The President’s budget request for federal fiscal year (FFY) 2021 proposes a 10 percent reduction in the Department of Health and Human Services’ (HHS) budget. A signature piece of the budget features the President’s Health Reform Vision, which includes $844 billion in cuts over 10 years to implement the Administration’s efforts to provide “better care at lower costs.”
While the proposed budget is subject to Congressional review and expected to change, it is important for states to consider how the Administration’s priorities could affect public health programs. The following highlights some of the key budget proposals that impact state health programs.
- Increases oversight of the 340B Program. The proposal gives explicit oversight authority to the Health Resources and Services Administration (HRSA) with the goal of creating enforceable standards for participation and ensuring 340B benefits low-income and uninsured patients. Part of the increased funding for oversight ($34 million) will come from a new user fee on covered entities based on 340B sales.
- Bipartisan drug pricing proposals. The budget includes an allowance of $135 billion in savings for bipartisan Congressional drug pricing proposals. The Administration specifically supports efforts to improve the Medicare Part D benefit by establishing an out-of-pocket maximum and lowering out-of-pocket costs for seniors, as well as reforms to US Food and Drug Administration (FDA) approval and regulatory measures to bring lower-cost generics and biosimilars to market.
Health Insurance Markets
- Encourages expansion of coverage in the small-group market through Multiple Employer Welfare Arrangements (MEWAs). Provides additional funding to the Employee Benefits Security Administration to encourage adoption of policies to boost insurance coverage for small businesses. Specifically, the budget suggests promotion of MEWAs – an arrangement made when multiple employers coordinate to offer benefits to their employees – for example, association health plans are a type of MEWA. State regulation of MEWAs varies, though largely they are exempt from many requirements imposed on other health plans, including consumer protections codified under the Affordable Care Act (ACA). This investment follows prior action taken by this Administration to promote association health plans.
- Reductions in overall program funding. Proposes to cut $920 billion over 10 years from Medicaid.
Eligibility and Enrollment
- Requires work and community engagement initiatives. To receive Medicaid benefits, the budget proposes requiring all able-bodied, working-age, Medicaid-eligible individuals to find employment, participate in job training, or volunteer. It estimates this will generate $152.4 billion in savings over 10 years.
- Gives states the ability to change certain program elements and eligibility determination processes. Proposes to allow states to implement certain changes to Medicaid benefits and cost sharing, including making non-emergency medical transportation optional and allowing states to use state plan authority rather than a waiver to increase copayments for nonemergency use of emergency departments. Proposes to permit states to apply asset tests for individuals who are financially eligible for the program through the Modified Adjusted Gross Income (MAGI) standard. States would also be permitted to conduct eligibility redeterminations for MAGI-eligible individuals more frequently, to align with the soon-to-be released proposed rule on Medicaid eligibility determination processes.
- Requires documentation of immigration status prior to receipt of Medicaid. Proposes that before they receive Medicaid coverage, individuals must provide evidence of citizenship or satisfactory immigration status. While states will still be allowed to provide coverage during a reasonable opportunity period, they will not be able to receive federal match for these individuals during this time. This is estimated to save $2.6 billion over 10 years.
- Reduces maximum allowable home equity for Medicaid eligibility. Eliminates states’ ability to set a higher home equity limit for individuals seeking long-term care coverage through Medicaid, which is estimated to save $34.3 billion over 10 years.
Payments and Financing
- Changes the ACA’s financing for the expansion population. Indicates that it will end the “…financial bias that currently favors able-bodied working adults over the truly vulnerable.” While no specific details were provided about how precisely this would be accomplished, language in the budget brief references allowing states with expansion populations to elect a block grant or per capita cap to finance their coverage. No details were provided as to whether the existing federal match rate for expansion adults would be reduced, to what base rate that reduction would be, or when this change would be enacted by Congress.
- Reduces the federal match rate for Medicaid-eligible workers. Reduces the federal match rate for Medicaid-eligible workers from 75 percent to 50 percent by FFY 2024.
- Prohibits Medicaid payments to public providers in excess of costs. Proposes to limit Medicaid reimbursement for health care providers operated by a governmental entity to no more than the actual cost of providing services to Medicaid beneficiaries.
- Increases transparency of Medicaid financing and supplemental payments. Supports the finalization of a recently proposed rule that would require more data on states’ financing of Medicaid supplemental payments.
- Gives the Centers for Medicare & Medicaid Services (CMS) increased ability to recoup Medicaid improper payments and recover Medicaid and Children’s Health Insurance Program (CHIP) overpayments. Permits CMS to issue disallowances for payments made due to noncompliance with provider screening and enrollment requirements and collect overpayments made to states for ineligible or misclassified Medicaid beneficiaries.
- Continues Medicaid Disproportionate Share Hospital (DSH) reductions. Current law reduces Medicaid DSH allotments between FFY 2020 and FFY 2025. The budget proposes to continue DSH allotment reductions through FFY 2030 and estimates this will save $32.4 billion over 10 years.
- Modifies Institutions for Mental Diseases (IMD) payment exclusions. Allows states that meet certain criteria and requirements to receive federal Medicaid reimbursement for covered services provided to adults with serious mental illness living in IMDs, which is estimated to cost $5.4 billion over 10 years. Also, if a group foster home is considered a qualified residential treatment program (QRTP) and qualifies as an IMD, these QRTPs would be exempted from the IMD payment exclusion.
Other Proposed Medicaid Changes
- Eliminates Money Follows the Person (MFP) evaluation and reduces financing for the program, which provides funding to states to help transition people to home and community-based settings from institutions.
- Creates new MFP state plan option. Provides states the ability to establish an MFP program with an enhanced federal match for the first five years of services if they spend less than 50 percent of their long-term service and supports funding on home- and community-based services in the previous year.
- Extends Medicaid managed care waivers. Permits states to grandfather managed care authorities in waivers and demonstration programs if a waiver has been renewed once before and there are no substantive changes.
Proposals Affecting Individuals Dually Eligible for Medicare and Medicaid
- Coordinates review of Dual Eligible Special Needs Plans marketing materials. Allows for joint state and CMS review of marketing materials for Dual Eligible Special Needs Plans.
- Revisits Part D special enrollment period for dually eligible individuals. Clarifies the special enrollment period (SEP) for Medicare Part D to allow CMS to apply the same annual election process for all eligible individuals, but maintains the ability for dually eligible beneficiaries to opt into integrated care programs or to change plans following auto-assignment.
Children’s Health Insurance Program
- Creates a shortfall fund to replace Child Enrollment Contingency Fund. Calls for creation of a shortfall fund containing unused annual appropriations that could be distributed to states that need additional CHIP funding. This fund serves to replace the Child Enrollment Contingency Fund as of FFY 2022; the Performance Bonus fund would also be eliminated that year.
