June 2010 Archives

When I served as an aide in the Ohio Legislature, an annual tradition was the Rockin' Fiscal New Year's Eve Party, held on June 30th as a way for staffers to mark the end of the state's fiscal year (and every other year, the end of a grueling budget process).  With or without rockin' parties, 46 states end their fiscal years on June 30 and they will begin fiscal 2011 without the federal Medicaid support most of them counted on.  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.  The U.S. Senate last week failed to advance a bill that would have continued the federal government's commitment to enhanced Medicaid funding through the end of fiscal 2011--instead, under current law, that support will dry up halfway through the year. 

Congress's failure to provide extra funds for Medicaid will potentially have a real impact on many families who are still struggling to stay afloat through the recession, depending on state policymakers' responses.  The health reform law will keep states from cutting back on eligibility levels or procedures for Medicaid and CHIP, but states may react to the decline in federal Medicaid support in other harmful ways.  They might choose to cut payment rates to doctors and hospitals or make it tougher for families to get Medicaid or CHIP coverage by cutting state workers who process applications.  Either of these steps could mean preventing kids from getting the care they need.

While it's still possible that Congress will continue the needed Medicaid support before it expires in December, state lawmakers who thought they had completed their 2011 budgets will likely have some more tough choices to make in coming months.  Advocates for kids and families will be working to show that the smart choice is to protect the health coverage that keeps kids healthy and helps families through the recession. 

  " Beam me up Scotty!"

  - Captain Kirk

Okay Trekkies, I realize Captain Kirk didn't utter those exact words but it is the phrase that comes to mind whenever I hear the word "web portal" bandied about.  The new health care reform web portal (you'll be able to find it at healthcare.gov), slated for launch on Thursday  (July 1st), is designed to provide information about health coverage options available in each state.  I like to picture it as the entrance point for consumers into the mother-ship of health care coverage options in a post health reform universe.  The web portal will need to beam people up to the right quadrant (i.e., match them up with the appropriate public or private insurance options).

On Thursday, one of the key features CCF staff will be looking for is whether the web portal helps to connect families to coverage through Medicaid and CHIP.  This is one of the very best ways to help families secure affordable coverage for their children right away (and, in some instances, their parents, too). We'll be evaluating the new portal based on whether or not it is easy for families to find information on how to enroll their children in CHIP or Medicaid without having to first navigate through the private insurance plan sections of the portal.

We'll also be looking at whether the new portal reflects some of the additional suggestions made by our Senior Program Director, Dawn Horner, in comments on the proposed regulations such as, does it:

• Create a state-level income calculator so families can figure out whether or not they are likely to be eligible for Medicaid or CHIP.
• Provide users with a way to provide feedback and get questions answered so the web portal is interactive.
•  Include information on state or locally funded coverage options for those whose income is not quite low enough to qualify for CHIP or Medicaid.
•  Collect statistics to determine how effective the portal is at referring eligible families to affordable coverage options.

When it is launched this week, the web portal is expected to be a bare-bones "first generation" site intended to start the process of linking consumers with accurate information on public and private health coverage options.  We are hopeful that, even if this first iteration does not incorporate all of these recommendations, the final web portal regulations (that will be released later this year) will do so. Once those regulations are final, HHS will eventually turn the operation over to a private entity to create a more comprehensive portal - all the more reason to make it clear in the regulations how the system should operate for low- and moderate-income families.  We don't want to send them off to boldly go where no man has gone before without a good guide.

By Vincent DeMarco, President, Maryland Citizens' Health Initiative Education Fund,Inc.

Unlike other states where the fight over federal health care reform continues, leaders in Maryland are figuring out how to make comprehensive health care a reality here at home.  We want to make sure that Maryland gets every federal dollar it can under the new legislation - both for the sake of public health and for the well-being of our economy.

