Health Reform Watch is a newsletter for state and territorial health department staff that provides updates, analysis, and highlights on federal and state health reform activities. This newsletter is intended to inform state and territorial health department staff about ongoing health reform activities.

Health Reform Watch

Volume 2, February 12, 2013
Over the past month, several significant proposed federal regulations and guidance have been released regarding essential health benefits, exchange design and operation, and preventive services coverage. States have also moved ahead with efforts to prepare systems, providers, and consumers for the 2014 insurance expansions. The most recent federal updates as well as state implementation highlights are discussed in detail below. Action steps are also included to support engagement in state health reform implementation decision making. For questions about health reform or action steps, please contact Amy Killelea.

In This Edition

NASTAD Blog: The Most Recent Health Reform Posts

Federal Implementation Updates State Implementation Updates

Health Reform Resources

NASTAD Blog: The Latest Health Reform Posts

In our ongoing efforts to improve NASTAD communications, we are piloting a new web blog to provide more ways for you to receive timely, accurate, and high quality content. Please stay tuned for more details as we complete this transition. Below are the latest health reform blog posts. Please send questions, comments, and suggestions to Meico Whitlock.

Health Reform Blog Posts

Federal Implementation Updates

Medicaid Essential Health Benefits

  • ACTION STEP: Find out if your state Medicaid office has chosen a benefits package for newly eligible beneficiaries and whether this package will be different from the traditional Medicaid package. 
In January, the Department of Health and Human Services (HHS) published a much-awaited proposed rule spelling out the “Essential Health Benefits” (EHB) requirements for newly eligible Medicaid beneficiaries (those ineligible for Medicaid under current Medicaid rules who will be eligible under the ACA in 2014 if states opt to expand). The proposed rule indicates that states will have a great deal of flexibility in designing Medicaid benefits packages for the expansion population – states may opt to make this package very similar to its traditional Medicaid package or opt to more closely align it with private insurance plans. In addition, the rule included troubling proposals to allow states to increase the cost-sharing obligations of all Medicaid beneficiaries for certain prescription drugs and for non-emergency care sought in an emergency room. NASTAD will submit comments in response to the rule, focusing on areas identified in the recent blog post on this issue.

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Preventive Services in Medicaid
  • ACTION STEP: Find out if your state Medicaid office is adding these preventive services to its Medicaid package. 

On February 1, 2013 the Centers for Medicare and Medicaid Services (CMS) issued a State Medicaid Director Letter providing guidance to states that opt to offer certain preventive services without cost sharing. Beginning January 1, 2013, the ACA allows states to receive a one percent increase in federal matching dollars for offering specified preventive services without cost sharing, including services assigned a grade of A or B by the United States Preventive Services Task Force (USPSTF) and vaccines recommended by the Advisory Committee on Immunization Practices (ACIP).  This will include routine HIV screening as well as hepatitis C screening for those at increased risk if the new recommended USPSTF grades are adopted. (Note: While these services are optional under traditional Medicaid, the proposed EHB rule for Medicaid for newly eligible beneficiaries clarifies that these services are required for the newly eligible group). The letter also specified that a state must offer all of the listed preventive services to get the enhanced federal match. Finally, the letter highlights a proposed departure from current Medicaid rules that currently limit reimbursement for preventive services to physicians and licensed practitioners under state scope of practice rules. The letter references a proposed Medicaid rule that, if adopted, would give states the ability to allow non-physician providers to provide these preventive services when recommended by a physician or other licensed practitioner provider rather than exclusively provided by a physician or licensed practitioner. Increasing the ability of non-physician providers to be reimbursed for these services could have a significant impact on HIV and viral hepatitis testing, which is often performed by a range of community-based providers.

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Eligibility for Advance Premium Tax Credits 
  • ACTION STEP: Determine how many clients will be priced out of health insurance subsidies because of this rule and what safety net services are available (e.g., ADAP).
The Internal Revenue Service (IRS) published a final rule on eligibility for Advance Premium Tax Credits (APTC) to help consumers afford private insurance purchased through exchanges. To be eligible for APTC, a person must have income between 100 and 400 percent FPL and not have access to “minimum essential coverage.” The rule defines minimum essential coverage as access to government-sponsored health care (e.g., Medicaid) or affordable employer sponsored coverage. The rule defines affordability as employer-sponsored coverage that is not more than 9.5 percent of household income. However, in a very narrow interpretation of the law, the rule bases its definition of affordability on a self-only plan, not on a family plan. This means that uninsured family members of employees with access to affordable self-only employer coverage cannot qualify for a premium tax credit even if dependent coverage offered by an employer ends up exceeding 9.5 percent of household income.

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Exemptions from Individual Mandate
  • ACTION STEP: Ensure that consumers are aware of the exemptions from the penalty for not having insurance coverage.
The IRS and CMS released proposed rules with regard to the ACA’s individual requirement to purchase health insurance. The rules clarify the list of exempt groups specified in the ACA who will not be subject to the penalty for not having insurance coverage in 2014. Importantly, the rules introduced a new exemption in direct response to the Supreme Court’s decision on the Medicaid expansion. Individuals who would have otherwise been eligible for the ACA’s Medicaid expansion in a state that opts not to comply with the expansion will not be subject to the penalty. This new exemption will be important in states that do not expand to ensure that individuals who would have been eligible for Medicaid are not penalized.

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  • ACTION STEP: Engage in discussions with state departments of insurance and Medicaid programs to ensure that Ryan White Program providers are included in exchange and Medicaid managed care networks. 
On January 3, 2013, HHS published guidance to states that opt to operate a partnership exchange (the model in which states and the federal government share responsibility for certain exchange functions). An important piece of the guidance shed light on how HHS is proposing to define “network adequacy” standards for plans sold in the exchanges. The language in the guidance surrounding inclusion of “Essential Community Providers” (ECP) in plan networks – which in previous rules have been defined to include certain Ryan White providers – are somewhat weak. While every plan must include a sufficient number of ECPs in their networks, the rules around how many ECPs must be included are vague. NASTAD and other provider advocates continue to push for an explicit inclusion of Ryan White Program providers and sub-contracted grantees as ECPs as well as network adequacy standards that ensure at least one Ryan White Program provider in each plan network. However, a weak federal standard will mean that ensuring that Ryan White Program providers are included in plan networks will be a state by state and plan by plan effort. States have until February 15, 2013 to submit a blueprint to HHS for a partnership exchange. Kaiser Family Foundation is tracking state declarations with regard to state-run, partnership, or federally facilitated exchanges.

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Single Streamlined Application Template for Health Insurance Coverage
  • ACTION STEP: Ensure that case managers and outreach workers are familiar with the application materials and process for new coverage options in 2014. 
CMS has released a proposed draft of a streamlined application for coverage and federal subsidies through exchanges. People will be able to submit the application electronically or in-person. CMS is soliciting comment on the template.

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State Implementation Updates

In the past month, state health reform planning activities have continued. The following are examples of activities happening in states:
Medicaid Expansion

As state advocacy efforts around the individual health, public health, and economic benefits of Medicaid expansion ramp up, there has been a growing trend of state acceptance of the expansion, even in states that had indicated initial political opposition to the ACA. The map below produced by the Center on Budget and Policy Priorities sums up the growing trend towards support of the Medicaid expansion (as of mid-January 2013). Over the past several weeks, there has been a growing trend among governors – many of whom were initially opposed to the ACA – to embrace the Medicaid expansion, with governors from Michigan, Ohio, Arizona, Nevada, and New Mexico being the most recent to announce support. 
Support for Medicaid Expansion Growing - as of mid-January 2013

Health Department Planning Activities
  • Indiana recently hosted its annual HIV Care Coordination Program Manager meeting. The two-day meeting convened case management program directors from all over the state and devoted a significant amount of time to discussion and planning for ACA implementation in Indiana. A state Medicaid representative was invited to share updates with regard to state planning and implementation of Medicaid reforms and exchange operation. Health department officials used the training as an opportunity to discuss proposed program changes needed to adapt to a changing health care environment – including transition plans for clients who will lose coverage when the state and federal high risk pools close on December 31, 2013. NASTAD was also involved in the training, facilitating a discussion of how the ACA will impact HIV/AIDS programs and highlighting opportunities for case management involvement. The presentation is available here
  • The Washington State Department of Health recently hosted a similar case management training, highlighting the impact that ACA implementation will have on HIV/AIDS programs. Unlike Indiana, Washington has elected to set up its own state-run exchange and is likely to comply with the Medicaid expansion in 2014. NASTAD facilitated a discussion of what these changes will mean for HIV/AIDS providers and consumers. The health department intends to convene a series of meetings and trainings over the coming months, aimed at preparing providers for health reform implementation. 
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AIDS Drug Assistance Program (ADAP) Planning

NASTAD is continuing its intensive efforts to prepare ADAPs for ACA implementation, particularly with regard to the ability of ADAP to provide insurance assistance for clients to purchase insurance through exchanges. Over the coming months, NASTAD will be convening a series of meetings and webinars on this issue. The first webinar will be focused on exchanges and is scheduled for February 27, 2013. A formal invitation for this webinar will be sent out shortly.

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Health Reform Resources
For questions or for suggestions for NASTAD health reform resources that would be helpful to your program or questions about action steps, please contact Amy Killelea.

In addition, HRSA’s HIV/AIDS Bureau has created a mailbox ( where questions related to implementation of the ACA can be submitted. 

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