- Aligns Medicaid and CHIP policies on suspending and reinstating coverage for enrollees under age 21 who are incarcerated and released from custody. The Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act contains a policy requiring states to suspend coverage for youth under age 21 enrolled in Medicaid who are incarcerated instead of terminating coverage. The budget proposes extending this requirement to CHIP programs with the goal of providing access to health coverage upon release.
- Increase in Maternal and Child Health Services (MCH) Block Grant funding to offset reduction in other HRSA-funded programs to support children. Proposes a $60 million increase over FFY 2020 levels for the Title V MCH Block Grant, however this increase is combined with $97 million in reductions in other HRSA-funded programs for children, including: Sickle Cell Disease Treatment Demonstration, Autism and Other Developmental Disabilities, Heritable Disorders in Newborns and Children, and Emergency Medical Services for Children. This assumes states will fund the types of activities these programs previously funded through their MCH Block Grant programs.
- Continue funding and disseminating research into neonatal abstinence syndrome. Proposes $2.25 million to continue the Centers for Disease Control and Prevention’s (CDC) work to investigate neonatal abstinence syndrome and share findings to improve care and outcomes for children and families.
- Maintains Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program. Maintains MIECHV program at current levels.
- Level funding proposed for Children’s Mental Health Services grants. The budget proposes $150 million to the Substance Abuse and Mental Health Services Administration (SAMHSA) – consistent with FFY2019 funding – for Children’s Mental Health Services for state, tribes, and communities through competitive grant awards that promote collaboration between juvenile justice, child welfare, and education systems. Up to 10 percent of these funds are proposed for a new demonstration initiative that will target those at risk for developing serious mental illnesses.
The overall budget proposes $116 million for the President’s Improving Maternal Health in America Initiative. The initiative focuses on health outcomes for all women of reproductive age by improving prevention and treatment, healthy pregnancies and births by prioritizing quality improvement, health futures by optimizing post-partum health, and improved data and bolster research to inform interventions.
- Promotes state innovations to improve maternal health outcomes. Expands the State Maternal Health Innovation Grant Programby $30 million, the Alliance for Innovation on Maternal Health (AIM) by $10 million, and the Rural Maternity and Obstetrics Management Strategies (RMOMS) program by $10 million. There is a $50 million increase ($80 million total for FY 2021) to HRSA to improve the overall quality of maternal health services.
- Advances state efforts to combat maternal mortality and morbidity. The proposed budget invests $24 million in the CDC to expand maternal mortality review committees to all 50 states and DC.
- Allows states to provide postpartum coverage for pregnant women with substance use disorders (SUDs). Proposes to make it easier for states to offer pregnant women diagnosed with SUD full Medicaid benefits for one year postpartum, which would cost $205 million over 10 years.
- Maintains funding for family planning and health related services. Provides $286 million for the Title X family planning program but prohibits certain entities that provide abortion services from using the funding.
Prevention and Public Health
Substance use disorder and the opioid epidemic
- Increases grant funds to states for SUD prevention, treatment, and recovery:Adds $85 million over the FY20 budget for State Opioid Response (SOR) grants, bringing the total to $1.6 billion, and includes language to emphasize opportunities to expand activities to address methamphetamine and other stimulants. This increase, however, is coupled with decreases or total elimination of other SUD-related grants, which may lead to states re-aligning their existing activities into this grant.
- Reduces substance use prevention funding to states:Strategic Prevention Framework (SPF) grants to states have been reduced by over $109 million, eliminating all by SPF prescription drug funds, which were maintained at $10 million. This appears to assume that state prevention activities can be picked up in the increased SOR grant funds.
- Eliminates Medication-Assisted Treatment for Prescription Drug and Opioid Addiction (MAT-PDOA) grantsas part of the Targeted Capacity for Expansion (TEC) program that is designed to fill gaps in treatment capacity for communities. This $89 million reduction appears to assume that these treatment activities can be picked up in the increased SOR funding. Other funding within the program for peer-to-peer grants and special projects will be maintained at $11.2 million.
- Eliminates $30 million in federal funding for Screening, Brief Intervention, and Referral to Treatment (SBIRT)program grants, shifting payment for these services to states and third-party payers.
- Maintains funding for the Recovery Community Services Programs (RCSP)that will continue and enhance efforts to develop recovery networks and collaboration with peer organizations.
- Maintains level funding to states through the Substance Abuse Prevention and Treatment Block Grantat a total of $1.9 billion.
- Maintains level funding of $8.7 million for Opioid Treatment Programs (OTP) that provide methadone– funding also supports training and technical assistance for providers.
- Continues grants to nonprofitComprehensive Opioid Recovery Centers: Maintains $2 million in grants to nonprofit SUD treatment organizations as part of a four-year project that provides a continuum of treatment services.
- Supports State and Tribal Youth Implementation grants: Maintains nearly $30 million to fund 11 new grants and continue 35 existing grants that support states and tribes to address gaps in SUD treatment for youth and caregivers.
- Maintains level funding for justice-involved populations with SUD: Provides $89 million for 54 new and 92 existing drug courts and also supports 11 new and five existing Offender Reentry Program grants.
- Maintains Building Communities of Recovery programswith $8 million for 20 new and eight continuing grants that support recovery services.
- Maintains level funding to prevent and reverse overdoses:
- Provides a continued $41 million in funding to the First Responder Training program through $41.0 million in grants to states, localities, and tribes for purchasing and training of overdose-reversal drugs.
- Provides a continued $12 million through grants to states to purchase and distribute naloxone kits and provide overdose reversal training.
- Funding for Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) Act activities
- $5 million to fund hospitals and emergency departments for alternative pain management treatments intended to decrease opioid prescribing;
- $4 million to train emerging prescribers via 117 grants to medical schools and teaching hospitals to develop curricula to educate students on MAT and providing SUD treatment;
- $4 million to implement post-overdose bridges to SUD treatment; and
- $4.5 million project to 15 select states, to provide an enhanced FMAP (80 percent) for five of those states for some SUD services.
- Supports a tool that warns about emerging issues:Adds $10 million for the Drug Abuse Warning Network (DAWN), a surveillance system that can warn about emerging SUD and behavioral health crises.
- Increase of $18 million, for a total of $25 million, for the Assertive Community Treatment for Individuals with Serious Mental Illness program to help 33 communities establish, maintain, or expand efforts to engage patients with serious mental illness through emergency and inpatient settings.
- $25 million for Assisted Outpatient Treatment to expand SAMHSA’s existing grant program. The program has achieved favorable outcomes in reductions in hospitalization, emergency department visits, and substance use, and increases in mental health functioning.
- $35 million increase, including a new 5 percent set-aside, in all states and territories to build crisis systems for individuals in mental health crisis. States will continue to spend at least 10 percent of the funds on early interventions for those experiencing a first episode of psychosis.