We've got a lot going for us: Most importantly, we have leaders who have a solid record of making health care coverage a priority. We passed one of the nation's largest Medicaid expansions since 2007 by extending adult eligibility from 40% of the federal poverty level to 116% of the federal poverty level (i.e. a family of four earning about $25,000 can qualify for free coverage for everyone in the family.) This moved Maryland from 44th to 16th in the nation for providing free coverage to low income adults and insured more than 63,000 Marylanders.  Partly as a result of this expansion to parents and partly as a result of renewed efforts to reach children, over 85,000 previously eligible but un-enrolled children also got health care coverage in our state since January of 2007. This was not an easy investment for our state amid the economic recession. But fortunately, our legislature understood that to have a resilient state, we need to have a healthy state; in Maryland, families who are coping with losing their jobs don't have to worry about losing their health insurance too.

We know that federal funding will be essential to sustain this program and to continue to make sure that every Marylander has quality, affordable health care coverage. Maryland Governor Martin O'Malley created a coordinating council to advise the state and ensure swift, strategic and comprehensive implementation of federal health care reform to fully benefit our state and our citizens.  The Coordinating Council has already met, and is currently collecting comments and questions from the public involved to ensure transparency and facilitate consumer feedback for excellent program design.

On June 10, the council met to develop a preliminary list of critical issues, establish a feasible work plan, and hear from a panel of stakeholders to learn what they perceive as critical decisions for the council to make or priority topics for the council to consider. We are participating in these meetings and encourage others who are interested in this process to participate as well. The next meeting is July 1 from 9AM-1PM in Annapolis

We think Maryland is a great model for other states to follow. Here's a link to our letter to the coordinating council highlighting specific initiatives we support to ensure affordability, strengthen public health insurance programs, promote awareness about new coverage opportunities and bolster our health care workforce.  We thank the Georgetown Center for Children and Families for the opportunity to share this great news with you and welcome your feedback from the field in other states as well!

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

(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.

Probably the most frequently asked question we get here at CCF is "what are the key decisions states need to make under health reform?"  Today, we begin to answer that question through a new "starter" list of the most immediate questions state policymakers, and the child and family advocates working with them, need to ask when considering health reform implementation. With over 1,000 pages in the health reform bill, this list will certainly grow - but there is a set of critical decisions states should consider now to be prepared for when the bulk of reforms go into effect in 2014.

Today President Obama held a press conference about a number of new regulations being issued by his Administration that he says constitute a new "Patients' Bill of Rights".  Many of these new regulations have important ramifications for children who receive coverage through the private market and in particular, children with special health care needs. 

In another life, I worked with both children and adults with special health care needs and I have seen firsthand how much agony and perseverance parents and family members must have to make sure their child or relative gets the care they need.  These new regulations have the potential to mitigate some of what these families experience on a daily basis. 

A good example of the impact these new regulations could have on real families was articulated by the Restemayer family, who were at the White House today for President Obama's press conference.  The Restemayer's daughter, Allison, was born with a rare genetic disorder that doctors had told her parents would result in her being significantly delayed and that she was likely to die by the age of 10.  The good news is that Allison has defied those predictions and is now 9 years old and attending school and doing mostly age-appropriate work. 

This only has been possible because years ago -- shortly after Allison's diagnosis at the age of two -- a new drug was approved that has helped her tremendously. Since that time, while the Restemayer's have been hopeful, the family also has constantly been on edge with the fear of losing the health coverage they had through Mr. Restemayer job and not being able to find new coverage because of Allison's pre-existing condition. More immediately, the family is facing the prospect that at some point Allison's care would exceed the $2 million lifetime limit on Allison's insurance plan.  To date, Allison has used $1.7 million of the $2 million her insurance plan allows and her parents are hopeful that the new Patients' Bill of Rights will provide the Restemayers the security of knowing that Allison will be able to stay covered and get the care that she needs to continue moving forward on the path she has been on for the last 9 years. 

