Vaccines are a powerful and cost-effective tool to prevent diseases and save lives. Once common, deadly diseases such as polio, measles, and mumps are preventable and smallpox no longer exists outside of a laboratory. According to research estimates, of 4.3 million infants born in the United States in 2009, vaccines will prevent 40,000 deaths and 20 million illnesses over their lifetimes. Vaccinating children is also cost effective, saving $10.20 for every $1 spent on immunizations.
Despite these successes, states are working to improve their immunization rates, which hovered at 68.4 percent nationwide in children ages 19 to 35 months in 2012. California is using an assortment of strategies and inducements to boost its immunization rates.
How Can States Increase Immunization Rates through Medicaid?
Medicaid plays a key role in the delivery of vaccines, especially among vulnerable populations including children and pregnant women. Because Medicaid covers a large percentage of US children (39 percent), increasing childhood immunization rates among Medicaid beneficiaries can generate significant long-term savings. US Centers for Disease Control and Prevention (CDC) officials estimate that vaccinating children born between 1994 and 2018 has saved the United States about $300 billion in direct medical costs and $1.38 trillion in total costs, and protected millions from serious diseases.
State Medicaid programs can employ a variety of levers to increase immunization rates among their beneficiaries, from ensuring access and coverage for vaccines to tracking targeted metrics that inform provider incentive payments and reimbursement. These levers include:
- Providing comprehensive coverage: Early and Periodic Screening, Diagnostic and Treatment (EPSDT) is Medicaid’s benefit for children and adolescents younger than 21, as described in Sec. 1905(r) of the Social Security Act. The EPSDT benefit requires that states provide all vaccines recommended by the Advisory Committee on Immunization Practice (ACIP) to all children eligible for EPSDT benefits.
- Making vaccine available: Through the Vaccines for Children (VFC) program, the CDC purchases vaccines at a discount and distributes them to state health departments and other local and territorial public health agencies. These entities distribute the vaccines to private and public health providers who are registered as VFC Children are eligible for VFC-funded vaccines if they are younger than 19 and Medicaid-eligible, uninsured, American Indian or Alaska Native, or underinsured and vaccinated in certain settings. VFC-eligible children receive recommended vaccines at no cost when administered by a registered VFC provider.
- Using metrics: The US Department of Health and Human Services sets annual Medicaid and Children’s Health Insurance Program (CHIP) health care quality measures to ensure providers deliver appropriate care to their patients. The 2019 Medicaid and CHIP Core Set of Children’s Health Care Quality Measures includes the Healthcare Effectiveness Data and Information Set (HEDIS) Childhood Immunization Status measure.* Monitoring and measuring changes in vaccine delivery through this metric is a critical step to improving targeted immunization rates.
- Using incentive measures: State Medicaid programs can use incentive payments to increase immunization uptake. For example, evidence shows that incentive payments to providers through Medicaid pay for performance programs increases childhood immunization rates.
- Performance improvement projects (PIPs): State Medicaid programs can encourage managed care organizations (MCOs) to focus on improving immunization rates by including it as one of their PIPs. Medicaid MCOs participate annually in PIPs.
- Form partnerships to strengthen immunization efforts: Multiple state agencies play an important role in increasing immunization rates. Medicaid and public health agencies can partner with other stakeholders to address mutual goals.
- Data sharing: States have various data sources from different agencies that may include information on vaccination status. This includes immunization information systems (IIS), which are confidential, population-based computerized registries that record vaccination doses and are usually maintained by public health departments, and Medicaid Management Information Systems (MMIS), which contain Medicaid claims data. Data exchanges between IIS and MMIS can help identify missed opportunities for vaccination, monitor gaps in immunization coverage, and improve vaccination rates.
