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BREAKING NEWS: WI Asks Feds to  Approve BadgerCare Plus Changes

The Wisconsin Department of Health Services (DHS) has prepared a Section 1115 Demonstration Waiver request seeking changes to how it administers BadgerCare Plus. States have flexibility to change the services, delivery, and payment of Medicaid programs thanks to Section 1115 of the Social Security Act. All requested changes must be approved by the Centers for Medicare and Medicaid Services (CMS) before they can be implemented.

In the recent past, Wisconsin requested changes to BadgerCare Plus programs that included adding things like premiums for children and drug testing for adults. While both provisions were approved by Wisconsin’s legislature, they were not approved by the then Obama Administration.

But Wisconsin also used a Section 1115 waiver to expand BadgerCare to include Childless Adults for the first time, moving childless adults out of the BadgerCare Plus Core Plan and into a full benefit BadgerCare Plus Coverage program with no premiums and comprehensive services. That Waiver request, after a few revisions, was approved by the Obama Administration. (In so doing, Wisconsin has relied on this waiver instead of accepting federal funding for a full Medicaid Expansion for this Childless Adult population. In the same waiver, however, Wisconsin restricted access to parents on BadgerCare Plus to 100%PFL, instead of a Medicaid Expansion threshold of 138% FPL.)

The new Trump Administration has signaled, however, that it will be much more generous in granting flexibility to states to implement changes to their Medicaid programs, and waivers is one such way to accomplish that.

(Read the full version)

"April Showers"
Market Stabilization Rule Finalized; ACA Weakened

The Centers for Medicare and Medicaid Services (CMS) has issued a final rule to accomplish what it calls “Market Stabilization.” You may recall, the initial proposed rule was issued back in mid-February, allowing a restrictively short comment period – only 20 days instead of the traditional 60 days. The rule addressed, mainly: the duration of Open Enrollment Periods, changes to Special Enrollment Periods, Guaranteed Availability, Network Adequacy, and Actuarial Values of insurance plans.

Short comment period notwithstanding, over 4,000 individuals and agencies provided comment on restrictions in the rule. As summarized by the Health Affairs Blog, “Consumer advocates challenged a number of the proposed rule’s provisions, contending that the proposed changes were not only contrary to the interest of consumers but might well contribute to destabilizing rather than stabilizing the exchanges.” In every instance, the rule finalized what had been proposed in February, despite the overwhelming feedback.

While not deciding on a "repeal or replace" strategy, the Trump Administration instead published this rule to start the ball rolling on changes to appease insurers in the short term. The rule responds to insurer concern that the insurance markets could be “thrown into chaos” if repeal were to happen in the next year or two – but with open enrollment for 2018 coverage still in the works. But as we discuss below (See “Death Spiral?”) a recent Standard and Poor’s global report found that “insurer performance in the individual market improved in 2016,” and was on track to perform even better in 2017 and beyond. In his blog for Health Affairs, Timothy Jost says, “the market stabilization rule may be an overreaction to a problem that could be addressed by changes more limited in scope.” 

Birth Cost Recovery Discussion Ignites; Dane County in the Hot Seat (Milwaukee County Next...)

On April 11, the Cap Times published an article illuminating the burden of birth cost recovery on lower income families. "Birth cost recovery is state policy intended to support mothers, but ABC for Health...says it harms low-income and minority residents in Dane County," writes the Cap Times.

Read the full article on the Cap Times website.


The Death Spiral? Insurers See ACA Profits

Statements like Speaker Paul Ryan’s “Obamacare is in a death spiral,” and “Obamacare is going to explode,” were more than just tweets out of the White House earlier this year, they were part of the motivation behind the American Health Care Act and new “Market Stabilization Rule” finalized this week. Yet new analysis from Standard and Poor’s says the end of the individual market is “greatly exaggerated.”

As quoted in the New York Times, a new Standard & Poor’s analysis says, “We are seeing the first signs in 2016 that this market could be manageable for most health insurers…The market is not in a ‘death spiral.’” Insurance company losses are reduced and profits are imminent in 2018.

(Read the full version)
Update: Cost Sharing Reduction Litigation

The US House of Representatives initially brought a lawsuit in 2014 amid a flurry of other challenges to the Affordable Care Act that called into question the legality of payments made to insurance companies by the Administration for reducing cost sharing for lower-income Marketplace enrollees.

In its suit, the House claims that no funds were ever designated by Congress for the “cost sharing reduction” (CSR) program and are therefore illegal payments to insurance companies. It was unique from other challenges, as it was brought by the US House – a party with questionable standing to sue another branch of the federal government.

Cost sharing subsidies were one of the major components of the Affordable Care Act's (ACA) ability to increase access to affordable health insurance and reduce uninsurance rates.  The ACA allows the insurers to bill the government for the costs associated with these cost sharing reduction (CSR) policies. According to the Kaiser Family Foundation, of the 12.2 million people who selected a 2017 ACA marketplace plan, “about 58%, or 7.1 million, are receiving cost-sharing reductions.”

Voices & Views: Residential Treatment
In spite of uncertainty about the future shape of federal Medicaid funding, Governor Walker appears about ready to submit a request for federal permission to make changes in Wisconsin's BadgerCare Plus program that would include a new drug screening and treatment requirement. One positive element of the governor's proposal is that it includes a special request to authorize federal Medicaid reimbursement for adult substance abuse services  in residential treatment facilities.

Historically, residential treatment has been characterized as a non-covered service under federal Medicaid law, so this request, if approved, may be a step in the right direction. Unfortunately, it doesn't go nearly as far as it can and should.

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