As states reach the midway point of their 2018 legislative sessions, many are looking for ways to stabilize their insurance marketplaces now that Congress has effectively eliminated the individual mandate that required all residents to be insured or pay a penalty. Without guaranteed participation by healthier consumers, marketplaces risk having more high-cost consumers in their pools, which will drive up premiums and destabilize markets.
|How would a state individual mandate work?
View the Feb. 7, 2018, webinar featuring Massachusetts officials explaining how they did it here.
Several states are considering implementing a state-based mandate, with bills proposed in Hawaii, Maryland, New Jersey, Vermont, and Washington. Connecticut recently released a study about the effect of a mandate and a Washington, DC, working group has adopted a recommendation to implement a mandate. Policymakers are looking carefully at how Massachusetts, which has the lowest uninsured rate in the country, implemented its mandate 11 years ago.
Key Lessons Learned from Massachusetts
Earlier this month, the National Academy for State Health Policy (NASHP) hosted a webinar to explore implementation of a state-based mandate. During the event, Massachusetts officials described their mandate and identified three key elements that state policymakers should consider. (View Massachusetts’ webinar slides here.)
- Coverage standards: What is the minimum standard of coverage that individuals must purchase in order to be considered insured and avoid a penalty?
- Affordability standards: Are there limits that should be put in place to exempt consumers from having to purchase coverage that is unaffordable?
- Penalties/exemptions: What should the penalty be for individuals who do not purchase coverage? What exemptions should be offered to avoid the penalty? How should penalty revenue be used?
State officials also discussed operational considerations when crafting a mandate, including:
- Cost and governance: What agencies should have authority over monitoring and enforcement, and at what cost?
- Outreach and education: What educational and outreach efforts are required to ensure that consumers are adequately informed about the mandate? When and how should educational efforts occur?
Massachusetts officials described the mandate as an “integral” part of their overall coverage strategy. They explained that the mandate has provided many indirect benefits to their state. Notably, the detailed information the program has provided about consumers who lack coverage has enabled the state to design effective policies and fine-tune outreach strategies to reach these consumers and enroll them in affordable programs.
Officials also described the benefits of instituting a common benefit “floor” for coverage, which has helped Massachusetts:
- Provide a quality standard of coverage that benefits all consumers; and
- Insulate the state’s insurance market from detrimental fragmentation, and consumer gaming that can be exacerbated by the existence of limited coverage options.
Such system gaming may be of particular concern pending recently proposed federal actions to grant greater flexibility over short-term and association health plans.
Massachusetts officials acknowledged the difficulty of measuring the direct impact of the mandate on reducing the number of uninsured. The state’s mandate evolved over time and did not occur in isolation. It was part of a package of reforms designed to improve affordability and access in Massachusetts. Collectively, these policy decisions have resulted in Massachusetts achieving the lowest uninsured rate in the country (currently at 2.5 percent). Recent data released by Massachusetts’ Health Policy Commission show that Massachusetts has the second-lowest average premium costs for benchmark plans sold through its exchange, a clear sign of market stability.
Ultimately, any state considering a mandate must decide how to balance each of these considerations based on its intent to:
- Improve affordability and stability;
- Establish a quality standard for required coverage; and
- Ensure the program is not overly burdensome on consumers or state systems.
Maryland’s Proposed Health Insurance Escrow Fund
Democratic state legislators in Maryland have sponsored legislation (SB 1011/HB 1167) that would use Maryland’s health insurance exchange to automatically enroll individuals in health insurance plans. The proposal is based on a concept developed by Stan Dorn, a senior fellow at Families USA, under which Maryland would institute an individual mandate and imposepenalties for lack of coverage. Under this model, consumers could use the penalties they owe to purchase future coverage. As described by Dorn, the intent of this proposal is to ensure that penalties are used to help individuals purchase coverage to the maximum extent possible. During NASHP’s webinar, Dorn outlined four phases of this plan:
- Open enrollment “pre-payment:” During the open enrollment season, consumers would come into the exchange and estimate the amount of penalty they would owe during their next tax filing for not purchasing coverage. The consumer can then opt to “pre-pay” this penalty to the exchange, and apply that payment toward the purchase of insurance coverage.
- Tax season: Upon filing tax returns, consumers would be asked to self-identify whether or not they were insured on their tax form. If they were uninsured and owed a penalty, consumers could choose to have the penalty used to purchase insurance. At this point, the exchange would check to see if the consumer was eligible for coverage at zero-cost, meaning that when tax credits and the penalty are applied, the consumer would owe zero in monthly premiums for the plan. If a zero-cost plan is available, the consumer would be automatically enrolled in that plan.