A Healthy People 2020 immunization target is to increase the percentage of children ages 19 to 35 months who receive the recommended doses of diphtheria, tetanus, and pertussis (DTaP), polio, mumps-measles-rubella (MMR), Hib (meningitis), hepatitis B, varicella and pneumococcal conjugate vaccine (PCV) to 80 percent, from the 2012 average of 68.4 percent. As of 2017, California’s combined seven-vaccine series coverage rate among children ages 19 to 35 months was 68.6 percent. California’s health-related agencies have been working over the last several years to increase the state’s childhood immunization rates. Medi-Cal, California’s Medicaid Program, covers 43 percent of children in the state, so Medi-Cal has strong incentives to work to improve vaccination rates among its beneficiaries. Medi-Cal uses the following levers to reach this goal.
- Comprehensive coverage: The California Department of Health Care Services (DHCS) administers the EPSDT benefits to all low-income youth enrolled in Medi-Cal consistent with the federally mandated benefit. Pregnant women (of any age) and all children younger than 21 are eligible for Medi-Cal if they meet income limits.
- Vaccine availability: Medi-Cal participates in the VFC program to ensure that vaccines are eligible at no charge to public and private providers for eligible children. DHCS reimburses enrolled providers the administrative fee per dose of vaccine. In 2018, the California Department of Public Health (CDPH) distributed approximately $665 million worth of ACIP-recommended pediatric vaccines through the VFC program. Immunizations are also a medical and pharmacy benefit for all adult Medi-Cal members, including pregnant women.
- Metrics: California’s Medi-Cal program collects the HEDIS measure “Childhood Immunization Status” from all of its MCOs, which requires the administration of the 10 ACIP-recommended vaccines by age two. MCOs are required to meet a minimum performance benchmark on the childhood immunization measure – 50 percent of all Medicaid health plans nationally, as determined by the National Committee for Quality Assurance). When MCOs do not meet the benchmark, quality improvement work is required, sanctions are imposed, and corrective action may be imposed. MCOs are contractually required to document each member’s need for ACIP-recommended immunizations as part of all regular health visits, and to ensure that all children receive ACIP-recommended immunizations at any health care visit.
- Incentive measures: California’s Medi-Cal program operates a directed payment Quality Incentive Program (QIP) that directs MCOs to make QIP payments to designated public hospital systems tied to performance on specific performance metrics, including the Childhood Immunization Status and Immunization for Adolescents measures. As part of California’s 1115 Waiver, Medi-Cal provides incentive payments to designated public hospital and district and municipal hospital systems tied to performance on specific performance metrics, including the Influenza Immunization measure for members ages six months and older [California’s Public Hospital Redesign and Incentives in Medi-Cal (PRIME) program]. In addition, California’s Medi-Cal Value-Based Payment Program provides an incentive payment to providers for administration of several vaccinations, including the pertussis vaccine to women who are pregnant (supporting the HEDIS Prenatal Immunization Status Measure), the influenza vaccine to adults 19 years and older, and the last dose of any of the multiple-dose vaccine series given on or before a child’s second birthday (DTaP, polio, hepatitis B, Hib, pneumoconccal conjugate, rotavirus, and influenza), supporting the Childhood Immunization Status measure.
- Performance improvement projects (PIPs): In 2016, DHCS identified improving childhood immunization rates as one focus topic for its PIP because less than three-quarters of young children enrolled in Medi-Cal were fully immunized, and immunization is an area with quantified health disparities, especially within the Medicaid program. Between 2015 and 2017, five health plans participated in PIPs to improve immunizations of two-year-olds. In 2018, health plans with low or declining performance on the HEDIS childhood immunization indicator were required to participate in a childhood immunization-focused PIP. Between 2017 and 2019, 15 health plans participated in PIPs to improve childhood immunization rates. Beginning in the fall of 2019, health plans will embark on their third round of PIPs, one of which will focus on childhood and adolescent health. To date, seven health plans have submitted PIP-focused proposals to improve childhood immunization rates. Separate from the PIPs, as noted above, when health plans do not meet the required performance benchmark for the childhood immunization measure, DHCS requires those plans to conduct a rapid cycle quality improvement project to improve their immunization rates. DHCS is striving to increase its overall managed care childhood immunization rate to at least 80 percent coverage.
