Recently in Federal Health Policy Category

By Mike Odeh (Children Now) and Kristen Golden Testa (The Children's Partnership) with the 100% Campaign 

And we're off! Implementation of the Affordable Care Act (ACA) is officially underway! Less than six months after Congress passed the ACA, California has blazed the trail as the first state in the nation to create a statewide Health Insurance Exchange under the Act. Two complementary pieces of legislation create the California Health Benefit Exchange and are headed to Governor Schwarzenegger's desk for an expected signature - (AB 1602 creates the Exchange and SB 900 creates a decision-making board).

By creating the Exchange, the State has built a framework that will dramatically improve the way many Californians, particularly the uninsured, get health coverage and will set the right trajectory for health reform implementation by providing new affordable coverage opportunities for millions of children and their families!

Make no mistake - creating the Exchange was no easy task. The legislation that created the California Health Benefit Exchange only came about (on party-line votes) through strong legislative and gubernatorial leadership, thoughtful and dedicated staff, and the efforts of a broad coalition of health and consumer advocates. Certain insurers (ones that are apparently afraid of transparency and a little competition) worked throughout the process to water down the legislation and tried desperately to kill the bill in the final hours. Thankfully, other insurers were supportive and engaged earnestly in negotiating amendments.

CCF's recent blog and issue brief on Health Insurance Exchanges lays out some of the primary responsibilities of an Exchange and identifies some opportunities within the broader federal framework to coordinate among the Exchange and existing programs, like Medicaid and CHIP.

So, as many of you probably know, the ACA allows states to make some important choices, not least of which is the decision whether or not to create a state Exchange in the first place. Given that California is home to nearly 1.5 million uninsured children,  the infamous 39% premium increase proposal and a seemingly infinite state budget stalemate, we really need a custom-designed Exchange that will work for California. Alan Weil and Jon Kingsdale cautioned the California Legislature that making an Exchange work by 2014 would require a lot of strategic planning, thoughtful coordination and time. It's a good thing the Legislature was listening and has been able to take the first step forward for California.

Although the authorizing Exchange legislation creates a governance structure and outlines a framework for the core responsibilities of the Exchange in California, some of the details of coverage in the Exchange, such as the benefit design for the child-only insurance products, will be determined by the governing Exchange Board along with future federal guidance. That's why we believed it was very important that the Exchange be run by a qualified Board with expertise and the authority to negotiate health plan contracts based on price and value while not having conflicting financial interests.  The board also needs representation from those that recognize the importance of coordinating with existing health care programs, systems, agencies, and regulators, so that children are protected and don't fall through the cracks and lose health coverage unnecessarily. Along with minimum benefit standards and cost-sharing limits in the federal law, we believe these factors are critical to ensuring that the coverage offered in the California Exchange is much more meaningful and more affordable than coverage today.

In fact, one of the key features is that the five-member appointed Board is authorized to be an "active purchaser" and will select health plans to participate in the Exchange through a competitive bidding process. Because Exchange board members will be required to have experience with health coverage, administration, and financing, they will be qualified and savvy in negotiating contracts with health plans based on price and value for an estimated 8.3 million lives (including 3.8 million small-business owners and employees and their dependents). 

The legislation also lays out the overall duties and responsibilities of the Exchange, many of which are explicitly required in the federal law (e.g., operating a toll-free telephone hotline and website with comparative plan information) and some of which just make good sense (e.g., authorizing the Exchange board to maximally collaborate with existing health agencies and applying the same standards for insurers and health plans inside and outside the Exchange). It also will allow California to be one of the first states to apply for the federal planning grants that can be used to establish the Board, promulgate strong consumer protections regulations, and develop a process to coordinate effectively with existing state health insurance programs like Medi-Cal (Medicaid) and Healthy Families (California's CHIP).

Since the federal law builds upon (and protects) Medi-Cal and Healthy Families, it is critically important that the Exchange coordinate with existing state and local programs as much as possible. The Children's Partnership and the Kaiser Commission on Medicaid and the Uninsured point out in a recent issue brief that the ACA requires enrollment systems that are consumer-friendly, coordinated, simplified, and technology-enabled. But getting into the "nuts and bolts" of creating enrollment systems that will effectively talk to one another and be easy for families to use requires thoughtful planning and sufficient lead time. That is why we continue to recommend that, as the Board develops the enrollment system for the Exchange and its subsidies, the State buckle down now and start planning for the streamlining and coordination of the other enrollment systems, like Medi-Cal and Healthy Families.

