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Coffee CAHC policy round-up: February 10, 2017

Coffee CAHC is a twice-weekly newsletter where we round up and comment on the latest health coverage policy developments both nationally and here in Maine. We hope you find these updates helpful!

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Coffee CAHC

115th Congress, 1st session

128th Maine Legislature, 1st session

 

February 10, 2017

 

You know, when I started writing Coffee CAHC, I didn’t necessarily intend for this little prologue section to turn into a weather thing every time, but what the heck else am I gonna talk about in Maine in February? Dug out from one storm, and now I hear panicky rumors that Monday’s storm might be measured in feet. Coffee is one way to warm up, but, hey, anybody think there’s a market for snappy health policy newsletters in Cancun…? I think I’d better go ask around down there, just in case? But before I start packing, I’ll finish this one up for ya.

 

National level

We have a new Secretary of Health and Human Services, folks! Representative (now Secretary) Tom Price was confirmed by the Senate early this morning, putting another cabinet member in place for the Trump Administration. This one comes with broad authority over our particular corner of the world, especially, of course, the Affordable Care Act. Remember, a lot of changes can be made administratively, and we expect to start seeing the pace of those changes pick up now that the secretary is in place. His arrival may also give a jolt to the debate over an ACA replacement, since he’s expected to be the administration’s point person on that process.

We’ve already seen one interesting change from the Administration in the past few days: a slimmed-down Healthcare.gov website, with large swathes removed entirely and a lot of other changes made across the board. I don’t know that I have a really pithy analysis here, except to say that there has been fairly widespread reporting on a lot of changes being made to federal websites in order to align them more closely with the policy agenda of the new Administration, and this seems in line with that overall movement. Still, worth knowing, especially for those of you in the assister/navigator community who work with the website often.

Another change on the horizon may be to increase the age rating bands under the ACA. This gets a little tricky. “Age rating bands” are something I want to do a deep-dive on in a future Coffee CAHC, so I won’t get into too many details now. But basically, under the ACA right now, insurers can only charge older enrollees premiums that are 3x as much as what the youngest enrollees pay. The proposal being floated would increase that to 3.49 percent, using an apparently kinda-tricky analysis of what’s allowable under the law (basically they’re saying that since 3.49 “rounds down” to 3, it’s allowable). In other words, older enrollees would pay more, the hope being that premiums would then decrease for younger enrollees; if premiums are more affordable for those younger enrollees, the hope is more of them enter the market, thus diversifying the risk pool and lowering premiums overall for everybody. Key phrase: “hope.”

 

State level

All quiet on the snowed-in front. The Legislature canceled all business yesterday, so not much new.

But we do want to point you toward some action alerts from our friends at Maine Equal Justice Partners. Governor LePage is throwing around a lot of possible changes to MaineCare, both through his budget and through some proposed rules. MEJP is your best source for what those changes would mean and how you, and your constituencies, can take action to stop those cuts from taking place.

 

Can you use it in a sentence?

Oooo, it’s this thing again!

Today’s deep dive term: “block grants”.

With all the news swirling in DC around health care reform, we’ve been particularly focused on the changes to the Affordable Care Act and the individual health insurance market. But there’s a lot more to health reform than just the individual market. One major change that might be coming is “block granting” Medicaid.

Right now, Medicaid is an “entitlement”. That means that the government is required to provide the program for anybody who qualifies. You meet the criteria, you’re in the door. State and federal governments split spending on Medicaid, with the feds picking up their share of the tab through something called the federal medical assistance percentage, or “FMAP”. That FMAP amount varies state-by-state based on a formula, from a floor of 50% up to a high of nearly 75% (Maine falls more or less in the middle, with an FMAP of 64.38%, meaning for every dollar we kick in, the feds match us with $1.81).

People qualify for Medicaid based on income and being in something called a “category”, meaning a group of people who are eligible for coverage based on their circumstances. Some of these are required by the federal government in order for a state to participate in the program: kids, parents of minor children, pregnant women, the elderly, and the disabled, for instance. This is why we sometimes hear of folks who don’t qualify for Medicaid referred to as “non-cats” (non-categoricals; people who don’t fit any of the available categories). But states are allowed some flexibility to create other categories through “waivers”, if they want to cover individuals who may not qualify through traditional Medicaid categories. In Maine, for instance, we have a waiver that allows individuals living with HIV to qualify for a range of services.

