An Alarming Rate of Coverage Losses
Early data on Medicaid “unwinding” shows an alarming rate of coverage losses for enrollees who may still be eligible. Colorado and Texas join 17 other states in acting to protect health plan consumers from harmful copay accumulators.
Three more states act to protect consumers from harmful copay accumulators
Legislation ensuring health plan consumers have access to the lifeline that third-party copay assistance provides was signed this quarter by governors in Colorado (S.B. 195), New Mexico (S.B. 51), and Texas (H.B. 999), along with the mayor of the District of Columbia (B.141).
The latest victories bring to 19 the number of states (along with D.C. and Puerto Rico) that now ban copay accumulator adjusters (CAAPs) for state-regulated plans (although for seven states including Colorado and Washington that prohibition only applies for drugs with no generic alternatives). According to Avalare Health, nearly 20 percent of consumers in commercial health plans nationwide will now benefit from these protections starting in 2024.
CAAP bills remain pending this year in several states including Massachusetts, Michigan, Ohio, Pennsylvania, and Wisconsin. The California Assembly did not hold a hearing this year on their CAAP legislation (A.B. 874) but it is a “two-year bill” that may be considered in 2024. Similar bills cleared at least one chamber in Missouri and Rhode Island before being tabled for the year.
Medicaid “unwinding” data confirms most enrollees losing coverage may still be eligible
According to the KFF Medicaid Enrollment and Unwinding Tracker, more than 1.5 million Medicaid enrollees across 26 states (and the District of Columbia) have already lost coverage since states were allowed to resume Medicaid redeterminations on April 1st (see State of the States, Spring 2023).
From the outset of the “unwinding”, HFA and coalition partners have expressed strong concerns about projections from KFF, the Urban Institute, and the Congressional Budget Office that as many as seven million of the roughly 16 million Medicaid enrollees predicted to lose coverage will be wrongly terminated for “procedural” (paperwork) reasons despite still being eligible. This includes enrollees who failed to update their contact information with Medicaid or otherwise did not respond promptly to verification requests from Medicaid.
HFA and others have warned about the risk and harm of treatment disruptions when Medicaid enrollees unexpectedly lose coverage despite still being eligible. In many cases, it could take eligible enrollees weeks or months to reinstate Medicaid coverage through understaffed state bureaucracies that are overwhelmed with an unprecedented amount of appeal requests.
Those concerns appear to have been validated as KFF found that nearly 75 percent of the 1.5 million Medicaid enrollees already losing coverage were terminated solely for “procedural” reasons without verifying whether they are still eligible. Even more alarming for consumer advocates are documented cases in several states (such as Arkansas, Connecticut, and Florida) where Medicaid enrollees say they are not receiving any advance notice of termination, and only learned they have been disenrolled after seeking treatment from their medical provider.
There is wide variation in rates of procedural disenrollments across reporting states, ranging from 87-95 percent in Connecticut, Kansas, and South Carolina to only 15 percent in Alaska and 28-35 percent in Iowa, Colorado, and Pennsylvania. While some of this disparity can be explained by differing state approaches regarding which enrollee populations to initially target (as well as limited staff or data system capacity), much can be attributed to states simply attempting to “rush” through the process in far less than the full 12-14 month grace period allocated by the federal Centers for Medicare and Medicaid Services (CMS). For example, Arkansas is attempting to complete all Medicaid redeterminations within six months and already terminated about ten percent of its entire Medicaid caseload in the first two months.
Early guidance issued by CMS had urged states to process no more than one-ninth of their entire caseload per month and required they make several attempts to contact Medicaid enrollees (through multiple modalities such as mail, phone and text messages) before terminating coverage. CMS threatened to impose financial penalties and/or suspend redeterminations in states that failed to comply (including fines of up to $100,000 per day or cutting a state’s federal matching funds).
HFA has joined with consumer advocates nationwide in urging CMS to exercise their authority to impose these penalties or pause redeterminations in states with the highest rates of “procedural” terminations. However, CMS officials have so far elected only to issue non-public “mitigation plans” to those states, insisting that approach could more quickly rectify non-compliance with federal requirements. However, officials insist that they will take more punitive steps for states that remain non-compliant.
CMS also stressed that as of June 2023 it has granted nearly 250 waivers to give state Medicaid programs greater flexibilities during the “unwinding”. (Florida and Montana are the only two states that refused to seek waivers.)
HFA and coalition partners have similarly urged governors in Arkansas and other states with extremely high rates of “procedural” terminations to pause their renewal process, and a handful of states have decided to briefly do so. Idaho put an indefinite “pause” in place, Michigan agreed to grant Medicaid enrollees an additional month before terminations begin (from July 1st to August 1st) and Wyoming delayed its May 1st start until “July or August”.
