevention’s Healthy People 2010 report, they realized their children’s generation could face a shorter life expectancy than their own unless they changed their approach to public health. In response, Department of Health officials doubled down on their commitment to address health disparities and improve the social factors that directly affect health, such as housing and nutrition.
At the same time, they understood they needed a new financial approach to support their growing focus on improving health and health equity and reducing obstacles such as poverty, discrimination, poor education, and unsafe environments. Their solution: braided funding from a number of sources to help realign staff, break down organizational silos, and promote cross-sector collaboration.
The department first tested its innovative, collaborative approach through integrated projects, such as bringing together staff from diabetes, obesity, and maternal and child health programs and recruiting community partners to work on a shared initiative. When those initial projects proved successful, they took stock of their funding sources and looked for opportunities to divest from disease-specific funding sources and invest instead in more community-focused funding.
“Where is the funding for doing this kind of work?” observed Ana Novais, executive director of health in Rhode Island’s Department of Health. “There is no health equity funding being given to us, but nearly every proposal or grant we receive mentions health disparities.”
Rhode Island ultimately designed a method for “braiding” together funds from several sources to support its work to improve health equity. Officials wove together federal funds from the Maternal and Child Health Bureau of the Health Resources and Services Administration, the Substance Abuse and Mental Health Services Administration, the Preventive Health and Health Services Block, and two different chronic disease grants from the U.S. Centers for Disease Control and Prevention. They combined these federal funding streams with state funds, designed their work plan to meet both the department’s health equity goals as well as the various federal grants’ requirements, and then requested proposals from community organizations to improve health equity.
Novais explained the proposal asked communities to define themselves as health equity zones and submit proposals to prevent chronic diseases, improve birth outcomes, and improve the social and environmental conditions of neighborhoods across the state. See NASHP’s In the Zone for more about Rhode Island’s work to advance health equity and community health.
Novais recently shared her expertise and experience when she chaired a session on braiding and blending funds for improved population health at the annual 2017 NASHP state health policy conference held in late October. The session, presented in partnership with the de Beaumont Foundation, also featured state officials from Louisiana, Vermont, and South Carolina. Each state uses innovative braiding or blending models to address non-clinical health needs that affect public health through programs such as supportive housing and nurse home visiting for low-income, first-time mothers.
These innovative strategies may become even more important — and more widespread — in the wake of federal proposals to create block grants and cut state public health funding. A number of state health policymakers expressed concern that the flexibility provided by block grants may not adequately compensate for cuts to already lean public health budgets. To help state health policymakers prepare for and respond to such proposed changes, NASHP, the de Beaumont Foundation, and the Association of State and Territorial Health officials recently convened a group of state health policymakers from 11 states to strategically address opportunities and challenges that may result from potential changes to the federal funding landscape.
A new NASHP report, Blending, Braiding, and Block-Granting Funds for Public Health and Prevention: Implications for States, charts a way forward for states interested in maximizing their abilities to coordinate work and resources across programs. It distils ideas from the recent meeting of state leaders and explores state responses to possible federal funding scenarios. The report also:
- Surveys historic and existing sources of block grants and disease- or condition-specific federal funding;
- Examines how states currently use those funds; and
- Poses key questions for officials to ponder in the months ahead.
In this time of rapid policy changes, it is important to learn from states working to align their funding sources to advance their population health and prevention goals. “This paper is an important and much-needed resource for state officials seeking to improve health and health equity by investing in building stronger, healthier, and more resilient communities during this time of change,” said Novais.
Presented in partnership with the de Beaumont Foundation.
As federal officials hint at overwhelming changes in how state health programs will be funded in the future, policymakers are strategizing how to reconfigure their programs to take advantage of the promised brave new world of flexibility and realigned funding. The National Academy for State Health Policy (NASHP), the de Beaumont Foundation, and the Association of State and Territorial Health Officials recently convened a small group of state health policymakers from 11 states to strategically address opportunities and challenges that may result from changes to the federal funding landscape.
The meeting produced a new paper, Blending, Braiding, and Block-Granting Funds for Public Health and Prevention: Implications for States, that charts a way forward for states interested in coordinating work and resources across programs.
“This paper is an important and much needed resource for state officials seeking to improve health and health equity by investing in building stronger, healthier, and more resilient communities during this time of change,” said Ana Novais, executive director of health at the Rhode Island Department of Health. To learn more about Rhode Island’s innovative financing to advance health and health equity, read this blog.