- Post-tax season: If consumers do not qualify for a zero-cost plan, their penalty would be held in escrow until the next open enrollment period. At that point, consumers can apply the penalty toward the purchase of coverage for the following year.
- Continuation of coverage: If consumers decide to drop coverage before the full year, the state keeps any amount of the penalty left after payments are made to insurers for whatever months the consumer was covered. Any penalty funds collected would be used to finance operation of this program, and to help fund a reinsurance program to help defray the cost of insuring high-cost consumers.
The Maryland proposal raises questions about consumer behaviors, underscoring that successful implementation requires the development of sufficient tools and resources to ensure that consumers can adequately make decisions about whether to use of their penalty toward the purchase of coverage. The legislation proposes an ambitious timeline for implementation, mandating that it become fully operational by Jan. 1, 2020. The Maryland exchange have not officially taken a position on the model, though legislators are consulting with them to assess the feasibility of the plan.
- As of July 1, 2011, there were 272,218 beneficiaries enrolled in Hawaii Medicaid. Of these, 268,645 were enrolled in one of four commercial managed care organizations (MCOs) or one Medicaid-only MCO under a managed care program known as Hawaii QUEST. QUEST provides medical and mental health services. Dental services are provided on a fee-for-service basis.
- Child and adult Medicaid beneficiaries with developmental disabilities are eligible to receive services through the state’s home and community-based services waiver program. The program aims to help beneficiaries remain in the community and avoid institutionalization, and offers services including personal assistance/habilitation, skilled nursing, transportation services, and consumer directed services.
As stated in Hawaii’s administrative rules (Hawaii Administrative Rules 1700.1-41), “medical necessity” refers to those procedures and services that:
“are considered to be necessary and for which payment will be made. Medically necessary health interventions (services, procedures, drugs, supplies, and equipment) must be used for a medical condition. There shall be sufficient evidence to draw conclusions about the intervention’s effects on health outcomes. The evidence shall demonstrate that the intervention can be expected to produce its intended effects on health outcomes. The intervention’s beneficial effects on health outcomes shall outweigh its expected harmful effects. The intervention shall be the most cost-effective method available to address the medical condition. Sufficient evidence is provided when evidence is sufficient to draw conclusions, if it is peer-reviewed, is well-controlled, directly or indirectly relates the intervention to health outcomes, and is reproducible both within and outside of research settings.”
|Initiatives to Improve Access
Pay for Performance
Hawaii Medicaid implemented a pay for performance incentive program to encourage improvements in quality and access. Child-specific benchmark measures include childhood immunizations, and getting care needed-child CAHPS.
|Reporting & Data Collection||
Managed care plans are required to submit encounter data at least once per month.
Electronic Data Reporting
Hawaii Medicaid is in the process of implementing an online EPSDT reporting system that allows providers to submit data electronically. The system will capture information on vaccines, screenings, and referrals, and would provide prompts and alerts for services that are due.
|Support to Providers and Families||
Support to Providers
Hawaii Medicaid operates a provider webpage with information on Medicaid and EPSDT, covered services, fee schedules, and other resources. The state also published a provider manual, which includes a chapter on EPSDT that contains a description of the program as well as information on covered services and billing procedures.
Hawaii’s Medicaid Provider Manual contains a detailed description of the dental services available to children eligible for EPSDT, including applicable billing codes, and whether prior approval is needed for each service. The state also operates a dental page for providers, which contains dental fee schedules and contact information for dental coordinators employed by Community Case Management Corporation (CCMC). Hawaii Medicaid contracts with CCMC to help beneficiaries find dentists and other dental providers.
Eligible Patient Population: The three health centers that comprise the Accountable Healthcare Alliance of Rural Oahu (AHARO) serve a total of approximately 40,000 patients through over 200,000 clinical visits annually. Approximately 50% of these patients (20,000) are enrolled in the Hawaii QUEST (Medicaid) program.
QUEST members continuously enrolled in a participating health plan and assigned to a participating health center for at least 3 months are considered to be enrolled in AHARO for the purpose of defining financial performance metrics (see Appendix F).
Eligible Provider Population: AHARO is forming partnerships both with a vertical network of providers and with selected Medicaid managed care organizations. Providers are affiliated with the three participating health centers: Koolauloa Community Health and Wellness Center, Waimanalo Health Center, and Waianae Coast Comprehensive Health Center.
The Accountable Healthcare Alliance of Rural Oahu (AHARO) was established via interagency agreement between the three participating Federally Qualified Health Centers in 2010. Contracts with the two participating Medicaid managed care plans support “health care home” standards (additional standards, beyond NCQA patient-centered medical home recognition, for care enabling services, cultural proficiency, community involvement, and workforce and economic development), performance-based reimbursement, and shared savings partnerships.