To see a You Tube video with Allison and her sister Ashley talking about her disorder, please go here.  To learn more about Family Voices, the organization that has supported the Restemayers and many other families as they navigate the ins and outs of the health care system for their children, go here. In the days ahead, we'll be doing a nitty-gritty analysis of the new regulations aimed at eliminating lifetime limits and banning the exclusion of coverage for children's pre-existing conditions.  For now, though, the Restemayers' story is a powerful reminder of why we all need to be rolling up our sleeves and making sure that health care reform works as intended for families and children.

We've said it before, but it bears repeating--we don't have to wait until 2014 to expand access to health coverage or to get started on reform efforts.  Medicaid and CHIP coverage is already available to most of the nation's uninsured kids (and it's time to get them enrolled). Important benefits of the health reform law are also here already:  The Patient Protection and Affordable Care Act contains a range of opportunities for states (and in some cases, other entities) to claim federal funds this year for new program options, demonstration grants, and extensions of existing programs.  Other grants are available next year and in the future.  

The National Conference of State Legislatures has compiled the details on many of these opportunities.  A few are particularly intriguing for those interested in coverage for low- and moderate-income children and families:

•  Consumer Assistance/Ombudsman Programs.  Keeping people informed of the new protections that will be available for private coverage and the new coverage options available in Medicaid, CHIP, and the Exchanges will take some effort.  The law provides for federal support for state offices of health insurance consumer assistance or health insurance ombudsman programs.  While these programs will certainly include information on private health insurance, it's important for advocates for Medicaid and CHIP to speak up to make sure that families can get assistance in one place on all the options available to them--including public programs.  Find out more on consumer assistance from Community Catalyst.  
• Maternal, Infant, and Early Childhood Home Visitation Grant Program.  Home visits from nurses, social workers, or other child development specialists can help kids and parents stay healthy and on track for proper development.  Health reform devotes funding to states for planning and carrying out home visitation programs.  The funding is available this year and each state must conduct a needs assessment by September, so the time is now to find those in your state working on this topic, likely in the Maternal and Child Health office.  HRSA has opened applications for the initial round of funding under this grant program.  
•  Exchange Planning Grants.  Other than Massachusetts and Utah, states have very little experience setting up and running health insurance exchanges.  To help states plan for the Exchanges, states will be eligible for grants by March of 2011 under a formula to be determined by the Secretary of HHS.  State plans under these grants will be the first steps toward key decisions like who will run the eligibility systems for the exchanges and how they'll be structured.  We'll be sure to share further details once they're available and we'd love to hear updates from you on any state activity in advance of these grants.
• Other grants will support the development of health homes for Medicaid enrollees with chronic conditions, pregnancy assistance services delivered by high schools and colleges, and school-based health centers.  

The NCSL link above will help you keep track of the amounts, year of implementation, eligibility, and other details of these grant opportunities.  But for a quick reference guide for the grants as well as a range of other state responsibilities and options under health reform, check out this Policy Brief from the Center for Healthcare Research and Transformation, a partnership between the University of Michigan and Blue Cross Blue Shield of Michigan.  It only provides a brief bullet point on each provision, so be sure to check elsewhere for complete details; nonetheless, it's a handy guide that breaks down state requirements and options by year of implementation.  

By Gretchen Hammer, Colorado Coalition for the 

Medically Underserved

and Ashlin Spinden of Metro Area for People

Colorado Governor Bill Ritter, Jr. has a new health care mantra:  "Because we didn't wait for Washington, Colorado is now one of the best-positioned states in the nation to effectively implement health care reform."  Governor Ritter has made this statement in public appearances, signing ceremonies, and everywhere else he has been to talk about health care in the last few months.   And, he is right.  Colorado is taking bold actions to propel us forward toward successful implementation.

As a key first step, Governor Ritter has established, through an Executive Order, a state Director of Health Care Reform Implementation, naming Lorez Meinhold, his current Senior Health Policy Analyst to the position.  The Executive Order also established the Interagency Health Reform Implementing Board which will provide an administrative infrastructure for the numerous departments and agencies working on implementation.  In addition, the state has established a central website for all things related to health reform.