Block granting would completely overhaul that payment system and give states one big grant with enormous flexibility to design a program that meets some set of standardized coverage goals (though at the moment, what those goals might look like is pretty unclear). In other words, states would have flexibility to determine what kind of coverage they offer, and to whom, and under what circumstances, and how much if anything those people pay for that coverage, in ways that they currently may not be allowed (or only in limited circumstances through waivers). The amount each state gets would probably be based on current usage in a base year, and then adjusted annually for inflation. There’s also a method of calculating the amount each state would get called “per capita” or “per-caps”, which would allow each state a fixed amount of money per enrollee with a ceiling (so once the state spent its federal allowance, any further enrollees would be paid for entirely out of the state coffers), which may be picking up steam in DC lately.

Supporters of block granting often point to that flexibility as one of the biggest reasons to switch to this funding mechanism. They say that states are best positioned to understand the needs of their own populations, and design innovative systems that can hold down costs based on their actual population needs. In addition, the savings to the federal budget are enormous: one GOP plan floating around would cut spending by up to $1 trillion over the next decade.

As far as we’re concerned, though, that’s about as far as the “good” news about block grants goes. Report after study after issue brief after op-ed after analysis all show that block granting is a surefire way to make sure that fewer people are covered by less generous benefits that they pay more for. Increasing block grant allowances by inflation fails to account for the fact that health care spending tends to rise much faster than inflation, meaning states are left on the hook trying to do more with less. The idea that making low-income consumers pay more for their Medicaid as a way to rein in spending is a blatant failure to recognize that it is increases in costs, rather than increases in utilization, that drive increases in spending by insurance programs – Medicaid being no exception. And there’s actually already huge flexibility for states to design Medicaid programs that work for them, so arguments that block grants are the only path to innovation don’t hold much water.

In short, put CAHC down as “not fans” of block granting. But at least now you have a better idea of what the term means as you hear it kicked around!

 

Would you like to know more?

We’re hearing more and more about high deductible health plans being coupled with health savings accounts (HSAs) as a way to help consumers make “smarter” decisions when it comes to spending their health care dollars. Economists have long looked at this as a theoretically sound way to control costs. Except, funny thing, the current debate over this approach reminded me of a significant study from a couple years back: it doesn’t actually seem to work that way.

 

Until next time, friends, I remain,

-Steve

Comments are closed.

Open Enrollment for 2018 coverage in the Health Insurance Marketplace created by the Affordable Care Act (ACA, or “Obamacare”) will start again on December 15, 2017. If you did not enroll in a health insurance plan by January 31, 2017, you can not enroll in a plan in 2017 unless you qualify for a Special Enrollment Period. Also, you will likely be penalized at tax time for not enrolling in a health insurance plan. CAHC HelpLine Staff can help you navigate these confusing health coverage systems call them today at 1-800-965-7476! Get covered Find free help from a “navigator” or other local assister in Maine — a service of enroll207.com. Search by city or zip code.

Workshops & Events

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    5th Annual HC4ME Conference!

    8:00 am - 4:00 pm

    Our conference theme this year is: The Future of Health Care in Maine: Defending Our Gains, Defining Our Vision.

    This year’s conference will offer two interchangeable tracks: a Policy Track, and an Enrollment Track.  The Policy Track will explore the current state-of-the-art in health policy, particularly around coverage and delivery system reforms. The Enrollment Track will explore information enrollment professionals will need or want to know.  The conference will also include panel discussions exploring the current state of health reform.

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  • October, 2017
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    Bangor MaineCare A to Z Workshop

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  • Oct
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    Portland MaineCare A to Z Workshop

    9:00 pm - 4:00 pm

    This workshop offers an in depth look at MAGI & Non-MAGI MaineCare eligibility rules for families, seniors, and people with disabilities. Participants will review and discuss recent State and Federal level changes to MaineCare related to the Affordable Care Act. Sponsored by Consumers for Affordable Health Care and Maine Equal Justice.

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