June 09, 2017

States Respond to Proposed PPACA Changes

Several states are considering safeguards against provisions in health insurance reforms passed by the House of Representatives that would cut Medicaid by nearly $900 billion, end the expansion of federal Medicaid funding to the states by 2020 and repeal federal requirements for essential health care insurance benefits in the Patient Protection and Accountable Care Act (PPACA).

Last week, the Connecticut Senate unanimously passed Bill 586, “An Act Expanding Mandated Health Benefits for Women, Children and Adolescents.” It would create a new mandate for the state’s health insurers to protect benefits that could be scaled back by congressional PPACA repeal and replace actions affecting those three groups. Despite bipartisan support, Bill 586 prompted immediate criticism from Democratic Gov. Dannel Malloy.

The Nevada legislature recently sent a bill to Republican Gov. Brian Sandoval to allow a buy-in option for Medicaid coverage. Individuals who qualify for tax credits under PPACA would be able to use those credits to buy into Nevada’s Medicaid program. Those who do not qualify for credits would still be able to buy in by paying for coverage themselves. The buy-in benefit mimics traditional Medicaid coverage terms, but would not cover emergency medical transportation.

States that plan to enroll new populations into Medicaid typically need a federal waiver, meaning the Trump administration will need to allow Nevada to significantly expand its program if the Medicaid buy-in bill becomes law. Under the proposal, the individual buy-in should not theoretically have an impact on federal costs.

Medicaid and Medicare are similar in the way they are publicly administered, but Medicaid benefits vary from state to state, and provider reimbursement rates fluctuate. In Nevada, Medicaid rates are lower than Medicare, making the proposal appear to be budget friendly for the state, but the proposal comes with the disadvantage of some providers possibly deciding not to accept Medicaid’s lower rates. Buy-in options are also disadvantageous to insurers since they cut into their market share of customers on the state’s insurance exchanges.