The 2017 annual NASHP state health policy conference also addressed braiding and blending funds for improved population health. The session, presented in partnership with the de Beaumont Foundation, featured officials from Rhode Island, Louisiana, Vermont, and South Carolina. Each state uses innovative braiding or blending models to address population health and non-clinical health needs through programs such as supportive housing and nurse home visiting for low-income first-time mothers. Read more.
Presented in partnership with the de Beaumont Foundation
PORTLAND, OR – State health officials shared wide-ranging innovations in their uphill battle against the opioid epidemic that is sweeping their states at the opening day of the National Academy for State Health Policy’s (NASHP) 30th State Health Policy Conference.
Officials explained they are experimenting with new strategies that use data, new treatment approaches, and reconfigured public safety responses to illegal drug use in a race against time as overdose deaths are expected to exceed the 63,000 recorded in 2016.
Kimberly Johnson, MD, director of the US Substance Abuse and Mental Health Services Administration’s Center for Substance Abuse Treatment, ticked off the various strategies and services that are being tried out in state incubator programs that show promise in tackling this national epidemic, including providing treatment on demand, decriminalizing illegal opioid use, creating safe drug use sites and needle exchange programs, improving diagnosis of people with opioid addiction, better use of data to identify drug use patterns in communities, and addiction treatment with medications, such as methadone, which is proven to lower relapse rates.
“The number one thing states can do,” she commented following her opening remarks Monday morning, “is to address prescribing practices among providers. But it really takes all of these strategies to stop this epidemic.”
While NASHP’s three-day conference addressed a host of state public health issues, the nation’s opioid epidemic was a frequent topic at various workshops. It remains the Achilles heel, officials noted, that exposes states’ conflicting and piecemeal public health approaches even while providing opportunities for innovation.
Ana Novais, executive director of Rhode Island’s Department of Health, highlighted her state’s effort to create a dashboard that pulls data from hospitals, police, emergency rescue workers, and providers to create an overdose reporting system. Armed with data, including the latest on fentanyl deaths and locations of overdoses, the state can launch responses that involve police, rescue workers, health care providers and community leaders.
In Ohio – where one in nine of the nation’s heroin overdoses occur — the Office of Health Transformation, led by director Greg Moody, is tackling opioid over-prescribing through a health care reform called value-based pricing that rewards Medicaid managed care providers who provide high-quality care at reasonable prices.
“We wanted to knit together strategies from different domains within state government to address the opioid crisis,” he explained to more than 200 officials who attended the session. To prevent future addictions, Ohio has spearheaded a payment innovation approach to discourage over-prescribing of opioids and reward “best-practice” painkiller prescribing in its Medicaid managed care program.
One of the quality measures Ohio uses to identify “high-value” health care providers is their opioid prescribing practice. The state examines how many opioids a provider – including dentists and orthopedic specialists — prescribe and for how long. Their prescribing practices are compared with the state average. Providers who prescribe above the average amount and duration of painkillers may not get referrals and may eventually lose financial incentives.
Pennsylvania’s approach to prevent future addictions is to provide Medicaid coverage for alternative pain management treatment, such as acupuncture and yoga.
Increasing access to medically-assisted treatment for addiction, educating providers to improve opioid prescribing practices, and building coalitions between public safety and communities to get people into treatment is daunting, officials noted. Some states are proposing to add a work requirement to their Medicaid programs, similar to what exists for adults receiving Temporary Assistance to Needy Families (TANF), which concerned some policymakers. “We want to make sure that if people are working toward recovery that they are not excluded from Medicaid eligibility,” one attendee pointed out.
Another official pointed out that lawmakers in her state wondered how much funding to invest in the naloxone program if emergency personnel keep reviving the same people after multiple overdoses.
“This is a disease,” said David Kelley, MD, chief medical officer of Pennsylvania’s Department of Human Services Office of Medical Assistance Programs, “does an emergency medical technician say, ‘you’ve had angina five times already, we won’t treat you this time?’ Addiction is a disease, we need to stop thinking how many times is enough.”
“We do have to deal with the political ramifications that people still think of addiction as a personal choice,” observed Mary McIntyre, MD, chief medical officer of Alabama’s Department of Public Health.
NASHP will be publishing many of the “State Innovations and Interventions in America’s Opioid Crisis” presentations and slides, and additional blogs in the weeks ahead at nashp.org.
- As of July 1, 2011, there were 197,248 individuals enrolled in the state’s Medicaid program, known as Medical Assistance; 135,253 of these individuals were receiving physical or behavioral health benefits through a commercial or Medicaid-only managed care organization under the state’s managed care program, RIte Care.
- Dental services are provided through a prepaid ambulatory health plan (PAHP).