The hard work is just beginning! The 100% Campaign and our partners will continue to advocate (administratively) for better and more program coordination among the Exchange and other programs - not just at enrollment but also during renewal (something we didn't get in the final bill) and at transitions (included in the bill but could still be strengthened). Coordination is especially important when families will be split across programs, for example, when a parent is covered through the Exchange while their child is enrolled in Healthy Families. We will be laying out detailed recommendations for the Board on seamless enrollment, renewal and transition coordination and protections to ensure that only the minimum necessary information is collected from families to determine eligibility for coverage.

While we pushed to get the state Exchange law as strong as possible, we recognize that many detailed decisions of the Board will be determined by federal guidance. That's why we are sharing our thoughts and concerns with the Office of Consumer Information and Insurance Oversight about how the Exchange should coordinate with other programs, and urge them to provide helpful regulatory guidance on the issue. Like stakeholders in other states, we are weighing-in as the federal government develops these guidelines, rules, and regulations, but here in California we are in the unique position of simultaneously sailing ahead into uncharted waters.

So we can't wait passively for guidance to be issued and instead need to focus like a laser on ensuring that we get clear federal guidance that will address such critical issues such as children's benefit design, access to databases for existing eligibility information, and assurances of a coordinated and streamlined enrollment system.

Furthermore, as part of our effort to ensure that families know about and actually enroll in available coverage, we continue to recommend a preferential role for experienced community-based organizations as navigators. Based on our experience here, health care advocates in other states should be prepared for attempts to narrow the navigator role to licensed brokers/agents.

In the end, our State did not develop a perfect bill - the 100% Campaign and our partners had hoped for greater public/consumer representation on the Exchange board, stronger conflict-of-interest prohibitions, more comprehensive coordination requirements, and a preferential navigator role for experienced local community-based organizations. Yet, we are pleased to have a strong starting point and hope to make improvements in the months and years ahead. The new legislation helps structure the incredible amount of work that will be needed to turn the concept of an "Exchange" into an actual gateway to affordable coverage for millions of Californian kids and their families when 2014 rolls around.

Editor's Note: The views expressed by Guest Bloggers do not necessarily reflect the views of the Center for Children and Families.

Health care "exchanges" are critical to fulfilling the promise of the Affordable Care Act and how states decide to meet their responsibility to establish them will have an enormous impact on children and families.  Today, the Department of Health and Human Services is hosting a stakeholder conference to discuss exchanges. To coincide with the conference, my colleagues, Dawn Horner and Sabrina Corlette, released an issue brief that takes a deeper look at exchanges and what's at stake for children and families. 

HHS's day-long conference is intended to engage stakeholders on the important policy decisions surrounding the establishment and operation of exchanges.  CCF's Jocelyn Guyer will take part in a panel discussion and Dawn Horner will attend the conference. (You can view the conference via be webcast here.)

We'll hear more from them about the conference tomorrow, so let's get back to the issue brief.  "Health Exchanges: New Coverage Options for Children and Families" provides a comprehensive overview of exchanges and key questions policymakers must consider when establishing exchanges.  It outlines the funding and design decisions the states will have to make fairly quickly and points out the broad responsibilities exchanges will have in ensuring that consumers can make informed health care coverage choices.  

For example, the Affordable Care Act requires plans to offer child-only policies (reflecting the importance policymakers placed on the need to ensure that children could secure coverage even if their parents were ineligible for an exchange plan).  Beyond the essential benefits packages, exchange plans must provide children with a comprehensive package of preventive care services (referred to as Bright Futures), including immunizations, well-child visits, vision and hearing tests, health and behavioral assessments, and developmental screenings, with no cost-sharing.  These federal standards are only a floor and states can require plans to cover services for adults and children that are not in the minimum package.  In fact, a number of states already have policies mandating that plans cover specific services, some of them critical to children. (Sixteen states and the District of Columbia mandate that insurers offer at least some level of services for autism.)

