In this edition
- Open enrollment is mostly over; tax season has begun
- Oklahoma governor plans to pursue new Medicaid block grant opportunity
- HHS proposes federal health insurance rules for 2021
- HHS issues another extension for grandmothered plans
- Virginia Senate passes legislation that would require preventive benefits on short-term plans
- Legislation introduced in Washington State would create state-based premium subsidies
- New Mexico legislation would create a healthcare affordability fund
- Virginia Senate passes legislation to expand association health plans
- Two more states consider legislation to cap out-of-pocket costs for insulin
- Missouri task force recommends reinsurance, expanded access to catastrophic plans
Open enrollment is mostly over; tax season has begun
Open enrollment in individual market health plans for 2020 has ended nationwide, unless you’re in New York or Washington, DC. Residents in DC have until the end of the day today to select a plan for 2020, and residents in New York have until Friday, February 7.
But tax season is upon us, and although there’s no longer a federal penalty for being without health insurance, people who buy their own health insurance in the exchange still need to pay attention to the tax forms they’re receiving and filing. Form 1095-A is used to reconcile your premium subsidy or to claim it if you paid full price for a plan in the exchange and ended up being eligible for a subsidy.
Residents in DC, New Jersey, and Massachusetts who were uninsured in 2019 will see penalties when they file their 2019 state tax returns, unless they’re exempt. (Penalties will start to show up next year for residents in Rhode Island and California, as individual mandates just took effect in those states last month.)
Oklahoma governor plans to pursue new Medicaid block grant opportunity
Medicaid expansion proponents in Oklahoma gathered enough signatures to ensure that an expansion initiative will be on the state ballot this year. But Gov. Kevin Stitt opposes Medicaid expansion and the ballot initiative, and has been working on a different approach.
Soon after the Trump administration unveiled its controversial “Healthy Adult Opportunity” Medicaid waiver program last week, Gov. Stitt announced his plan for Oklahoma to be among the first states to seek a waiver under the program. Stitt’s administration is still working out the details, but its proposal, dubbed “SoonerCare 2.0” is expected to request additional federal funding to cover more adults in the state’s Medicaid program, albeit with a work program and a cap on the federal funding.
HHS proposes federal health insurance rules for 2021
Last week, the Department of Health and Human Services published the proposed Notice of Benefit and Payment Parameters for 2021 (summary available here, and Health Affairs analysis available here, here, and here). HHS uses this document each year to make various adjustments and updates to rules pertaining to the Affordable Care Act.
As we noted earlier this week, the proposal includes higher out-of-pocket caps for health insurance plans, and a proposal to prevent coverage from auto-renewing with premium subsidies if the subsidies cover the entire premium. HHS is also proposing a rule change to eliminate the requirement that people with most special enrollment periods sign up by the 15th of the month to get coverage effective the first day of the following month. HHS is accepting comments on the proposed rules until March 2.
HHS issues another extension for grandmothered plans
As expected, the federal government has issued another extension for grandmothered (transitional) health plans. Under the latest guidance, these plans can renew as late as October 1, 2021, and can remain in force until the end of 2021. As was the case in prior years, HHS is letting states decide whether to allow grandmothered plans to be renewed; the majority have done so in prior years. But even in states that allow these plans to renew, the decision is ultimately up to the insurers, as they can choose instead to terminate their grandmothered plans and transition enrollees to ACA-compliant plans. Over the coming weeks, we’ll track states’ responses to the latest announcement.
Virginia Senate passes legislation that would require preventive benefits on short-term plans
Virginia is a state to watch this year in terms of new regulations that might be implemented for short-term health plans. But Virginia’s Senate has already passed a bill that would require state-regulated health plans – including short-term plans – to cover preventive care with no copays, coinsurance, or deductibles. Preventive care would be defined in the same way it’s currently defined by the federal government in terms of compliance with the Affordable Care Act. But unlike the ACA, the legislation in Virginia would extend the preventive care mandate to include short-term health plans.
Legislation introduced in Washington State would create state-based premium subsidies
Last year, Washington enacted legislation calling for the state to come up with a plan to create state-based premium subsidies. Washington’s health insurance exchange is working on a report that will be submitted to the state legislature by November 15, 2020, so that lawmakers can work on related legislation in 2021.
But legislation was also introduced in Washington’s House last week that would create state-based subsidies as of 2022. The bill calls for subsidies to extend to people earning up to 500 percent of the poverty level, which is the same threshold called for in last year’s legislation. But it also addresses funding, as it would impose a tax on insurers equal to 1 percent of claims from the prior year. The first assessment would be in early 2021, based on 2020 claims, and would be used to fund sliding-scale subsidies in 2022.
New Mexico legislation would create a healthcare affordability fund
The ACA’s health insurance tax won’t be assessed after the end of this year. So lawmakers in New Mexico introduced legislation last week that would increase an existing state tax on health insurance premiums and use the money to make coverage and healthcare more affordable in the state.
The measure has strong support from health care consumer advocates in the state, and as Health Action New Mexico’s Colin Baillio explains, the amount that health insurers would pay under the proposed state tax increase would still be less than they pay under the ACA.
Virginia Senate passes legislation to expand association health plans
In 2018, the Trump administration finalized new rules for association health plans (AHPs) that would allow sole proprietors to join AHPs that operate under large-group rules, assuming the association has at least 51 members. (Large-group rules are more lenient than the rules that apply to individual and small-group health insurance.) The 2018 federal AHP rule has since been blocked by a federal judge.
But Virginia’s Senate has unanimously passed legislation that calls for the state to seek a 1332 waiver that would allow sole proprietors to enroll in AHPs. (A companion bill has received unanimous committee approval in the House.)
It’s worth noting, however, that the Virginia Bureau of Insurance has informed lawmakers that the provisions in the legislation cannot be implemented with a 1332 waiver, as 1332 waivers can’t be used to waive provisions of ERISA. And the crux of the argument to allow sole proprietors to enroll in association health plans involves changing the definition of “employer” under ERISA.
Two more states consider legislation to cap out-of-pocket costs for insulin
Colorado enacted legislation last year to cap out-of-pocket insulin costs on state-regulated health plans, and numerous states are working to do something similar this year.
Virginia’s House passed a bill this week, by a vote of 98-1, that would cap the insured’s share of the cost of a 30-day supply of insulin at $30. And New Mexico lawmakers have introduced legislation to cap out-of-pocket insulin costs at $50 per month. Most of the bills under consideration in other states call for a $100 cap.
Missouri task force recommends reinsurance, expanded access to catastrophic plans
Missouri’s Health Insurance Innovation Task Force was created last year and tasked with “identifying innovations to improve access to affordable insurance options and access to health care services, particularly in rural areas of Missouri.” The task force has completed its analysis and submitted a report to Governor Parson. The task force recommends that Missouri submit 1332 waiver proposals to CMS, seeking to establish a reinsurance program and expand access to catastrophic health plans.
Despite the fact that Missouri is among a dwindling minority of states that still have not expanded Medicaid under the ACA, the task force did not mention Medicaid expansion, which is a proven way to improve access to affordable health coverage and health care services. (The task force was instructed to only consider proposals that would be neutral or positive with regards to state revenue; ten percent of the cost of Medicaid expansion is covered by the state, but numerous studies indicate that Medicaid expansion is still a net financial positive for states.)
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.