Another key component of our progress toward reform is the expansion of Medicaid for parents up to 100% of the Federal Poverty Level.  This expansion, as well as the expansion of our CHIP program (Child Health Plan Plus) to 250% of FPL became effective May 1, 2010 as part of the Colorado Healthcare Affordability Act passed by the state legislature in 2009.  Financed through a hospital provider fee and using no state general funds, this law increases payment for hospitals and funds a number of public coverage expansions.  The Colorado Department of Health Care Policy and Financing estimates 44,000 parents and 24,000 children and pregnant women are eligible through these expansions.

In the state's third bold act, Colorado State Senate President Brandon Shaffer publicly agreed to take the HHS Secretary's Connecting Kids To Coverage Challenge.  During a meeting to promote access to health care for all children sponsored by the Boulder Valley Community Action Network, a member of Metro Organizations for People and the All Kids Covered Initiative, Senate President Shaffer heard personal testimony from members of the community about Medicaid and CHP+ being a life-saving resource for their families.  Boulder Valley Community Action Network then asked Senate President Shaffer to accept "The Secretary's Challenge: Connecting Kids to Coverage."  The "challenge" is a five-year campaign challenging leaders to build on the successes of the CHIP and Medicaid program by finding the remaining five million eligible but unenrolled children nationwide.  Without hesitation, Senate President Shaffer accepted the challenge and shared his vision of a streamlined enrollment process free of barriers, public service announcements educating the public about these programs, and implementing the recently passed 12-month continuous eligibility to ensure that all eligible families are enrolled into Medicaid and CHP+.  As one of the first elected officials in the country to accept the Secretary's challenge, Senate President Shaffer has set a high bar for all of us to continue to act boldly and get all kids in Colorado covered.

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

Under the health care reform law, employer health plans or those on the individual market in existence on March 23 (when the legislation was signed by President Obama) have been exempted from some, but not all, of the insurance reforms in the bill. This "grandfather" provision is a critical component of health care reform because it ensures that families can keep the coverage they have now.

New interim rules recently released by the Administration maintain this safeguard while also making certain that employers cannot create additional burdens for individuals by cutting benefits or increasing costs.  If they do, it triggers the additional protections in the bill, like ensuring that children receive critical medical and developmental screenings at no cost or ensuring family members who are sick cannot be denied coverage. (For a list of insurance provisions that apply to grandfather status, see the chart developed by HHS.) 

Under the rules, health plans and employers will lose their "grandfathered" status if they:

o Eliminate or substantially reduce benefits related to a particular health condition.

o Increase copayments by more than $5 or the cost of medical inflation plus 15 percentage points, whichever is greater. Deductibles could also not be raised by the same medical inflation calculation. (Note that medical inflation has averaged 4 to 5 percent in recent years.)

o Decrease the employer contribution by more than 5 percentage points.

o Increase co-insurance charges (a fixed percentage of the medical charge paid by the patient).

o Apply new annual limit restrictions or tighten limits already in place.

o Switch insurance companies. (Only that particular plan would lose the grandfather status, other plans offered by an employer through an existing insurance company would retain their grandfather status.)

Federal authorities estimate that by 2013 about half of employer-sponsored plans will lose grandfather status because of significant changes made to the scope and cost of coverage. With the new rules in place, however, these millions of children and families will be assured that they receive the same protections under health reform as others newly signing up for coverage. Now that's something to tell our grandchildren about!

For more information see the Administration's fact sheet on the new interim rules.

The National Academy of State Health Policy (NASHP) is an independent academy of state health policymakers working together to identify emerging issues, develop policy solutions, and improve state health policy and practice. Recently, its executive committee identified ten aspects of health reform that states must get right in order to successfully implement federal health reform. Like the health reform law, the top ten list covers a broad range of objectives and responsibilities:

1) Be Strategic with Insurance Exchanges

2) Regulate the Commercial Health Insurance Market Effectively

3) Simplify and Integrate Eligibility Systems

4) Expand Provider and Health System Capacity

5) Attend to Benefit Design

6) Focus on the Dually Eligible

7) Use Your Data

8) Pursue Population Health Goals

9) Engage the Public in Policy Development and Implementation

10) Demand Quality and Efficiency from the Health Care System

With the dust settling on the passage of health reform, attention is shifting from the early provisions of the law such as coverage for young adults under their parent's plan and consumer-friendly insurance reforms including eliminating pre-existing exclusions for children, lifetime caps and rescissions of policies. Many states have launched formal or informal groups to begin the planning and decision-making process. According to the National Governors Association (NGA), at least a quarter of the states have formally launched commissions, task forces or advisory groups. The lack of consumer representation on these state structures is a bit disappointing given that engaging the public has been flagged as one of the top ten critical areas.

Two of my favorites among the top ten are simplifying and integrating eligibility systems and using data to analyze and improve your programs. Those of us working on children's coverage know how important these aspects of program administration are to the ultimate success of enrolling all eligible children and families. Both rely on well-designed, high-functioning technology based on simplified processes and streamlined procedures.

The NASHP brief puts it bluntly: "36 million Americans cannot be enrolled in Medicaid or the new exchanges by relying upon what, in most states, is a county-based eligibility platform designed around the cumbersome and intrusive processes of the welfare eligibility system." Touche`!

Effective systems are expensive and time-consuming to build and implement. There is an important role here for the federal government to assist states in system procurement, to standardize data reporting requirements and to require that systems meet data reporting standards as a condition of federal funding. We cannot hope to meet our coverage goals without data to analyze how well our programs are working and identify where improvements are needed. Public reporting of data on enrollment, retention, access to care, health outcomes and much more will be the best way for Americans to know when states are truly getting it right!!

So as Part 1 described it is a little hard to predict what the role of waivers will be in the new world. But one thing we do know is that more standards regarding transparency and public participation are coming our way.  And they are coming soon - one of the first things out of the box. Yeah!!

OK, I know, this is a niche thing but we have been highlighting the need for more transparency and public participation in the waiver process for years (and years). Often critical and high stakes decisions about Medicaid financing, and the benefits that beneficiaries will receive (among other things) are made in closed-door negotiations between the state and the federal government. Beneficiaries and their advocates and providers have little input into the process. Members of both parties in Congress have been concerned about this trend for some time, and the GAO has issued numerous reports over the years highlighting these concerns.

So in two separate provisions, the Patient Protection and Affordable Care Act (PPACA) directs the Secretary of Health and Human Services to promulgate regulations that establish a process for public notice and comment at the state and federal levels (Geeky bill readers see Section 10201 (i)  and Section 1332 (a)(4)(B) for the new waiver for state innovation provision.) And the statute directs the Secretary to issue the rules within 180 days of the date of enactment (that would be on or about September 23, 2010). So this is one of the first things that CMS has to do and they are already hard at work thinking about it.

To help them think those great thoughts, we developed a set of recommendations in conjunction with our partner in crime on this issue, the Center on Budget and Policy Priorities, and a diverse list of consumer and provider groups who have followed waiver issues closely with us through an informal "Waiver Task Force" that I have co-chaired with Judy Solomon at CBPP for a number of years. Let us know if you have other ideas, and stay tuned for the regulations when they come out - no doubt they will be issued as proposed so there will be an opportunity for public comment in September.

Also while we are on the topic a big shout out to CMS for including a public notice requirement in their recent final regulation on "benchmark" benefit rules in Medicaid.

Even though these changes can be made through state plan amendments, they can be of fundamental importance to beneficiaries so having an opportunity for public notice and comment is essential.

So we will revisit this issue in the fall when the proposed rules come out. This is probably a good chance for me to mention that I will be in foreign lands for the summer with my family. To be specific, we are headed to Bolivia for about 8 weeks as my husband dives into some human rights questions there, and the girls and I attempt to learn some Spanish and soak up the culture. I will be back at work on September 1st just in time to pick up this issue for the next round!