- $225 million ($25 million increase) for certified community behavioral healthcenters –clinics certified by SAMHSA and funded through a prospective payment model, similar to federally qualified health centers (FQHC).
- Provides direct support for rural communities to address SUD needs:Maintains level funding for the Rural Communities Opioid Response Program (RCORP), providing a total of $110 million in grant funds to communities to address prevention, treatment, and recovery while building infrastructure and capacity. Adds new pilot programs to address the unique and emerging needs of rural communities responding to the opioid and SUD crises.
- Supports infectious disease prevention and surveillance in high-risk regions:Increases existing funding by $48 million for activities that reduce the transmission of infectious disease and the incidence of potentially fatal cardiac and skin infections as a consequence of the opioid epidemic.
- Maintains $475 million and builds on existing support for data capacity in states and other jurisdictions: Through Opioid Abuse and Overdose Prevention funding, CDC will continue to support states in tracking both fatal and non-fatal drug overdoses and prescribing patterns.
- Shifts Drug-Free Communities funding to CDC: Moves $100 million from the Office of National Drug Control Policy (ONDCP) that was previously administered by SAMHSA as prevention grants, into the CDC budget.
- Proposes a $350 million block grant program for states to address chronic disease priorities, including tobacco control and prevention, nutrition and physical activity, heart disease and stroke, diabetes, and arthritis.
Chronic disease prevention and management
- Supports training for behavioral health workforce:Maintains $139 million within Behavioral Health Workforce Development (BHWD) Programs that train professionals in under-served communities (including at health centers) and supports an addiction medicine fellowship.
- Expanded support for the Ending the HIV Epidemic initiative:
- $137 million (an increase of $87 million) for HIV prevention services in FQHCs, including pre-exposure prophylaxis (PrEP), outreach efforts, and care coordination in approximately 500 community health centers.
- Additional $95 million allocated for the Ryan White HIV/AIDS program.
- Cuts CDC’s total discretionary budget authority by $1.289 billion, compared to 2020 funding levels.Program-level cuts would be $175 million. Other changes include:
- A cut of $427 million for chronic disease prevention and health;
- An increase of $40 million for influenza monitoring and prevention; and
- The creation of the America’s Health Block Grant as a means of reforming state-based chronic disease programs.
- Proposes a new user fee on e-cigarettes. The budgetcontains $812 million in user fees to support FDA’s anti-tobacco programs, which includes a new $100 million fee to be collected from e-cigarette manufacturers. It also proposes to move the FDA’s Center for Tobacco Products to a newly created agency within HHS.
Programs Addressing Social Determinants of Health
Some components of the HHS and Department of Housing and Urban Development (HUD) budgets could affect states’ abilities to address health through housing and other social determinants of health initiatives.
- Cuts HUD funding by $8.6 billion — a 15.2 percent decrease from the 2020 enacted budget.
- Proposes changes to federal investment in rental assistance.The budget request would increase rental assistance to $41.3 billion, which would maintain services for all currently enrolled HUD-assisted households. Uniform work requirements would be placed on “work-able” households.
- Adds funds to the Rental Assistance Demonstration program, which supports transitioning public housing to housing voucher and project-based rental assistance units.
- Increases funding for lead-safe healthy homesby $69 million to $240 million.
- Supports reductions to existing programs:
- Cuts $80 million from Housing Opportunities for People with AIDS, and
- Would eliminate the Community Development Block Grant.
- Proposes policy and financial changes for safety net programs.The budget cuts $15.3 billion from the Supplemental Nutrition Assistance Program (SNAP) and cuts approximately $1.1 billion from the Temporary Assistance for Needy Families (TANF) block grant. Would apply consistent work requirements for federally funded public assistance programs, including SNAP, Medicaid, and TANF.
Long-term services and support
- Cuts family caregiver services by $35 million, which provides grants to states and territories to fund various supports that help family caregivers care for older adults in their homes.
- Cuts state councils on developmental disabilities by $22 million, which are charged with identifying the most pressing needs of people with developmental disabilities.
- Reduces National Institute on Disability, Independent Living, and Rehabilitation Research by $21.6 million.
- Cuts state health insurance assistance programs by $16 million, which are state programs that receive federal funding to provide free, local health coverage counseling to people with Medicare.
Health Care Infrastructure and IT
- Supports rural health care infrastructure. Authorizes up to $2.5 billion for loans to assist communities with developing or improving public services in rural areas, including rural health clinics. Allows critical access hospitals to voluntarily convert to rural stand-alone emergency hospitals, which would enable those facilities to draw in Medicare payments at emergency department rates without the additional burden of maintaining in-patient beds.
- Promotes price transparency and health IT interoperability. Finances several agencies to enable implementation of policies related to the President’s Executive Order to encourage price transparency. This includes $51 million to the Office of the National Coordinator for Health Information Technology for efforts to advance interoperability, electronic information sharing, and to align patient health and cost information.
- Enforces conscience protection laws. Makes permanent the Weldon Amendment, which prohibits government agencies — including state agencies that receive federal money — from discriminating against entities or individuals who refuse to provide or refer for abortions. Expands the authority of the Office of Civil Rights enforce the Weldon Amendment.
Other proposals addressed in the Administration’s budget include:
- Access to better care at lower costs;
- Personalized care;
- Protection for pre-existing conditions;
- Policies to encourage choice and affordability of coverage; and
- Policies to address surprise medical bills.
Introduction by Trish Riley, NASHP Executive Director
For decades, the proposal to convert the Medicaid program from an open-ended entitlement to capped funding as a “block grant” has been a fiercely argued policy, legal and ideological debate. Opponents contend that capped financing violates the foundation of Medicaid as an entitlement and would severely impair states’ abilities to address needs because there is no provision to adjust for medical and prescription drug cost increases nor to accommodate natural disasters or economic downturns that cause more people to need Medicaid’s protections.
Proponents argue that a block grant, much like the Children’s Health Insurance Program, provides more flexibility to states to design their programs and constrain cost growth. Here, the Trump Administration takes a new tact, using the Section 1115 waiver authority, to test the viability of a block grant concept on a subset of Medicaid enrollees.
The proposal does not address rising health care costs but does contain a “special circumstances adjustment” that could address unforeseen circumstances that are out of a state’s control. The guidance could encourage those states that have not expanded Medicaid eligibility to childless adults eligible under the ACA to do so. It could also allow states that have expanded eligibility to roll back current levels of coverage.
Because Section 1115 waivers are designed to test innovation in the Medicaid program, the Administration proposes a means to test the efficacy of a block grant, limiting its reach to a subset of Medicaid enrollees. NASHP’s Anita Cardwell walks us through what CMS’ new rules are proposing and notes that legal challenges are inevitable. Should the Administration succeed in approving these waivers, rigorous, independent evaluation will be critical for policymakers to assess its impact.