- Partnerships that strengthen immunization efforts: Medi-Cal partners with multiple stakeholders, including CDPH and other state agencies, health care providers, and other private entities. CDPH provides technical assistance to public and nonprofit health clinics, participates in the multi-sector California Immunization Coalition, and assists schools and childcare centers in complying with state immunization requirements.
CDPH continues to develop and support efforts to address disparities in immunizations of minority and uninsured children, including a focus on increasing prenatal immunization with the TDaP vaccine among pregnant Latina women. In 2015, CDPH undertook several initiatives, including the DHCS National Governor’s Association Learning Collaborative, to increase prenatal immunization rates.
- Data sharing: California’s IIS – the California Immunization Registry (CAIR) – supports immunization by:
- Providing a comprehensive immunization record that can adapt to changes in the medical home or health insurance;
- Calculating which shots children need and minimizing under- or over-immunization;
- Issuing reminders of upcoming visits; and
- Identifying individuals and populations with low immunization rates.
The Medi-Cal program requires its MCOs to ensure that immunizations are reported to the registry. California physicians’ offices, clinics, families, and schools are estimated to have saved several millions of dollars annually as a result of the registry.**
California uses strategic levers to increase immunization rates in its Medicaid population, including identifying the target populations’ EPSDT benefits, identifying metrics for quality improvement programs, and developing strategies to incentivize providers to improve their immunization rates. These levers enable the Medicaid agency to contribute as a critical partner to a strong state partnership supporting a comprehensive strategy for improving immunization rates.
* Percentage of children age two who received four diphtheria, tetanus and acellular pertussis (DTaP); three polio; one measles, mumps and rubella (MMR); three haemophilus influenzae type B; three hepatitis B, one chicken pox; four pneumococcal conjugate; one hepatitis A; two or three rotavirus; and two influenza vaccines by their second birthday. This measure calculates a rate for each vaccine and nine separate combination rates.
** California Immunization Registry (CAIR) users include health care providers, public health departments, schools, childcare facilities, family child care homes, WIC service providers, foster care agencies, welfare departments, juvenile justice facilities, and other programs that provide, track, or promote immunization.
Acknowledgements: The National Academy for State Health Policy (NASHP) would like to thank Mary Beth Hance at the Center for Medicare and Medicaid Services, Megan Lindley and Aaron Borrelli at the Centers for Disease Control and Prevention (CDC), Sarah Royce at the California Department of Public Health and Linette Scott at the California Department of Health Care Services for their time and insights, which made this blog possible. The author also wishes to thank Trish Riley and Jill Rosenthal for their contributions to this case study. Any errors or omissions are the author’s. This project is supported by the CDC. This information or content and conclusions are those of the authors.
California Gov. Gavin Newsom unveiled several health care initiatives in his inaugural address last week, including a well-publicized plan to lower drug costs using public purchasing power. But a less-publicized action – establishing a state surgeon general post – to help tackle the social determinants of health and health equity, presents a significant opportunity for a state as diverse as California.
The idea is not a new one. In 1996, Pennsylvania established and still maintains a physician general position. In the decade that followed, Michigan, Florida, and Arkansas governors also appointed state surgeons general, though Michigan eliminated the position in 2010.
In their early iterations, surgeons general were tasked with a variety of jobs that differed by state, but included:
- Showcasing the importance of health and wellness;
- Addressing health care safety;
- Providing a cross-agency focus on health;
- Serving as the state’s chief advocate and strategist for public health; and
- Strengthening the state’s public health infrastructure.
The states usually house the surgeon general in their departments of public health, including Florida where the surgeon general also serves as the health department’s director. The Arkansas surgeon general holds a joint appointment with the University of Arkansas’ School of Medicine.