One of the many questions I have asked myself since passage of the Patient Protection and Affordable Care Act is what the role of Section 1115  waivers will be come 2014 when the major provisions of PPACA are implemented. In the past, Section 1115 waivers have sometimes been used to expand coverage to groups previously not eligible for Medicaid (think childless adults) and/or to change the delivery system and benefits package (usually limits that Medicaid doesn't allow). The state of Utah, for example, is using a Section 1115 waiver to establish its Primary Care Network or "PCN" program which offers a very limited benefits package (no inpatient or specialist care) to childless adults and parents not otherwise eligible for Medicaid. States also used CHIP waivers to cover parents and other adults with extra CHIP funds, but Congress shut that down when CHIPRA was reauthorized. In general, the federal Secretary of Health and Human Services has broad discretion to waive provisions of the Medicaid law, although how broad that discretion is has been a matter of dispute.

PPACA does not change the provisions of Section 1115 (with a few notable exceptions I will talk about it in a minute) so states will still have the option to come in and request that many provisions of the Medicaid law be waived. But will they do so given the new environment in 2014 when states must cover all adults below 133%FPL, will receive a very favorable matching rate to do so  and will have new flexibility with respect to the benefits package?  Will states that are currently expressing resistance to features of the new law look to waivers as a way to get around them??? That is a key question which it is hard to predict the answer to.

One option states looking for flexibility in the new world may consider, but that is not a waiver, was included in the bill by Sen. Cantwell (D-WA) and developed to accommodate the continuation of a program like the state of Washington's Basic Health Plan. These provisions are found in Section 1331 of the new law and allow states to receive 95% of the federal premium tax credits that would have flowed to eligible individuals in their state between 133-200%FPL and who are not eligible for Medicaid. States must then contract with more than one plan to offer a benefits package that is at least good as the essential health benefits package offered in the exchange and with cost-sharing that is no higher than cost-sharing required under a "platinum" plan (for people under 150%FPL) and no higher than cost-sharing in a "gold" plan for people between 150-200% FPL. Since states are subject to a maintenance of effort requirement for children until 2019, this option would only apply to adults in most states where kids today are covered at 200%FPL or above. But one question is whether a state might seek a waiver of that provision to allow families to be covered together through a Basic Health program such as that contemplated by Section 1331 of PPACA. This might have some benefits such as covering families together and possibly charging a higher percentage of the costs to the feds. However important questions would have to be examined on the benefits and cost-sharing side to make sure that kids still had comparable coverage.

Another new feature of PPACA is Section 1332, which establishes a new Waiver for State Innovation. This provision, championed by Sen. Wyden (D-OR) does establish new waiver authority that is broader than Section 1115 authority and would allow states to waive the provisions of the new law related to exchanges, benefits and cost-sharing protections A state could apply for this new waiver through a new coordinated process with a Section 1115 Medicaid and/or CHIP waiver. Coverage provided must be at least as comprehensive and cost-sharing must be at least as affordable as it would have been under the exchanges.

This new waiver awaits more detail in guidance, but one critical note is that it is not a tool available to states until plan years beginning January 1, 2017. So this will not be an option for states to bypass the main features of health reform before it even gets started.

Much of the current waiver activity is about renewing existing waivers (typically three years which will bring some states right to 2014) and/or extending managed care to people with disabilities. But please let us know if you hear about any new major waiver ideas your state is contemplating. This one bears watching.

Tune in for Part 2 which will focus on the new rules we are expecting on public participation in the waiver process.

Late this spring, the Alaska legislature overwhelmingly passed an expansion of Denali KidCare (Alaska's CHIP program), from 175% to 200% of the FPL, a policy that Governor Parnell had indicated support for earlier this year, but switched directions on last week.  Currently, Alaska is one of only three states that still doesn't cover children at or above 200% of the FPL, the others being Idaho and North Dakota. (Oklahoma is currently at 185% but has had a state-approved expansion in the works for a while now).