New guidance from the Centers for Medicare & Medicaid Services (CMS) would allow states to receive part of their federal Medicaid funding through a capped financing model. Through CMS’ Healthy Adult Opportunity (HAO) option, states would be able to seek approval through a Section 1115 waiver to accept a set amount of federal Medicaid funding for certain eligible adults.
While the option is limited to a specific portion of the Medicaid-eligible population, this is a significant change from Medicaid’s current structure in which the program operates as an open-ended entitlement and states receive federal matching payments based on their Medicaid program spending without a predetermined funding limit. The following describes some of the key elements of the HAO model.
The HAO model targets adults under age 65 who are not eligible for Medicaid due to:
- Disability or need for long-term care services and supports,
- Eligibility under a state plan designation.
States could use the model to cover adults who would be eligible through the Affordable Care Act’s (ACA) Medicaid expansion, but states will also be permitted to use the initiative to cover other groups of individuals. For example, states could use the HAO demonstration to provide coverage for:
- Individuals with severe mental illness;
- Those needing substance use disorder treatment; or
- Individuals with HIV/AIDS.
States will also be allowed to set the income eligibility standard under the demonstration, and the guidance permits states to require an asset test for individuals seeking coverage under the HAO model. However, for states to receive the enhanced federal match available for the ACA Medicaid expansion population, states will need to have an income standard of at least 133 percent of the federal poverty level, will not be able to apply an asset test, and will not have the ability to cap enrollment. But the guidance does not explicitly indicate that enrollment cannot be capped if a state agrees to accept a lower match rate.
States that pursue this new option will receive a capped amount of federal Medicaid funding for the populations covered under the HAO model. States’ spending would be matched by the federal government, but only up to a certain limit, and states would assume the risk for any expenditures for the demonstration population that exceed the defined amount. CMS is providing states with two financing options to select — an aggregate cap model or a per capita cap model.
States that cover new populations that they lack data for, such as the expansion population, will initially need to use the per capita cap model. CMS will calculate a per enrollee base amount for each eligibility group that is included in the demonstration using previous year expenditures, or if those are not available then it will be based on national and regional expenditures. CMS will trend the base amount for each group forward to the demonstration year, multiply each of these amounts by the number of enrollees for that year to account for changes in enrollment, and then total them to establish an overall per capita cap.
Under the aggregate cap model, CMS will determine a base year amount using prior expenditures based on the populations and services included in the demonstration, and will trend this amount forward to each demonstration year, but without consideration of enrollment changes. If a state would like to pursue the aggregate cap option for a population that has not been covered previously, they must first operate their HAO demonstration under the per capita cap model for at least two years. The guidance requires states using the aggregate cap model to annually spend at least 80 percent of their aggregate cap amount on health services.
Unlike the per capita cap model, states that use the aggregate cap approach that are able to keep costs below their annual cap and meet certain reporting and performance criteria may be eligible to reinvest a part of the savings into their Medicaid programs. These reinvestments must be determined to be likely to promote Medicaid program objectives and could include providing Medicaid services for groups not covered by the state plan, paying for services that are not in the state plan – such as pre-vocational services, initiatives to improve care quality and access, and allowable benefits and services designed to address certain social determinants of health.
In some cases, states could use the shared savings to support existing state-funded programs, such as a statewide tobacco cessation program. CMS also notes that states can use any annual savings to offset expenditures that exceed the cap for the subsequent three demonstration years. Also, while the guidance indicates that CMS will make changes to the base amount or annual caps to “adjust for state flexibilities that could significantly affect enrollment to ensure that states do not achieve savings from disenrolling individuals,” it does not provide further details about how this type of adjustment would be implemented.
Rather than the traditional Medicaid benefit package, states that opt to pursue the HAO initiative will be able to structure a benefit package that aligns with private market coverage, although they will need to include at a minimum the benefits in the Essential Health Benefit (EHB) package. This means that states will not be required to provide services such as non-emergency medical transportation (NEMT) and coverage of early and periodic screening, diagnostic and treatment services (EPSDT) for individuals ages 19 to 20 included in an HAO demonstration. However, states could opt to provide these services, along with others, in addition to EHBs.
Prescription Drugs and Medicaid Drug Rebate Program
To address prescription drug costs, the HAO option will permit states to have a closed drug formulary that aligns with formularies provided through exchange coverage in the commercial health insurance market. The guidance stipulates that states provide coverage of certain drugs for individuals with HIV or behavioral health conditions.
However, although states would be allowed to omit coverage of certain prescription drugs, states would still be able to receive rebates through the Medicaid Drug Rebate Program. States could also make arrangements with manufacturers for supplemental rebates by including the manufacturers’ drugs on the state formulary.
Other Key Elements of the HAO Model
In its guidance, CMS indicates that it is “offering flexibilities currently available to states in a comprehensive suite of pre-packaged waiver authorities.” CMS notes that although its intent is to provide states with a “menu” of program design options, each demonstration will be approved on a case-by-case basis. States will be able to implement program elements to the populations covered by the demonstration, such as:
- Charging higher premiums and cost-sharing requirements not allowed under traditional Medicaid for most individuals in the HAO model (individuals’ aggregate out-of-pocket costs could not be more than 5 percent of income, measured on a monthly or quarterly basis), and suspending enrollment for nonpayment;
- Including conditions on eligibility, such as work requirements;
- Choosing to waive retroactive coverage and hospital presumptive eligibility requirements; and
- Conducting eligibility renewals before the standard 12-month renewal period to align with the open enrollment period of exchanges.
States operating under an HAO demonstration will also be allowed to implement certain changes without additional federal approval, unless the change has the potential to “substantially” impact enrollment. These could include programmatic changes to benefits, premiums, and copayments, or certain administrative modifications, such as changes in provider payment rates.
States that already have an approved 1115 waiver to cover populations that would be eligible for coverage through the HAO model would be permitted to transition those waivers into HAO demonstrations – for example, a state with an existing waiver to provide coverage to the Medicaid expansion population group.
Delivery Systems, Payment Models, and Managed Care
States seeking to participate in the HAO demonstration will be encouraged to implement payment and delivery system reforms to “improve the effectiveness of coverage, improve health outcomes and reduce the cost of care.” To align with Medicare and commercial payers, CMS suggests that states consider incorporating arrangements and strategies like ones established through the Center for Medicare & Medicaid Innovation (CMMI) that have demonstrated promising outcomes.
States will generally be allowed to use any mix of fee-for-service and managed care delivery systems, and as long as certain guidelines are met states will have the ability to modify these arrangements during the demonstration. If states are serving the HAO demonstration population through managed care, they will generally have to comply with specified statutory requirements related to beneficiary protections and decision making, access to services, and assessing program administration and delivery system quality. But states will be allowed to suggest their own strategies for ensuring network adequacy, access to care, and availability of services, and will also not have to request prior federal approval of managed care rates.