Another issue that could impact many families is how well states meet the "no wrong door" policy established by the new law.  It is vital that exchanges coordinate closely with Medicaid and CHIP because many people will move back and forth between subsidized exchange coverage and public program eligibility as their income fluctuates.  The brief points out that states should consider ensuring that some plans offered in the exchange also serve Medicaid and CHIP beneficiaries, creating overlapping provider networks and requiring plans to help facilitate transitions for those in the middle of treatment.

The brief also covers the importance of dynamic technology applications to the success of the exchanges.  The exchange procedures envisioned under the ACA rely heavily on the application of smart technology systems. States should consider setting up a working group now to begin to build these systems. As a first step, a state can pave the way toward electronic interfaces by implementing the proven Medicaid and CHIP automated linkage with the Social Security Administration allowed under CHIPRA to verify citizenship status.

These are but a few of the insights included in the issue brief.  I hope you'll take the time to read it for yourself and share it with others in your state.  We would also love to hear from you on how your state is approaching the establishment of its exchange.

By Patrick Tigue, New England Alliance for Children's Health

While there are many provisions in the Affordable Care Act (ACA) that will benefit children and families, the expansion of dependent coverage to children up to age 26 is among the most important - especially in the short-term. In 2011 alone, as many as 1.64 million previously uninsured young adults are estimated to gain coverage under their parents' health plans. The provision takes effect after September 23, 2010.

Recently, the federal government issued regulations further explaining how this provision will work. Here at the New England Alliance for Children's Health, an initiative of Community Catalyst, we support these regulations because they clarify several important points that will benefit young adults and apply the law with their interests at heart:

• Young adults are eligible for coverage under their parents' plan regardless of what state they live in and whether they are tax dependent, financially independent, or a student, employed, or married.
• Premiums or benefits cannot vary based on the age of a young adult who qualifies as a dependent.
• The provision applies to all health plans and only grandfathered health plans (those in existence prior to March 23, 2010) can exclude young adults with access to an employer-sponsored plan until 2014. After 2014, this exception no longer applies.
• Insurance companies must provide prominent notice to enrollees about the special enrollment period for dependents.
• States have the option to extend dependent coverage beyond age 26.

All of these clarifications and others included in the regulations will ensure that dependent children and their families can take full advantage of this important opportunity to secure the health coverage they need.

While we are enthusiastic about the regulations, we've also been working collaboratively with a group of our partners to offer some suggestions to the federal government on how to improve them in a few key areas:

• Clarify that stepchildren and adopted children are included in the definition of a dependent child.
• Further explain the situations where grandfathered plans can remove young adults who are eligible for employer-sponsored insurance to ensure that this does not unduly burden young adults.
• Require that prominent notice be clear and conspicuous--ideally in the form of a stand-alone document highlighting the availability of the new coverage option and how to enroll.

It's our hope that the regulations will be revised soon to reflect these suggestions, but in the meantime you can find out more about the dependent coverage expansion here. This provision is one of the many examples of the very real opportunities that ACA provides to extend coverage to those who otherwise would go without.

This blog post was originally posted on the Health Policy Hub.  The views expressed by Guest Bloggers do not necessarily reflect the views of the Center for Children and Families.

By Eugene Lewit and Liane Wong

The David and Lucile Packard Foundation

The percent of uninsured children has consistently declined, despite deterioration of coverage for adults and the economy. This is one of the significant but frequently overlooked good news stories of recent years.

The gains in children's coverage have been due in large part to actions taken by states to simplify enrollment and retention processes for their Medicaid and CHIP programs while expanding eligibility for those programs. In many states, policy advocacy groups have played important roles in spurring and supporting progress in their states. These organizations are likely to continue to be important players in the implementation of CHIPRA and broader health care reform. Yet, there has been little rigorous, systematic research on how advocacy groups do their work and the strategies they employ to achieve their objectives.