California’s proposal emerges at a time when health disparities are increasing and there is a growing consensus that health can only be fully achieved when we address economic and life circumstances — such as housing, education, and jobs — that can contribute to poor health. Gov. Newsom has charged his new surgeon general to address these social determinants of health.
The task of running a state health department is growing increasingly complex and divergent, and some states are turning to non-physicians to take on that administrative role. The appointment of a state surgeon general could provide additional physician input to help health department leaders meet the challenges of improving the health of a state’s population. This approach can help state agencies collaborate to address disparities and social determinants of health. (Read NASHP’s new Toolkit: Upstream Health Priorities for New Governors.)
Many will be following the Golden State’s actions to learn more about the role and responsibilities of its new surgeon general. We want to see how this latest iteration of the position helps advance the governor’s comprehensive approach to improving health for all residents through cross-sector reforms.
Below is a chart from our report, Advancing Health Care Transformation through a State Surgeon General Model: Opportunities and Challenges, which details the roles and responsibilities of surgeons general in Arkansas, Florida, Michigan, and Pennsylvania.
States, as regulators, payers, and innovators of health care, are uniquely positioned to improve the lives of Americans with serious illnesses by promoting access to palliative care. The National Academy for State Health Policy (NASHP) is working with state leaders to expand and improve palliative care, explore how these services align with other initiatives (e.g., value-based purchasing and delivery system reform), and identify what states need to effectively advance palliative care services.
Palliative care services can improve care and the quality of life of individuals with serious illness by better managing symptoms and stressors. They can also reduce costs, especially for complex populations with serious illnesses. A 2016 study that examined home-based palliative care found these services generated a 4.2 to 6.6 percent return on investment, primarily by reducing unnecessary hospitalizations.
At NASHP’s recent 2018 State Health Policy Conference, a group of state leaders explored these issues from a policymaker perspective and discussed what it would take to advance palliative care services in their states. Below are some of the key themes and opportunities raised during the session:
- States need palliative care definitions and standards: State officials identified the need for tools and resources to help states license, reimburse, monitor, and measure high-quality palliative care. Definitions and standards tailored to state regulatory needs can help jumpstart state efforts. California, Maryland, and Colorado have all implemented regulations defining palliative care, which can serve as starting points for other states.
- Workforce shortage is a potential barrier: States report that trained professionals — able to address palliative care needs in primary care and as members of specialized palliative care teams — are in short supply. To address this issue, Rhode Island supports provider education on palliative care as part of its cancer control program, and recently expanded the training to providers who treat other serious illnesses. As part of its State Innovation Model test grant, Rhode Island is also developing patient tools for advanced care planning and is offering education to providers to help them feel better equipped to hold these difficult discussions.
- Monitoring utilization and quality can be challenging: State Medicaid agencies can support reimbursement for palliative care in a number of ways, including:
- Through managed care contracting;
- As a distinct state plan option; and
- By leveraging existing physician billing codes.
While these payment mechanisms are readily available, participants noted limitations persist. Even with enhanced reimbursement rates for palliative care, one state official reported that provider uptake was low and that the enhanced payment was underutilized. Other officials from states that had activated specialized billing codes for palliative care expressed concern about the quality of care delivered and adherence to best practice standards. States without specialty codes or a specific benefit noted that it was impossible to gauge utilization or quality given the lack of claims data.
California, which requires its Medicaid managed care plans to cover palliative care services as a package of benefits, is an example of a state that has developed a comprehensive regulatory framework to address some of these issues. Its notice to plans outlines eligibility criteria, describes service components (including advance care planning, palliative care assessment and consultation, access to a palliative care team, and mental health services) and requires plans to monitor and report palliative care utilization and provider data to California’s Department of Healthcare Services.