Monitoring and Evaluation
States participating in the HAO demonstration will be required to have a written strategy to evaluate care access and quality, and the health outcomes of enrollees, using measures from the CMS Adult Core Set. CMS is also expecting HAO demonstration states to report on certain performance measures related to enrollment, retention, access to care, and financial management on a quarterly basis. Also, participating states are expected to have an independent assessor provide suggestions for changes that could be made during the demonstration period.
Legal challenges are expected because, as noted by many analysts and highlighted in a recent letter from some House Democrats, there are questions about whether CMS has the ability to use the 1115 authority to change Medicaid’s financing in this way. The HAO demonstration model may also be challenged on the grounds that it does not promote the overall objectives of the Medicaid program.
States considering the model will need to carefully weigh the potential implications, because choosing to accept limits on federal Medicaid funding — even for only a portion of the program’s eligible individuals — introduces financial risk for states. For example, state Medicaid program spending regularly fluctuates as economic shifts occur, new treatments become available, or states experience public health emergencies or natural disasters. While the guidance does contain a “special circumstances adjustment” that would allow states to propose updates to address these types of situations, this would require states to undertake additional negotiations with CMS.
The HAO model could be appealing to the 14 states that have not implemented Medicaid expansion because it would provide them with greater flexibility to manage their Medicaid program benefits and impose certain enrollee requirements. If these states do pursue the HAO initiative to expand Medicaid, while more individuals would gain health coverage and it would meet EHB standards, the coverage provided would be less robust than that provided to traditional Medicaid expansion enrollees and individuals would likely face other enrollment restrictions. One of the 14 non-expansion states that has expressed interest in this approach is Oklahoma, whose governor announced his intention to pursue the concept to expand Medicaid with the inclusion of work requirements and premiums. However, his proposal could be in conflict with Oklahoma voters’ views, if they pass an initiative on the ballot this year to implement traditional Medicaid expansion. Another state, Tennessee, already has a proposal pending with CMS that requests to implement a “modified block grant” model that would allow for federal funding increases if enrollment rises, along with requests for certain program flexibilities. However, Tennessee’s plan differs from the recent guidance as it does not propose to implement the ACA’s Medicaid expansion, and instead would apply the block grant funding model to enrollees who are low-income parents, children, and individuals with disabilities.
The governor of Alaska – a state that has already implemented expansion – has indicated interest in seeking a block grant financing model and commissioned a study on the issue, so there may be interest in the HAO demonstration among policymakers there.
NASHP will continue to track and report on state activity related to the HAO model in the coming months.
The Trump Administration’s Safe Importation Action Plan lays out two pathways to support importation of lower-cost prescription drugs, but raises questions that need responses.
In Pathway 1, the Administration gives a nod to state efforts to create wholesale importation programs for certain high-cost drugs, mirroring the provisions of current state efforts and federal requirements. That’s good news for states, particularly for Vermont, Florida, Colorado, and Maine that have enacted laws and are working together on implementation strategies, but two issues arise.
First, the plan requires the federal government to initiate rule-making – a process that can take years and will delay state action. This is particularly frustrating because the federal government has had about three decades to issue rules after enactment of the law that allows importation.
Second, the plan includes a “poison pill,” which requires that drugs imported under the program must have originally been intended for the Canadian market. The federal law that initially established the importation program did not include such restrictive language. Rather, it simply authorized the importation of prescription drugs from Canada. This is an important distinction. The wholesale drug importation program requires that current US Food and Drug Administration (FDA) protocols be followed. That means that drugs coming from any country through Canada could be imported, provided they meet the same quality, labeling, and approval standards as drugs sold today in the US market – the majority of which are already imported by the pharmaceutical industry.
The drug industry is a global one – 40 percent of drugs sold in the United States today come from other countries and 80 percent of the active product ingredients are made in other countries. The wholesale program envisioned in Pathway 1 will follow all the current FDA rules to assure authenticity, approval status, and safety of the drugs, whether or not the drugs were originally intended to be sold in Canada. Clarifying that the program will comply with current law to import drugs from Canada could alleviate any concerns Canada has about potential drug shortages.
But these are resolvable issues and the Administration has made clear it seeks comments on its plan.
Pathway 2 offers guidance to the pharmaceutical industry and requires no rule-making process. It provides manufacturers the ability to import or reimport FDA-approved versions of drugs they sell in foreign countries to the United States by allowing them to place a new code on the drug and circumvent some of their own costly supply chain. Arguably, drug manufacturers have been legally authorized to implement what is proposed in Pathway 2 for more than 30 years, since the enactment of the Prescription Drug Marketing Act of 1987, yet they have not done so. The Administration’s plan says that manufacturers have stated they have not lowered costs through importation because of their own private contractual obligations with other parties in their own supply chains. Pathway 2 appears to propose a means for the industry to move drugs more directly from their own foreign manufacturers to US markets to create savings in their distribution costs.
Pathway 2 includes none of the detailed provisions assuring safety to which state programs would be held, although it relies on “applicable existing safeguards through the conventional supply chain,” nor does it include the language to which states are held that requires significant savings to consumers or testing of the imported drugs. If the only savings come through lower distribution costs, those savings could be significantly less than through state importation programs – which results in continued higher costs to US consumers.
State models show importation saves 60 to 75 percent off US prices, even after applying a hefty 45 percent markup for supply chain and administrative costs. How would the Department of Health and Human Services, FDA, and manufacturers assure similar consumer savings? Importantly, the Administration asserts that if costs can be lowered significantly through the manufacturer Pathway 2, there may be less need for Pathway 1. In order to make that determination, one needs to compare savings between the two approaches. It may be useful to launch the two pathways simultaneously and initiate a state pilot program now to collect comparable data to make that comparison.
The Administration has initiated a plan to test importation as a means to lower drug prices and states will likely welcome that signal, and any other actions to lower drug prices now.
Explore National Academy for State Health Policy’s Drug Importation Model Legislation and Toolkits for more information about states’ importation of drugs.
The Trump Administration is expanding the availability of alternatives to Affordable Care Act-compliant health insurance. Rules to expand association health plans and short-term limited duration health plans are imminent. So what’s a state to do to prepare consumers and insurance markets for these alternative plans?
The Administration asserts these alternatives will provide choice and lower-cost products in the market, but opponents argue:
- Consumers may be unaware that these products generally provide fewer benefits; and
- The alternatives could siphon young, healthy enrollees out of ACA-compliant plans, causing an increase in premiums in that market in order to cover a smaller, sicker risk pool.
|Listen to the webinar, Ministries, Association, and Short-Term Health Insurance Plans – What’s a State to Do? featuring experts from Georgetown University’s Center for Health Insurance Reform.|
On May 29, 2018, with support from the Robert Wood Johnson Foundation, the National Academy for State Health Policy (NASHP) held a well-attended webinar that explored what options states have to respond to these developments featuring experts from Georgetown University’s Center for Health Insurance Reform (CHIR).