Two recently released issue briefs based on findings from an on-going evaluation of the David and Lucile Packard Foundation's Insuring America's Children: States Leading the Way (IAC) grantmaking strategy attempt to fill some of this knowledge void. The briefs examine some of the state-based advocacy work supported through IAC and identify the lessons that have been learned regarding how to effectively support and promote growth of children's health coverage.

In the first brief, State-Based Advocacy as a Tool for Expanding Children's Coverage: Lessons from Site Visits to Six IAC Grantee States. Evaluation Brief 1, the authors summarize key findings gleaned from in-depth site visits to states where IAC has made its most substantial investment in advocacy through multiyear "Finish Line" grants. These findings describe how persistence, flexibility, creativity and commitment to conducting effective states-based advocacy, especially in a changing environment, can benefit coverage expansion to all children. They also describe the importance of building strong and broad-based coalitions that include both grassroots and state-level stakeholders, an often key step toward maintaining a unified voice among a sometimes crowded community of advocates working to improve children's well being. While acknowledging that much work remains, the brief pinpoints a number of important gains in children's coverage since the IAC efforts began -- gains that have resulted despite a severe and ongoing economic downturn.

The second brief, Strategic Engagement of Policymakers is Key to Advancing a Children's Health Care Policy Agenda. Evaluation Brief 2, examines the benefit that positive engagement of policymakers can have for advocates to move the children's health care coverage agenda forward in states, as well as the strategies for making this engagement happen. Understanding states' unique political environments is one important first step toward this engagement. Further strategies include identifying, nurturing, and supporting political champions; creating strategic links between grassroots organizations and policy advocacy groups; creating effective, appealing messages for policymakers; establishing advocacy groups as the "go-to" resource for reliable data and information; and sharing ownership of agendas and successes with champions and key policymakers.

These briefs provide objective validation of the advocacy strategies and tactical innovations employed by veteran advocates throughout the country. They also offer practical and field-tested ideas for advocates looking for new ways to accelerate the pace of change. Most importantly, they remind us that tough, smart advocates can guide and support leaders in continuing the children's coverage success story.   

As we've noted previously Congress has yet to reach agreement on extending the increased Medicaid funding it originally granted in the 2009 economic recovery legislation.  The increased payments are scheduled to end in December 2010, but most state budgets are looking no better than they were a year and a half ago.  It seems like federal lawmakers would like to help states maintain Medicaid for the children and families who need it--Medicaid fiscal relief has passed both houses of Congress separately, but never in the same piece of legislation, so it is not law.

About half the states responded to this demonstrated interest by Congress--they included a six month extension of the increased Medicaid funds in their fiscal year 2011 budgets (see the map that employs data from the National Conference of State Legislatures) .  Since fiscal 2011 is already underway, states will be forced to make jarring budget adjustments if the extension does not come through.  

(Click to enlarge graphic)

In its absence, states will face budget holes of tens of millions in smaller states to more than a billion dollars in states like New York and California.  That means cuts to services state residents depend on or tax increases at a time when the economy remains fragile.  And because federal law protects eligibility standards and procedures in Medicaid, only limited parts of the program can be cut by state policymakers.  That makes the Medicaid funding extension an issue for all parts of the state budget--from education to economic development to the support for local governments that funds police and fire services.  Failure to extend Medicaid funding will have a ripple effect through the budgets and economies of many cash-strapped states.

The U.S. Senate moved yesterday toward extending unemployment benefits for those who have lost their jobs, recognizing that the recovery has not yet reached many workers.  It hasn't reached state budgets either, so an extension of Medicaid fiscal relief would help states maintain the services that families are counting on now more than ever.        

This last weekend, the nation's Governors came together for their annual meeting in Boston where the main topic of conversation was the economic crisis that continues to cripple state budgets.  One of the key policies many of the Governors made a pitch for was an extension of fiscal relief for strapped states through the extension of increased federal support for Medicaid (aka FMAP) .  As my colleague Joe Touschner pointed out in a blog last month: "That extra support has helped states through one of the worst fiscal crises on record and has been vital in stabilizing Medicaid coverage for children and others in families facing job loss."

My colleague Jocelyn Guyer also blogged about this topic earlier this week and I wanted to follow-up her comments with another look at why the Governors (and many others) think it is so critical for Congress to act sooner rather than later on an FMAP extension.  To do that, I pulled out a brief that Jocelyn and I, along with our colleague here at CCF, Martha Heberlein, did back in 2008 when the economic crisis we are currently in, began.