- Stakeholder engagement can help when defining and developing palliative care services. State officials reported that engaging a broad range of agencies and stakeholders to develop palliative care initiatives was helpful. At least 27 states have multi-stakeholder taskforces or councils established specifically to advise on palliative care, and those groups provide a readymade forum for state policymakers.
State policymakers are working hard to move state systems toward more comprehensive and value-driven care, often with a special focus on populations that have chronic, complex, and high-cost care needs. Over the next two years, NASHP will convene a Leadership Council of state officials to identify promising policies and develop state recommendations and an implementation roadmap to increase access to and quality of palliative care.
NASHP will also be providing technical support to 10 states to assist them in advancing palliative care through resources, such as development of model legislation or Medicaid managed care contract language, and review of state regulations of palliative care providers and facilities. Look for announcements about publically-available palliative care resources and the technical assistance opportunities at NASHP’s website.
If your state has implemented or is exploring innovative strategies to support palliative care in Medicaid, please share your state’s experience with NASHP, contact Hannah Dorr.
Consumer out-of-pocket spending on health care costs, including “surprise” medical bills – often incurred for costly, out-of-network care — is on the rise and state lawmakers are responding with legislation to protect consumers.
Surprise bills happen when consumers receive unexpected charges for medical care that they assumed would be comprehensively covered by their insurance plans. This often occurs when consumers unknowingly receive services from providers or facilities that are not covered within their insurance network, such as a specialist who contracts to work in a hospital, but does not participate in that hospital’s network.
Surprise bills can leave consumers on the hook for up to thousands of dollars in unexpected medical costs. This issue is pervasive throughout the health care system and affects consumers regardless of whether they are covered through individual insurance markets, such as an Affordable Care Act marketplace, or their employer. (For background on surprise billing, read NASHP’s report Answering the Thousand-Dollar Debt Question.)
Generally, state laws that address surprise billing fall into four categories:
- Laws that cap or limit charges for services that are delivered out-of-network, especially for emergency care;
- Laws designed to improve cost transparency in service costs and/or provider networks;
- Laws that set up an arbitration process to resolve surprise bills that focus on achieving a resolution between providers and insurers without burdening consumers); and
- State investments in committees to study the impact of surprise billing on state consumers.
Several states took action during the 2018 legislative session to address surprise billing, ranging from New Jersey, whose new law captures most of the above strategies, to California, New Hampshire, and New York, which passed laws to restrict “balance billing” (when providers charge patients for the difference between for what they charge and the insurer’s allowed amount.)
Below is a summary of new state laws designed to protect consumers from surprise bills.
- California AB 2593: California took aggressive action in 2017 to curb surprise billing in the state and its newest law adds to those protections by prohibiting air ambulance providers from charging consumers more than in-network costs, even if the consumer receives services from an out-of-network air ambulance provider. (It is currently awaiting governor’s signature)
- Missouri SB 982: The law requires insurers to pay providers for all emergency services “necessary to screen and stabilize an enrollee” and any additional services authorized by the insurer. Consumers cannot be held liable for cost-sharing for these services, beyond what is allowed under their insurance plans, even if the provider is out-of-network. The law also outlines a specific process for arbitration between insurers and providers to settle costs owed in cases where out-of-network care is provided to consumers.
- New Hampshire HB 1809: This law prohibits specific providers (those performing anesthesiology, radiology, emergency medicine, or pathology services) from balance billing a consumer for services in cases where the provider is out of the consumer’s network but delivers services at a hospital or ambulatory surgical center that is in the consumer’s network. New Hampshire also passed a law to establish a committee to study the balance billing practices of ambulance providers in the state. A report on the committee’s findings is due Nov. 1, 2018.
- New Jersey Chapter 32: This is of the most comprehensive surprise billing laws drafted to date. It requires:
- Health care facilities to provide clear and public information regarding the insurance plans it contracts with, the network status of providers who provide services in that facility, and the costs of services in that facility;
- Providers to share information about the insurance plans they participate in and the health care facilities they are affiliated with;
- Insurers to update and maintain accurate information about their provider networks; and
- Insurers to provide consumers with clear information regarding out-of-network health care benefits.