Health sharing ministry plans currently exist across the nation. They allow certain religious communities to charge a monthly contribution to members who then share the responsibility for members’ health care costs — instead of providing traditional insurance. The Affordable Care Act (ACA) exempted these programs from the individual mandate and 30 states currently exempt them from any state insurance regulations. Although no independent data source tracks sign-ups, enrollment in ministry plans appears to have grown from fewer than 200,000 to over 1 million, and these programs are looking more and more like private insurance, for example some advertise during open enrollment and pay brokers.
What states can do: Consumer confusion may result as ministry plans grow and are marketed to consumers. CHIR experts recommend these tools for states to consider:
- Establish reporting requirements to collect data on ministries’ sales to assess their impact on insurance markets;
- Issue consumer alerts educating consumers about the limitations of these programs;
- In states that do not regulate them, begin monitoring them for violations, such as use of brokers, facilitating payments between members, and failure to apply religious tests for membership; and
- Take action against those that operate illegally as insurers.
Association health plans (AHPs): Historically, AHPs have had a long history of financial instability, insolvencies, and fraud. States generally have a better track record than the federal government in regulating them. Rules to expand the availability of AHPs are expected soon but the proposed rules would make it easier for employers to band together and be treated as a large group plan. The proposal would allow self-employed consumers, who are now covered in ACA’s individual market, to enroll in an AHP. The rules also allow AHPs to design different benefit plans and pricing strategies that do not comply with ACA plan requirements. Here again, the plans could provide a lower-cost, lower-benefit option that could attract more young and healthy to enroll and leave the individual market. Whether states will retain jurisdiction over these plans is a key concern of state policymakers who await the final rule. CHIR experts outlined a series of options states could pursue to address AHPS.
What states can do about AHPs:
- Level the playing field by requiring compliance with some or all individual or small group market rules;
- Restrict creation of new AHPs, a strategy employed by California, where only a handful of AHPs remain;
- Limit membership to small businesses, such as employers with at least one employee;
- Reduce the risk of market segmentation by assessing a fee on AHPs and invest the revenue in high-risk reinsurance pools; and
- Assert jurisdiction over out-of-state AHPs.
Short-term limited duration plans: Once the AHP rule is issued, the Administration is expected to follow up with rules related to short-term limited duration plans. Designed to fill temporary gaps in coverage, these plans are not considered individual health insurance and are currently exempt from ACA standards. They often exclude some essential health benefits like maternity or prescription drugs and generally exclude coverage for pre-existing conditions. Currently, plans are limited to a three-month coverage limit, but the proposed federal rule governing short-term plans would allow extensions.
What states can do about short-term plans: In the webinar, CHIR experts detailed how some states are regulating these plans and outlined strategies for states to consider.
- Limit the duration of these plans to three or six months, and prevent renewals by imposing coverage limitations, such as restricting individual coverage to one short-term plan purchase per year;
- Prohibit waiving health status underwriting to people already enrolled;
- Level the playing field by requiring compliance with some or all individual ACA market rules, such as requiring coverage of pre-existing conditions;
- Impose a fee on short-term plan to be applied to reinsurance funds;
- Prohibit the sale of these short-term plans to people who are eligible for ACA marketplace coverage; or
- Ban short-term plans or use regulatory authority to define, limit duration, and improve consumer protections.
As federal rules make alternative plans more available and in the absence of the individual mandate compelling enrollment, state policymakers need to consider these plans’ impact on the individual market. Policymakers will weigh the promise of more affordable coverage with fewer benefits against the risk of market segmentation and rising costs in the individual ACA-compliant market. They will consider how to make sure that consumers have the transparency and information to understand new plan choices and protections should problems occur. NASHP looks forward to continuing its informative webinars with CHIR experts as federal rules are finalized and states, who hold responsibility for the individual market, consider their next steps.
Listen to the webinar, Ministries, Association, and Short-Term Health Insurance Plans Are Coming – What’s a State to Do?
The Trump Administration announced a series of initiatives earlier this month to reduce prescription drug prices and patient drug costs. Its American Patients First provides an outline of ideas for future action and reprises initiatives the Administration recently began. The Administration is now seeking public input on many of these proposed policies.
The Administration’s Request for Information (RFI) — entitled HHS Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs — seeks responses to questions about a great variety of policy ideas described in the Patients First document.
While there are many ideas on the table, the National Academy for State Health Policy (NASHP) is examining proposals to expand US Department of Health and Human Services (HHS) data collection and transparency. If expanded and made current, this data could bolster drug price transparency initiatives, which are of great interest to states and have been recently approved by several state legislatures.
As part of its initiative, the Administration took a significant step last week by rolling out its revised Medicare and Medicaid drug spending dashboards. To date, the dashboards provided information about past program spending, but now they include specific drug prices with annual price changes dating back to 2012. This is a great new transparency tool for states and researchers. In its RFI, the Administration asks how this drug price-tracking effort can be improved.
How to Improve Drug Cost Data
The current dashboards use insurance claims information. While offering a great tool for price transparency tracking, years-old information will not help states that are trying to develop strategies to lower drug prices in real time, as new state transparency efforts do. HHS should take additional steps to provide more current list prices and price changes on its website, which would create efficiencies for states. If that information was readily available, states would not have to recreate systems to track price increases and could instead focus their resources on collecting manufacturer price increase justifications as new state transparency laws now require.
The RFI also asks for input on improving other HHS data about prescription drug costs. For example, the RFI asks if it would more informative to publish information on national gross (before rebates) and net (after rebates) spending. Providing gross and net prescription drug spending would certainly assist the industry in demonstrating that their net prices are lower than the public understands. However, it will be even more helpful for the public to understand how prescription drug costs impact health care coverage and spending. Currently, the Centers for Medicare & Medicaid Services’ Office of the Actuary presents prescription drug spending as a portion of total national health expenditures (NHE).
NHE includes spending on health and medical research, long-term services and supports, and other important health expenditure categories. In the context of all national health spending, spending on drugs may not appear as significant as it does when examined in the context of personal medical service spending or health care coverage.
A separate, annual analysis of prescription drug spending as a percentage of federal, federal/state, and commercial health coverage spending would give policymakers an informative representation of the significance of prescription drug spending and spending increases where it counts most.
NASHP’s Pharmacy Costs Working Group will be responding to the HHS RFI about these and other ideas, and will feature the responses on its Center for State Rx Drug Pricing website.
On Monday, the Office of Management and Budget released the president’s FFY 2019 budget request that proposes $68.4 billion for health programs administered by the U.S. Department of Health and Human Services (HHS) – which is $17.9 billion less than 2017 funding levels. The budget proposal included an addendum designed to align the proposed White House budget with the recently passed Bipartisan Budget Act.