In this brief, we noted the astonishing progress that states had made over the last decade in covering uninsured children and explained that that progress was at risk due to the worsening economic climate facing states and a dramatic increase in the number of uninsured seeking coverage through Medicaid and CHIP.  We cited research from the Urban Institute that found that a one percentage point rise in the national unemployment rate can be expected to cause the number of uninsured people to grow by 1.1 million and to increase Medicaid and CHIP enrollment by one million (including 600,000 children and 400,000 non-elderly adults).

At the time, we considered the implications of this study if the unemployment rate reached 7.5 percent. Today, we face an unemployment rate of around 9.5 percent- and the model employed two years ago would suggest that as a result, the number of people that have lost employer-based coverage is 11.2 million; 4.7 million have likely enrolled in Medicaid or CHIP and about 5.1 million more people have become uninsured.

In the 2008 brief, we outlined key policies that lawmakers were considering to assist families through this crisis- reauthorizing CHIP and temporarily increasing the federal funding for Medicaid through increasing the FMAP.  CHIP has been reauthorized, the FMAP was increased until the end of this fiscal year and health care reform was been signed into law. However, the economic crisis continues and has likely resulted in millions of more people seeking coverage through Medicaid and CHIP just when the federal commitment to help states weather this economic storm appears to be eroding. While help is on the horizon in 2014 when states will receive new federal support through health reform, states need help now to meet the unprecedented demand for publicly-funded health care coverage.  It would be a mistake for the federal government to turn its back on the states before our nation has clearly pulled itself out of the recession. 

Dr. Fairbrother and her colleagues at Cincinnati Children's hospital have just come out with an excellent new study that takes a clear-eyed look at how often children end up losing health coverage after a parent loses a job.  The results are powerful, but not pretty -- between 2000 and 2004, almost one in three kids lost coverage when their parents lost a job (311 out of every 1,000).  And, the rate is much higher for low-income children (456 low-income children out of every 1,000 lost their coverage when a parent lost a job).   With the latest government data indicating that in 2009, there were 9.4 million families with at least one unemployed member, these are alarming findings. 

As bad as this news seems, one bright spot is that this is a problem we can fix by helping these children secure affordable coverage options through Medicaid and CHIP as their parents get back on their feet.  And, I'm willing to bet that we've actually already made some significant progress since 2004, the latest year for which data were available for the new study.  Thanks to the hard work of Governors, state-based advocates, and political leaders in Washington who have made a strong commitment to covering children, many of the children in families losing jobs now are eligible for Medicaid or CHIP and, increasingly, they are facing easier, more family-friendly enrollment procedures.  Especially before their budget situations deteriorated, states across the country were getting rid of red-tape barriers to coverage and extending Medicaid and CHIP eligibility to additional children. 

Since the downturn, states have largely held onto the gains in coverage (although concerns are increasing about cuts to provider reimbursement rates) and some are continuing to push forward.  This ability to "weather the storm" has been due in large part to a short-term, temporary increase in the help that the federal government provides states in financing Medicaid.

Now, however, we are coming up on a critical moment that brings the importance of Dr. Fairbrother's research into sharp focus. At the end of this year, the extra help the federal government has given states is slated to expire even though state budgets continue to be battered by rising demand for services. Without a short-term continuation of the extra help, states will be under enormous pressure to scale back Medicaid and CHIP, including children's coverage.  (They can't do it directly because the new health law requires a maintenance-of-effort when it comes to Medicaid and CHIP eligibility rules and procedures but there are indirect ways to cut back on coverage that states may be forced to consider such as slashing the number of state workers who can process applications or cutting reimbursement rates so deeply that children cannot secure needed care.)  If this happens, the reality documented by Dr. Fairbrother that children often lose their private coverage when their parents lose a job will translate into more and more uninsured children.  We will have a much harder time "catching" them in Medicaid and CHIP, and offering their families the peace of mind that comes with knowing that at least their children can still get health care.  On a more global scale, we could end up with a deeply disturbing result - more children becoming uninsured even as the country moves forward on implementation of broader health reform in 2014.