Updated estimates from the Congressional Budget Office now predict that of the 15.5 million Medicaid enrollees expected to lose coverage nationwide during the “unwinding”, roughly 40 percent of that amount will remain uninsured (especially in the ten states that have yet to expand Medicaid under the ACA).
States continue to transition away from federal control over ACA Marketplaces
Illinois Governor J.B. Pritzker (D) signed legislation this week that would make his state the latest state to transition from federal to full state control over their Affordable Care Act (ACA) Marketplace starting with the 2026 plan year.
The bill (H.B. 579) was signed concurrent with legislation giving the Department of Insurance greater authority to modify or reject rate hikes that individual or small group health plans cannot justify through actuarial data (H.B. 2296). Governor Pritzker called the latter bill “monumental” as Illinois was one of only 19 states lacking that authority.
Illinois had been among just six states operating a “partnership” Marketplace that used the federal web portal (www.healthcare.gov) but retained control over other functions.
In Georgia, Governor Brian Kemp (R) signed S.B. 65, authorizing the Insurance Commissioner to transition their ACA Marketplace away from the federal web portal to either a state-based Marketplace or partnership model as early as the 2024 plan year. However, two Texas bills to do likewise failed to clear committee last session.
Eighteen states (and the District of Columbia) currently operate their own state-based Marketplaces under the ACA (only about ten states did so during the initial years after ACA implementation). Virginia will join this group of states starting with the 2024 plan year (see State of the States, Fall 2021).
States move forward with varying forms of Medicaid expansion
Two more states are set to formally expand Medicaid next quarter. South Dakota’s voter-mandated Medicaid expansion goes into effect on July 1st (see State of the States, Fall 2022), while the effective date for the Medicaid expansion recently approved by the North Carolina legislature remains up in the air (see State of the States, Spring 2023). North Carolina’s effective date was contingent upon passage of the state budget for fiscal year 2023-24, but negotiations have lingered past the July 1st deadline. Once implemented, they will become the 39th and 40th states to participate in the Medicaid expansion under the ACA.
Georgia will also partially expand Medicaid effective July 1st. Under its Pathways to Coverage demonstration waiver initially approved by the Trump Administration, the state will expand coverage only for those earning up to 100 percent of the federal poverty level (FPL). The waiver approval had been rescinded by the Biden Administration because the partial expansion will cover only about 15% of the more than 250,000 Georgians caught in the “coverage gap” (between the state’s current eligibility levels and ACA expansion threshold). In addition, the waiver will impose premiums for the expansion population, as well as onerous work reporting requirements that had previously been blocked by federal courts.
However, a federal judge in Georgia upheld the Trump Administration’s approval of the waiver last year, making Georgia the only state with an approved work reporting requirement on certain Medicaid enrollees. (Work reporting programs in 12 other states won approval from federal regulators in 2018-20 but were halted by litigation and COVID-era requirements. The Biden Administration subsequently revoked those approvals on grounds that work is not a primary purpose of Medicaid. Georgia, in contrast to the 12 other states, plans to apply its plan only to new applicants, not to current Medicaid enrollees – a potentially decisive difference.)
New Hampshire was expected to make its full Medicaid expansion permanent after both chambers passed needed legislation (S.B. 263) this session. However, a late amendment by the Senate Finance Committee limiting the reauthorization to only seven years may hinder that effort. The expansion must be reauthorized by the end of 2023 or expire.
The vast majority of states continue to seek Medicaid (or other coverage) expansions for specific population groups. For example, at least 36 states and the District of Columbia have already exercised the option authorized by Congress in the American Rescue Plan Act of 2021 to expand Medicaid postpartum coverage for up to 12 months. (Medicaid postpartum coverage in many states had been limited to 60 days or less). Nine other states are planning to extend coverage to 12 months, while three (Texas, Utah, and Wisconsin) are seeking more limited extensions. Arkansas, Idaho, and Iowa are the only states not proposing any extension.
In addition, Minnesota Governor Tim Walz (D) signed S.F. 2995 this month, which in 2025 will make the state only the third (after California and the District of Columbia) to make ACA Marketplace coverage open to undocumented immigrants.
Wisconsin residents: Congress told states it was time to re-start Medicaid eligibility reviews (as early as Feb. 1, 2023) and terminations (as early as April 1, 2023, with completion due by April 2024). Check your status today! Learn more. WI Medicaid (Badgercare) recipients can check their status here.
Source: Hemophilia Federation of America, State of the States, July 2023.