The following highlights some of the key components of the president’s budget proposal that could impact state health programs.
Affordable Care Act (ACA) and Insurance Markets
The proposed budget recommends the following changes to the ACA and insurance markets:
- Replace the ACA with the Market-Based Health Care Grant Program: This would be a block grant structure that state could use to implement their own insurance reforms, which was originally proposed by Sens. Graham, Cassidy, Heller, and Johnson. Under the Graham-Cassidy-Heller-Johnson bill, $1.176 trillion would be appropriated from FFY 2020 to FFY 2026 for states to explore experimenting with a variety of insurance reforms or affordability programs. The bill would allow greater flexibility over enrollment in copper (catastrophic health) plans in 2019 and provide greater flexibility over health savings accounts. (For more details see, NASHP’s summary).
- Phase out the federally-facilitated marketplace (FFM): Related to its proposed ACA repeal, the budget includes funding for “critical functions” and “wind down” of the FFM.
- Increase funding to support Association Health Plans (AHPs): Funding would be directed to the Employee Benefits Security Administration to develop policy and enforcement capacity to expand access to AHPs, which would not have the consumer protections that ACA plans currently have and may be exempt from state regulation. This reflects recently-proposed regulations designed to increase flexibility over the formation of AHPs.
- Fund the cost-sharing reduction (CSR) program: Funding would be available to cover CSR expenses from October 2017 through December 2019. The Administration discontinued payments to the CSR program in October 2017.
- Reduce the grace period for payment of health insurance marketplace premiums: This suggests that the 90-day grace period consumers are given to enact marketplace coverage be reduced to 30 days.
- Allow for state certification of qualified health plans (QHPs): The change is consistent with recent actions taken by the Administration to defer oversight and certification of QHPs sold through Healthcare.gov to states.
- Include mandatory funding for the Risk Corridor program: Funding would reconcile outstanding balances owed to insurers under the temporary Risk Corridor program established under the ACA.
The president’s FFY 2019 budget proposes:
- Overall program funding cuts: Proposes to cut federal Medicaid funding by $250 billion over 10 years.
- Repeal of ACA’s Medicaid expansion and targets Medicaid funding: Advocates repealing the ACA’s Medicaid expansion and supports state efforts to prioritize Medicaid dollars for the “most vulnerable” individuals.
- Medicaid financing changes: Indicates support for proposals to change the structure of Medicaid financing, similar to what the Graham-Cassidy bill proposed, such as implementing per capita cap or block grant funding models, which would be trended over time by the Consumer Price Index.
- Work and community engagement initiatives: Encourages state initiatives to implement community engagement initiatives for able-bodied adults enrolled in Medicaid.
- Prohibit Medicaid payments to public providers: Proposes to limit Medicaid reimbursement for health care providers operated by a unit of government to no more than the cost of providing services to Medicaid beneficiaries.
- Giving states the ability to change certain program elements and eligibility determination processes: Plans to provide states with additional flexibility over Medicaid benefits and cost sharing, including allowing states to use state plan authority to increase copayments for non-emergency use of emergency departments. Proposes to also allow states to make changes to Medicaid eligibility determination, such as counting savings, lottery winnings, and other assets.
- Mandated coverage of medication-assisted treatment: Requires state Medicaid programs to cover approved medication-assisted treatments for opioid use disorder. These investments are expected to reduce Medicaid expenditures over time.
- Resources for program integrity and data collection: Includes measures designed to address waste, fraud, and abuse, as well as forthcoming guidance from the Centers for Medicare & Medicaid Services (CMS) about improving data collection of Medicaid supplemental payments.
- Medicaid Disproportionate Share Hospital (DSH) payments: Continues DSH reductions by $8 billion per year from FFY 2026 to FFY 2028 (the Bipartisan Budget Act delayed DSH cuts until FFY 2020, and then increased scheduled payment reductions for FFY 2021 to FFY 2025 to $8 billion for each fiscal year).
Children’s Health Insurance Program (CHIP)
Although the recent Bipartisan Budget Act along with the earlier Jan. 22, 2018, continuing resolution (CR) extended CHIP funding until FFY 2027, the president’s budget includes some suggestions for policy changes to CHIP.
- Eliminates the 23-percentage point federal match rate increase earlier: Known as the 23 percent bump, the budget proposes to eliminate this entirely in FFY 2019. (This does not include the provisions that were in the Jan. 22, 2018, CR to continue the 23 percent bump in FFY 2018 and FFY 2019, phase it down to 11.5 percent in FFY 2020, and then return to the regular enhanced CHIP match rate in FFY 2021 and beyond).
- Limits enhanced CHIP match rate: Proposes to cap the increased CHIP federal match rate for states by restricting this enhanced match rate only for children in families with income up to 250 percent of the federal poverty level (FPL).
- Eliminates the maintenance of effort (MOE) in FFY 2019: Proposes to end the MOE that requires states to cover children with family incomes up to the same eligibility level that was in place in 2010. In contrast, the Bipartisan Budget Act continued the MOE requirements through FFY 2019 as in current law, and then through FFY 2027 for families with incomes up to 300 percent of FPL.
- Transitioning children from Medicaid to CHIP: Allows states to transition children ages 6 through 18 with family income between 100 to 133 percent of FPL (known as the bright line or stair steps kids) from Medicaid to CHIP, thus eliminating the current 133 percent FPL Medicaid eligibility level floor for children.
Prevention and Public Health Issues
The HHS budget request prioritizes the opioid crisis, mental illness, and infectious diseases. This is a shift from the former HHS Secretary’s priorities of addressing opioid/substance abuse, mental illness, and childhood obesity. Some other things of note are:
- Funding to address the opioid epidemic: Proposes $10 billion in funding in FFY 2019 to HHS to combat the opioid epidemic and serious mental illnesses.
- Prevention and Public Health Fund (PPHF): Proposes to eliminate the PPHF but backfill PPHF-funded programs with discretionary budget authority.
- Infectious diseases demonstration: Includes a $40 million request for a new demonstration program for five or more states or localities that focuses on eliminating multiple infectious diseases using screenings and referral to treatment. It would focus particularly on states/localities with infectious disease increases related to opioids.
- National Strategic Stockpile: Proposes to move the National Strategic Stockpile program out of the Centers for Disease Control and Prevention and house it in the HHS Office of the Assistant Secretary for Preparedness and Response.
Health and Housing Issues/Other Programs Addressing Social Determinants of Health
Some components of the HHS budget, as well as several aspects of the U.S. Department of Housing and Urban Development (HUD) budget, could affect states’ abilities to address health through housing and other social determinants of health.