The law also prohibits out-of-network balance billing in the case of emergency services and sets up a process of arbitration for insurers and providers to resolve billing disputes. Notably, the law includes provisions that attempt to guarantee similar protections for consumers covered by self-insured plans, over which the state has limited authority.
- New York Chapter 57: The state’s Health and Mental Hygiene Budget includes a provision to protect survivors of sexual assault from being balance billed by a hospital, a sexual assault examiner, or a licensed health care provider.
- Oregon Chapter 43: By July 2020, Oregon’s Department of Consumer and Business Services will provide a report to the state legislature on all consumer complaints received by the state related to out-of-network providers working at in-network facilities.
Other states have actively considered bills to outlaw surprise bills and additional legislation is expected during the 2019 legislative sessions. The National Academy for State Health Policy (NASHP) will continue to monitor these bills and other efforts to address surprise billing.
On the federal level, in mid-September a group of nonpartisan US senators unveiled a draft bill that also tackles surprise billing. It adds a cap on out-of-network billing rates, prohibits surprise billing in emergency situations, and requires patients to receive notice before they receive out-of-network medical care.
Prevention and collaboration were the key themes as state policymakers explored innovative and cost-effective strategies to integrate oral health and primary care during #NASHPCONF18’s session, Cross Currents: Integration of Oral Health and Primary Care.
Speakers underscored the importance of high-quality and regular dental care in preventing major oral and physical health problems and delivering cost savings to state Medicaid budgets. Mary Fliss, deputy of Clinical Strategy and Operations at Washington’s State Health Care Authority, reviewed her state’s Oral Health Connections Pilot Project. The project, recently authorized by the state legislature, will track how providing enhanced dental benefits to adult Medicaid clients in three counties impacts access to dental care, health outcomes, and medical costs. The project will specifically target individuals with diabetes — because of the links between periodontal health and chronic conditions — and pregnant women because improved periodontal health also benefits overall health.
Dentists who treat those two populations will receive enhanced reimbursement for periodontal treatment of Medicaid beneficiaries. The project is funded by the Arcora Foundation and state general funds. The state will seek federal approval for the project through a Medicaid state plan amendment.
One critical element of the project will be increased coordination between medical and dental providers. A referral tool, DentistLink, will provide a collaborative approach to documenting patient information and facilitating patient referrals and scheduling appointments.
California is also making strides toward medical-dental collaboration. Alani Jackson, chief of the Medi-Cal Dental Services Division within the California Department of Health Care Services, spoke about Local Dental Pilot Programs (LDPPs) that are testing new types of collaboration. The LDPPs are a component of the state’s Dental Transformation Initiative, which was authorized by a Medicaid 1115 waiver. Many of the LDPPs train primary care providers to conduct dental assessments to look for oral health risk factors and to administer basic preventive dental care like fluoride varnish.
For example, the LDPP run by the California Rural Indian Health Board places an oral health coordinator into primary care settings to complete dental decay risk assessments. By placing coordinators in primary care settings or in other venues such as after-school programs, California’s LDPPs are meeting people where they already are to improve access.
Another innovator takes a reverse approach by placing a physical health care provider in dental offices. Maria Dolce, associate professor at Stony Brook University School of Nursing, described the Nurse Practitioner and Dentist (NPD) Model for Primary Care, implemented by the Harvard School of Dental Medicine in partnership with Northeastern University School of Nursing. The NPD model places a nurse practitioner in a dental setting to act as a gateway to comprehensive care and to deliver primary care.
The program ensures that patients receive an annual wellness visit in combination with a dental visit for an integrated approach to care. The wellness visit is conducted by the nurse practitioner and includes a check on health and mental health risk factors as well as a review of a patient’s current health care providers.