At Georgetown, we work closely with state officials and advocates who are addressing these issues in the states, and the sense of urgency is palpable.   If leaders in Washington don't come through quickly with an extension of federal fiscal relief, it may threaten a lifeline that can help millions of families stay afloat in the midst of unprecedented job loss. 

(Editor's Note:  We want to welcome a new voice to our blog and hope that she'll be a frequent contributor to Say Ahhh!  Sabrina Corlette has taken over the reins from our former colleague Karen Pollitz and is our new resident expert on regulation of the private health insurance market and consumer protection issues.  While she's technically with the Health Policy Institute, she collaborates closely with CCF.)  

By Sabrina Corlette, Research Professor, Georgetown University Health Policy Institute

On Tuesday, I sat in the East Room of the White House and listened to the President as he announced the release of a set of rules implementing provisions of the Affordable Care Act that will help protect consumers from some of the worst insurance industry abuses.  I couldn't help but think back ten years ago, when I was a staffer in the U.S. Senate, working on "Patients' Bill of Rights" legislation.  At the time, I met with many patients and families from around the country who'd suffered from decisions by their health plan to deny or limit needed care, and to limit their choice of doctors.  Many of these families had children with special health care needs and were facing terrible decisions about what tests, surgeries, and drugs they could afford because their health plan was not providing the coverage they needed.

That was ten years ago.  While the bill never garnered the votes it needed for passage, the difficulties those families faced never went away.  Thousands of children continue to be denied coverage because of a "pre-existing" medical condition.  Families that dutifully pay their premiums are abruptly dropped from their policies after filing a claim - and told it's because they didn't fill out their application correctly.  And countless children with high cost medical conditions are hitting their plans' annual and lifetime limits on coverage, leaving families to forgo needed treatment or face medical bankruptcy. 

On Tuesday, as I listened to the President describe the insurance reforms that will be effective in September of this year in this latest round of rulemaking, I realized - it took ten long years, but we finally passed that "Patients' Bill of Rights".  It was one of the happiest moments of my life.

So what does this rule do?

First, it says that insurance companies can no longer deny or limit coverage for children who have a pre-existing medical condition.  This provision is estimated to help up to 162,000 children gain access to coverage they don't currently have.  This provision applies to all plans except individual policies that are grandfathered (i.e., those that were in existence prior to the law's enactment and have not made significant changes since.)  For families that are in grandfathered plans, they may need to change their policy in order to get the necessary coverage for their child.

Second, it stops insurance companies from setting lifetime limits on coverage, and restricts the amount of annual limits on essential benefits.  The ban on lifetime limits applies to all plans, while the restrictions on annual limits apply to all plans except those individual policies that are grandfathered.  The restrictions on annual limits are adjusted over time - in the first year the limits can be up to $750,000, in the second year up to $1.25 million, and in the third year up to $2 million.  Starting in 2014, all annual limits on coverage of essential benefits are banned.  HHS is charged with defining what constitutes the essential benefits package, which will determine what items and services would be covered under the annual limits restrictions.  However, HHS has not yet issued those regulations, and families will temporarily need to rely on plans' "good faith" definitions of what constitutes essential benefits.

Third, it stops insurance companies from retroactively cancelling a policy because of an unintentional mistake on an application.  This is a particularly nasty industry practice that leaves people stranded just when they need coverage the most. This rule applies to all plans, including those that are grandfathered.

Fourth, it makes clear that health plan enrollees have the freedom to choose any available participating primary care provider in their plan's network, including any available participating pediatrician for their children.  It also prohibits companies from requiring a referral to see an OB/GYN.  This applies to all plans except those that are grandfathered.

Lastly, it prohibits all plans except those that are grandfathered from charging higher cost-sharing for patients who need to use an out-of-network emergency room.  And it sets some requirements for how plans reimburse out-of-network providers to help protect patients from potential "balance billing." 

These new rules, which will go into effect starting September 23, 2010, will provide critical relief and peace of mind to thousands of families who count on their insurance to be more than an empty promise.  It was a long time in the making, but we finally did it.