- All Medicaid- eligible children or adults without third party insurance are required to enroll in managed care. Rhode Island Medicaid’s aged, blind, and disabled populations are required to enroll in either a health plan or the state’s primary care case management (PCCM) program, Connect Care Choice.
As of 2013, 116,118 individuals were eligible for Rhode Island’s Early Periodic Screening, Diagnostic and Treatment (EPSDT) benefit. According to 416 data from 2013, the state achieved an EPSDT screening ratio of 73% and a participant ratio of 57%. 49,319 children received dental services of any kind, with 43,096 receiving preventive dental services.
Last updated September 2014
|Medical Necessity||Rhode Island’s Medicaid Provider Manual defines medical necessity to mean “medical, surgical or other health services for diagnosis, cure, or treatment, including preventing deterioration of the involved physical or mental condition. Such services must be provided in the most cost effective and appropriate setting and shall not be provided solely for the convenience of the recipient or the service provider.”|
|Initiatives to Improve Access
||Performance Incentive Program
Qualifying Medicaid managed care plans in Rhode Island can receive payments through the state’s performance incentive program for achieving benchmark standards for access and quality performance measures.
For more information on this program, see the Reporting & Data Collection section.
|Reporting & Data Collection||Performance Incentive Program
Under the Rhode Island Performance Incentive Program, Medicaid managed care plans can earn payments above their capitation rates as incentives for meeting benchmark standards for quality and access performance measures. Plans are evaluated based on several HEDIS, CAHPS, and state-specific measures, such as:
|Support to Providers and Families||Support to Providers
The Rhode Island Medicaid agency operates a Healthcare Portal through which providers can access eligibility, claim status, and file exchange. The state also hosts a Provider & Partners page that contains Medical provider manuals, billing & claims information, general program information, and Medicaid forms & applications.
||CEDARR Family Centers
Rhode Island received CMS approval in 2011 to develop a Section 2703 Health Home focusing on children with special health care needs served by CEDARR Family Centers. Comprehensive Evaluation Diagnosis Assessment Referral Re-evaluation (CEDARR) centers provide a system for facilitating the assessment of and need for the provision of medically necessary services that may be available for Medicaid-eligible children based on federal EPSDT requirements. As part of the health home program, CEDARR centers will operate as a “designated provider” for health home services and will coordinate a beneficiary’s services across all health care providers.
Chronic Care Sustainability Initiative (CSI-RI)
Medicaid-eligible children born after May 1, 2000 are required to enroll in Rhode Island’s mandatory managed oral health program, RIte Smiles. The state operates this program under the authority of a Section 1115 waiver. The goals of RIte Smiles are to increase access to dental services, promote the development of good oral health behaviors, decrease the need for restorative and emergency dental care, and decrease Medicaid expenditures for oral health care.
Medicaid-eligible children born after May 1, 2000 receive dental benefits through traditional Medical Assistance.
– See more at: https://nashp.org/epsdt/Rhode-Island#sthash.LSGQOrDo.dpuf
Within multi-payer medical home initiatives, it is critical to develop and implement attribution and/or enrollment methodologies that assign participating patients to the practice most responsible for managing their care for two important reasons: the numbers of patients assigned to each practice influences the amount of supplemental PCMH payments paid to practices and which patients are assigned to the practice may affect the practice’s performance on specific cost, quality, and utilization metrics.
This brief, supported by The Commonwealth Fund, presents key considerations for states when developing assignment models: determining the degree of alignment across payers; establishing a means to collect and distribute patient assignment data; assessing the accuracy of the model; and ensuring sustainability. Key considerations presented in this brief were gleaned from challenges and lessons learned from multi-payer initiatives in Maryland, Massachusetts, Michigan, and Rhode Island.
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Join NASHP for a webinar on aligning federal and state programs and policies to support building stronger linkages between primary care and resources and services within the community, including behavioral, public health, long-term services and socio-economic supports. State leaders from Alabama and Rhode Island will describe the approaches and models being used in their states to promote the integration of primary care and community resources and the challenges and opportunities to align with federal strategies. Two federal reactors will describe opportunities for aligning federal and state approaches, including those presented by the state speakers. (Rescheduled from 10/4/13.)
Jill Rosenthal, Senior Program Director, National Academy for State Health Policy
Deidre Gifford, Medicaid Medical Director, Rhode Island Executive Office of Health and Human Services
Robert Moon, Chief Medical Officer and Deputy Commissioner, Health Systems, Alabama Medicaid
Barbara Edwards, Group Director, Center for Medicaid and CHIP Services, Centers for Medicare & Medicaid Services
Suzanne Fields, Senior Advisor to the Administrator on Health Care Financing, Substance Abuse and Mental Health Services Administration