- Decreases funding for HUD rental assistance programs: Proposes to reduce funding for HUD rental assistance programs by 11.2 percent over 2017. The administration maintains that this would be enough to support the currently-housed families, while shrinking the program over time. The addendum would provide $1.7 billion to maintain current levels of housing vouchers and exempt elderly and disabled households from “rent reform proposals.”
- More state and local resources will be necessary to develop affordable housing: Expects states to pick up a greater share of the tab for affordable housing, and does not request funding for the Public Housing Capital Fund, indicating that the responsibility for providing affordable housing should be more fully shared with state and local governments.
- Supplemental Nutrition Assistance Program (SNAP): Proposes cutting SNAP by $17 billion in FFY 2019 (and by $98 billion over the next five years), and proposes combining SNAP with a program that provides “100 percent American-grown foods” directly to households.
- Social Services Block Grant: The budget proposes to eliminate the Social Services Block Grant with the justification that it funds services that are currently funded by other sources and lacks the ability to track the impact of spending.
- Elimination of the Community Development Block Grant (CDBG) and Low-Income Home Energy Assistance Program (LIHEAP): Calls for the elimination of both programs.
- Increases rent payment requirements for certain individuals in subsidized housing: Calls for able-bodied people in affordable housing to pay a greater share of their income (more than 30 percent) toward rent, in an effort to encourage them to work more.
Medicaid Prescription Drugs
- Medicaid Drug Coverage Demonstration: Establishes a statutory demonstration authority to allow up to five states more flexibility in negotiating prices directly with drug manufacturers, rather than participate in the Medicaid Drug Rebate Program. Participating states will be required to include an appeals process so beneficiaries can access non-covered drugs based on medical need. The demonstration would exempt prices negotiated under the demonstration from best price reporting. (The budget estimates $85 million in savings over 10 years.)
- Clarify definitions under Medicaid Drug Rebate program: Clarifies the Medicaid definition of brand and over-the-counter drugs, as well as drugs approved under a biologics license application, by codifying existing regulations to ensure appropriate Medicaid drug rebates. (Estimates $319 million in savings over 10 years.)
Federal Health Safety Net Programs
- Health center funding: Provides $5.1 billion of discretionary funding for community health centers.
- Consolidates Graduate Medical Education (GME) funding: Proposes to consolidate GME funding into a new mandatory GME capped grant program, no longer allowing categorical funding for certain medical specialties.
- Reductions in nursing education funding: Proposes to reduce funding for nursing workforce development by $145 million from FFY 2018.
Proposals Affecting Individuals Dually Eligible for Medicare and Medicaid
- Coordinated review of Dual Eligible Special Needs Plan marketing materials: Allows for joint state and CMS review of marketing materials for Dual Eligible Special Needs Plans.
- Part D special enrollment period for dually eligible individuals: Clarifies the Special Enrollment Period (SEP) for Medicare Part D to allow CMS to apply the same annual election process for all eligible individuals, but maintain the ability for dually eligible beneficiaries to use an SEP to opt into integrated care programs or to change plans following auto-assignment.
Center for Medicare and Medicaid Innovation (CMMI)
- Additional funding for CMMI: Proposes an increase of $314 million in funding for CMMI for FFY 2019.
- Temporary Assistance for Needy Families (TANF) funding reductions: Proposes a 10 percent decrease in funding for the TANF program, and require states to use at least 30 percent of federal TANF and state maintenance-of-effort funds on the following: work, education, and training activities and work supports, including child care.
- Family to Family (F2F) Information Centers: Funds the F2F Health Information Centers, however not at the same rate as the recently passed CR, which included $6 million per year in FFY 2018 and FFY 2019, and an additional $1 million per year to establish centers in the territories and for Native American tribes. Under the president’s proposal, F2F centers would receive $1 million in FFY 2018 and $4 million each in FFY 2019 and FFY 2020.
- Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program: Includes an addendum that would fund the MIECHV program for FFY 2019 at the same level included in the recently passed CR at $400 million per year.
- Reforms for families with more than one child enrolled in the Supplemental Security Income (SSI) Disability Program: Creates a sliding scale for multi-recipient SSI families. For families with more than one child receiving SSI disability payments, they would still receive up to the current maximum benefit for the first child, but SSI payments for additional children would operate on a sliding scale that takes into the account the number of additional children.
- Paid parental leave and child care funding: Allocates money to establish a paid parental leave program, which would require states to provide parents six weeks of paid leave to new mothers and fathers and give states wide latitude to design and implement their programs. It also enhances funding for child care programs, including increasing the Child Care and Development Block Grant by $169 million over FFY 2018 levels.
- Individuals with Disabilities Education Act (IDEA): Proposes maintaining current level of funding ($12.8 billion) for IDEA formula grants to states to support special education and early intervention services.
- Women, Infants, and Children (WIC): Proposes maintaining current level of funding ($5.8 billion) for the Special Supplemental Nutrition Program for WIC.
Today we issue another brief in our series, Lessons from States: Questions for Policymakers, that puts a state lens on emerging proposals in the ACA repeal and replace debate. Our latest, Selling Health Insurance Across State Lines notes that over the last decade 21 states introduced legislation to sell across state lines, only five states enacted such laws, but no insurer has yet to offer. Why? Read the full publication here.
Support for this work was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.
Read the full brief here.
As President Trump and the new Congress take office in 2017, fundamental changes to alter the health care system will be debated. States have been actively engaged in health reform, embracing changes to insurance markets, new investments and innovation in delivery system and payment reform, as well as public health and coverage expansions that have produced the lowest rate of uninsured in the nation’s history. Informed by that action, states stand ready to work with the federal government.
The National Academy for State Health Policy (NASHP), a non-partisan organization of state health policy leaders, recognizes that extraordinary work is underway at both the state and federal level and among providers and other payers. Many groups will offer proposals to the new administration based on their considerable expertise but often with a narrow view aligned to a particular interest. NASHP convened leaders from across state governments, in both the executive and legislative branches, as part of a Summit to help identify cross-cutting issues that provide opportunities to advance health reform and transform our health system to one that lowers cost, rewards value, and improves health. Our belief is that improving health outcomes is more achievable when we align our talents and resources across multiple jurisdictions toward that common purpose.
We present here some key opportunities before the new administration that, if addressed, could maintain and accelerate state-based reforms in the pursuit of a higher performing health system and inform the current policy debate. Key opportunities include:
- Support State Innovation Through Sustained Federal Support
- Maintain Market Stability
- Support Payment and Delivery Reforms
- Improve Population Health Outcomes
We welcome the opportunity to work with the federal government to implement changes that will improve the effectiveness and efficiency of the health care system by rewarding value, reducing the cost trajectory, and improving health.
Read the full brief here.
Following this Leader’s Summit, held in October, NASHP convened our Academy members in a national issues forum teleconference to update each other and discuss emerging concerns and opportunities. See the latest blog from Trish Riley.