The Alaska Legislature's action was actually a restoration of Alaska's CHIP program.  Until 2003, Denali KidCare had been available to children in families with incomes up to 200% of the FPL.  In 2003, Alaska policymakers decided to cut eligibility and set it at 175% of the 2003 federal poverty level guidelines.  That policy resulted in a declining eligibility level each year as the federal poverty level increased.  In 2007, this meant that the state was only covering children up to 154% of the 2007 FPL.  At this point in 2007, the legislature removed the reference to the 2003 poverty level guidelines so that kids were eligible up to 175% of the current year's federal poverty level. Since that time, there have been numerous attempts to restore the income eligibility for Denali KidCare to its original levels - efforts which had looked to be very promising this year. The expansion was expected to cover an additional 1,000 children and was sent to the Governor for his signature weeks ago, however, no action was taken until last week when he reversed himself and vetoed the expansion along with a number of other spending measures.

The outcry against the Governor's veto has been strong and widespread - particularly among state legislators.  We'll see in the coming days if there is any effort to override his veto and put Alaska back to where it was prior to 2003 and in line with the 47 other states offering coverage to children at or above 200% of the FPL.

Last week, CMS issued a final rule on the premiums and cost-sharing that states can charge Medicaid and CHIP beneficiaries in light of the Deficit Reduction Act of 2005  and cost-sharing provisions relating to Native Americans included in the American Recovery and Reinvestment Act of 2009.  This rule has been kicking around for quite a while - it was first issued by the Bush Administration in November of 2008 and since then has been subject to a number of revisions and delays.  Within the confines of what is allowed under the DRA and Recovery Act, the latest changes are explicitly aimed at better protecting low-income people from premiums and cost-sharing charges that could adversely affect their access to care.  Some of the most notable improvements include: 

• No more "shoebox" method.  Under the final rule, states (not families) are responsible for tracking and making sure that cost-sharing charges (including premiums) faced by low-income beneficiaries do not consume more than 5 percent of their income.  This means states can't use the "shoebox" method for tracking cost-sharing charges.  Under this method, families were expected to keep track of their cost-sharing and premium payments, keep a running tab on their cumulative total, and calculate the point at which their payments for cost-sharing begin to consume more than 5 percent of their income.  Now, states will need to figure out how to track and inform families about when they hit the five percent limit.  Alternatively, states can design cost-sharing and premium charges in such a way that families are never at risk of hitting the five percent limit.
• Stronger public input.  The final rule requires states to document that they have given the public advance notice about major changes in cost-sharing rules, and given people the opportunity to provide input in accordance with state rules.
•  Clearer protection of preventive care for children.  The final rule specifies that, for children under 18, all well baby and well child care and immunizations described by the American Academy of Pediatrics in its Bright Futures guidelines must be exempt from cost-sharing (as is required more broadly under the health reform law.)
•  New limits on cost sharing and premiums for Native Americans.  As required by the Recovery Act, the final rule outlines that Native Americans are exempt from premiums and cost-sharing charges if they secure care (or are eligible to secure care) from an Indian Health Provider.  Also, the cost of protecting Native Americans from the cost-sharing charges cannot be passed along to Indian health care providers in the form of reduced payments for providing services. 
• Other changes.  Some of the other changes include: 1) reduces the maximum co-payment that can be imposed on kids in CHIP-financed Medicaid expansions who are in managed care from $5.70 to $3.40 per visit in fiscal year 2009 (indexed in future years); 2) Clarifying that family planning services exempt from cost-sharing charges includes contraceptives and other pharmaceuticals; 3) Requires states to describe how they will alert providers when a service is subject to cost-sharing for an individual beneficiary and if that service can be denied for failure to pay the charge; and 4) Requiring states to describe how they will modify a family's aggregate limit on premiums and cost-sharing set at 5 percent of income when they experience a reduction in income.

Finally, it turns out that the final rule is not entirely final in the sense that CMS is still taking comments on provisions that exempt Native Americans from premiums and cost-sharing under certain circumstances.  This is because, unlike the DRA provisions, the language relating to Native Americans is relatively new, having been passed as part of the Recovery Act in February of 2009.