These nurse practitioners already have the training to carry out these assessments in primary care offices – but under this program they conduct them in dental office settings. This unique model provides a personalized and patient-centric approach at potentially lower costs. To maximize resources, states considering this model could review their nurse practitioner scope-of-practice regulations to, for example, allow nurse practitioners to practice independently of physicians if they are not currently permitted under existing regulations.
Preliminary results suggest the NPD model is effective in improving overall health and managing chronic conditions. Because the wellness visit takes place in the dentist’s office, both dental and medical preventive services are provided.
The NPD model also addresses another critical theme raised during the session: how to secure long-term funding for these initiatives. Emphasis on the cost-saving benefits of these prevention initiatives could be key to moving them forward, as state policymakers contend with making these innovative practices, which emphasize cross-sector collaboration and prevention, a sustained program under Medicaid.
To learn more about strategies to incorporate oral health into medical care for chronic conditions, read State Strategies to Incorporate Oral Health into Medicaid Payment and Delivery Models for People with Chronic Medical Conditions. Both the report and this conference session were supported by the DentaQuest Foundation.
As the number of state bills to rein in prescription drug prices grows beyond 150 nationwide in 2018, the first generation of several state laws passed last year are now before the courts. The pharmaceutical industry has consistently challenged drug cost transparency and price gouging legislation passed in 2017 in federal courts. How well these state laws weather their legal challenges will determine how states shape their drug cost containment legislation in 2018 and beyond. Read more.
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.
More than 200 state health officials crowded into a National Academy for State Health Policy’s (NASHP) annual conference session recently to learn about strategies to improve population health and reduce costs while simultaneously transforming their state’s health care finance and delivery models.
|An Accountable Community for Health (ACH) is:
They came to hear representatives from California, Michigan, Oregon, and Washington State discuss their approaches to building population health priorities into their health system transformations through “accountable health” organizations. These entities invest in population health improvement through Accountable Communities for Health (ACHs) and care delivery structures that are accountable for population health, such as Accountable Care Organizations and Coordinated Care Organizations (CCO).
During the standing-room-only session, the four state presenters described their unique models, including financing and measurement strategies and relationships to broader health system transformation. Officials shared examples of how these new delivery models invest in social determinants of health to increase health and well-being and control costs. Examples include:
- Several of California’s Accountable Communities for Health have chosen to focus on reducing violence and trauma as a priority. One conference participant observed, “It doesn’t matter how many times people who are victims of domestic violence see a doctor, it won’t improve their health until the violence stops.”
- Michigan’s Community Health Innovation Regions identified the intersection of housing, homelessness, and health as a priority area. Its goal is to strengthen collaboration between health and housing agencies and develop solutions for Medicaid beneficiaries whose housing needs put their health at risk.
- Oregon CCOs’ global budgets give them flexibility to provide non-medical services that result in better health and lower costs, such as supporting home improvements and rental assistance, embedding mental health professionals in school systems, and promoting gym memberships.
- Washington state’s Accountable Communities of Health are addressing the opioid use public health crisis.
During the conference, NASHP also facilitated a half-day convening of state policymakers from 10 states, across departments and agencies, to advance state accountable health models. During the session, state officials discussed models, shared strategies, and identified multi-sectoral funding to support their focus on population health, health disparities, and social determinants of health. This cross-sector convening included officials from Medicaid and public health agencies and state health transformation offices, along with some key partners.
NASHP will continue to convene meetings, analyze, and report on the evolution of these state models, and build on previous analysis of State Levers to Advance Accountable Communities for Health, to help states advance these transformational efforts. Stay tuned for an upcoming cross-state comparison chart and accompanying issue brief that share lessons and themes related to accountable health models gathered during the NASHP annual conference.
For more information about NASHP’s work on state accountable health models, e-mail NASHP Senior Program Director Jill Rosenthal at firstname.lastname@example.org.