The Accountable Healthcare Alliance of Rural Oahu (AHARO) serves as a contracting arm for three Federally Qualified Community Health Centers (FQHCs): the Koolauloa Community Health and Wellness Center, Waimanalo Health Center, and Waianae Coast Comprehensive Health Center. AHARO was established via an interagency agreement and answers to the three community-elected governing boards of the participating FQHCs.
|Criteria for Participation||
Participation in the Accountable Healthcare Alliance of Rural Oahu (AHARO) is currently limited to the three Federally Qualified Health Centers that established it in partnership with 2 Medicaid managed care plans: Koolauloa Community Health and Wellness Center, Waimanalo Health Center, and Waianae Coast Comprehensive Health Center.
The Accountable Healthcare Alliance of Rural Oahu (AHARO) seeks to utilize contracts with Medicaid managed care organizations based on aligned incentives and shared savings.
AHARO’s payment model uses a per member per month payment for medical home proficiency, as well as a $5 per member per month match from health plans for investment in health information technology and care coordination. Shared savings are built into the contracts with health plans, based on seven metrics. AHARO receives 50-75% of the savings, depending on the relative health center and health plan performance on financial metrics and accountability measures.
|Support for Infrastructure||
The Accountable Healthcare Alliance of Rural Oahu (AHARO) has proposed the establishment of a $5 per member per month matching fund by Medicaid managed care organizations that would fund health information technology and care coordination activity.
AHARO is using a data exchange and data repository that combines information from electronic health records at participating health centers and those of the two Medicaid health plans to create real-time dashboards reflecting the status of performance by providers. Incentives are proposed linked to improved performance on selected metrics by each individual health care home.
|Measurement and Evaluation||
Providers participating in the Accountable Healthcare Alliance of Rural Oahu (AHARO) are evaluated on metrics developed as a part of the Pacific Innovation Collaborative (PIC) project. These metrics were negotiated with two Medicaid health plan partners and include measures with subsets of patients demonstrating co-morbidities to psychosocial conditions as well as metrics that measure access to primary care.
Practices participating in AHARO are further evaluated not only on NCQA patient-centered medical home standards but also on a set of supplemental “health care home” standards. These standards measure practices’ capacity along four dimensions:
AHARO has developed a set of performance standards for the Medicaid health plans that focus on the following capabilities:
The Affordable Care Act (ACA) offers states multiple policy levers to improve health status and care for racial and ethnic minority populations through delivery system reforms, public health and community interventions, and insurance coverage, as well as provisions specific to disparities reduction. This report synthesizes the experiences of teams from seven states (Arkansas, Connecticut, Hawaii, Minnesota, New Mexico, Ohio, and Virginia) that participated in a learning collaborative to advance health equity using select ACA and state policy levers. The report also presents opportunities for state and federal collaborations to strengthen these efforts, as well as important lessons for advancing health equity.
An accompanying issue brief provides a high-level summary of the full report.
No HIE Strategic Plan available yet.
In Hawaii, the PCO and PCA work together to provide technical assistance to CHCs to support the adoption of health information systems and collaborated to expand services for the establishment of new CHCs. Their coordination with several oral health groups also led to state legislation for a new dental license called community services licenses. The licenses may be used to practice dentistry in FQHCs, Native Hawaiian Health Systems Centers, or post-secondary dental auxiliary training programs.
In May 2011, Hawaii Governor Neil Abercrombie announced his administration’s intent to secure medical homes for Hawaii’s 270,000 Med-QUEST (Medicaid) beneficiaries. Integrating behavioral health and social services with primary care will be a major goal of the state’s medical home efforts.
Hawaii is currently working to develop and obtain approval for a health homes state plan amendment (SPA). A State Plan Option Collaborative has been meeting to select chronic conditions to focus on, define what “health home” will mean in Hawaii, reach consensus on culturally competent health home service definitions, agree on a payment methodology, and identify key measures to track. The state is now carrying out a workplan for developing the health homes SPA.
In addition, a public-private partnership—known as the Hawaii Healthcare Project— between the Office of the Governor and Hawaii’s health care industry identified development of “Accountable Care-Like (ACO-like) Organizations” as health system transformation priorities in 2012. To learn more about accountable care activity in Hawaii, visit the Hawaii page of NASHP’s State Accountable Care Activity Map.
Federal support: Hawaii County is the recipient of a $16.1 million Beacon grant intended to improve quality, promote efficiency, and increase capacity through the use of health information technology. There are many potential synergies with medical homes and heath homes. Further information is available online.
Last Updated: April 2014
The following groups are represented on Hawaii’s Health Homes State Plan Option Collaborative: