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June 27, 2016

Washington Health Policy Week in Review Archive b02fe9c0-93d7-46a9-926a-36da7a9cd50e

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California Opens Door to Health Insurance for Undocumented Immigrants

By Marissa Evans, CQ Roll Call

June 24, 2016 -- California became the first state to allow undocumented immigrants to buy insurance on a state health insurance exchange website under a bill Democratic Gov. Jerry Brown signed this month.

The new law, if it passes federal scrutiny, would allow approximately 390,000 immigrants who are in the country illegally to receive coverage through Covered California, the state's health exchange website. It was part of a series of bills that state Sen. Ricardo Lara, a Democrat, has pushed to allow more undocumented immigrants access to health care. 

"The current policy disallowing immigrants from purchasing care with their own money is both discriminatory and outdated," Lara said in a statement. "I thank Gov. Brown for advancing justice today."

Golden State legislators have been moving bills to open up coverage for undocumented immigrants. On May 16, a new law went into effect making 170,000 undocumented low-income children and teenagers eligible for Medi-Cal, California's version of the Medicaid program for the poor.

Allowing undocumented adults to sign up for private coverage, even with no financial help, has been a long-standing political minefield for state legislatures and Congress since the debate over the 2010 federal health care overhaul. Many Republicans argue that undocumented immigrants should not be allowed access to coverage or tax credits to help them pay for health insurance, while Democrats say they should.

Roughly 12 million immigrants are undocumented, and about 40 percent of undocumented immigrants are uninsured, according to a nonpartisan Kaiser Family Foundation report released in January. The study also found that about 21 percent of the 32 million people who are uninsured are either legal or illegal immigrants.

The federal health law prohibits undocumented immigrants from purchasing their own insurance, even without subsidies, through the federal website or state exchanges created by the law.

California's plan, if approved through a waiver by the federal government, could potentially curb rising costs for hospitals when patients cannot pay their bills, something state governments are trying to temper. Because undocumented immigrants often do not have health insurance, many use emergency rooms for basic care, which strains finances of medical providers and state governments.

Other legislatures with a large undocumented population may not follow California's example, says Trish Riley, executive director of the National Academy for State Health Policy. Riley says opponents may argue that since state exchanges received some federal money, undocumented immigrants should still be banned from buying coverage through the site. But if California decreases its uncompensated care costs with this policy as fewer uninsured immigrants use emergency rooms, more states may become intrigued with the idea.

One hurdle California officials will have to overcome is fear among undocumented people that they could be deported if they sign up for health insurance and reveal they are not legal residents. Health officials have said the information would be confidential but immigrants may be wary.

"Will people in the country illegally come forward?" Riley asks. "There's such fear in this political environment."

The state would pursue the change by applying for a new waiver allowed under the health care law. Under a state innovation waiver, or 1332 waiver, the coverage would still have to be on par with federal standards.

Federal 1332 waivers allow states to sidestep requirements affecting covered benefits, subsidies, insurance marketplaces and individual and employer mandates, as long as a state can achieve the goals of the health care law in other ways. States can propose alternatives to the federal approach but must demonstrate to the Treasury Department and the Department of Health and Human Services that coverage will remain accessible, comprehensive, affordable and not affect the federal deficit.

The California waiver, if approved, would go into effect Jan. 1, 2017. The Obama administration has been mum on details about the waiver process and with only a matter of months left in office, it is unclear how many innovation waivers officials will have time to approve.

Besides California's soon-to-be-pending application, Hawaii is also close to finishing its waiver application requesting that state employers be allowed to bypass requirements for offering coverage. Hawaii already has a long-standing law requiring employers to cover many workers. Meanwhile, lawmakers in Alaska, Minnesota, Ohio and Oklahoma also have authorized their states to apply for waivers. Vermont, the only state that has submitted a 1332 waiver application, is seeking to rework its small business health insurance exchange.

Even with legislative approval and interest, states considering such waivers are entering unchartered territory, says Heather Howard, director of Princeton University's State Health Reform Assistance Network. While HHS and Treasury are not inundated with 1332 waiver applications, the negotiation process could take months, and states are facing time constraints as the Obama administration winds down.

Howard says states are already looking to the next stage of overhauling health care. "They're saying 'we've implemented the ACA. Where can we make improvements?' " Howard says, using the acronym for the health care law.

"In California, obviously, we know one population left behind was undocumented immigrants," Howard says. "It's also destigmatizing the ACA and it might have the result of getting more enrollment."

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Ryan, Leaders Tout Health Plan to Mixed Reaction from Conservatives

By Erin Mershon, CQ Roll Call

June 22, 2016 -- Speaker Paul D. Ryan, R-Wis., and other top House Republicans on Wednesday portrayed their new alternative to the Affordable Care Act as a consensus plan, even as some conservatives and outside groups hesitated to embrace it.

Ryan, Majority Whip Steve Scalise, R-La., and the four committee chairmen with jurisdiction over health care unveiled earlier in the day a broad manifesto meant to represent the full caucus's views on how to replace the 2010 law as well as an overhaul of Medicare and Medicaid and a rewrite of other major health policies.

Little in the plan is new. The sweeping document revives nearly every major health policy change Republicans have proposed in recent decades. But it is the first plan, as GOP leaders emphasized, that has earned the backing of all the House Republican leaders who would need to sign off on a full replacement package, should a Republican win the White House.

"We've promised to repeal and replace Obamacare and make health care actually affordable. Well, here it is. A real plan, in black and white, right here. We are officially putting it on the table," Ryan said at an event at the American Enterprise Institute. Staff estimated 400 people attended.

The plan has not yet earned the support of Republican frontrunner Donald Trump. Ways and Means Chairman Kevin Brady, R-Texas, and Budget Chairman Tom Price, R-Ga., said the presumed GOP presidential nominee's advisers had been briefed on its contents, but that they had not spoken to Trump about it.

"I know he's committed to repealing Obamacare and I know he wants much more affordable health care for Americans, so I'm hopeful," Brady told reporters after the event.

"I have all the confidence in the world that the plan he will endorse and the plan he will embrace is more consistent with this plan than it will be with Hillary Clinton's plan," Price told reporters.

Lukewarm Reception

It's not clear if the plan will get backing from the entire Republican conference, either. The conservative House Freedom Caucus, which in the past has rejected some efforts to replace the law as insufficient, has so far withheld its endorsement. The influential conservative group Heritage Action stopped short of endorsing the plan in a Wednesday statement, voicing concerns that the blueprint might rely too heavily on regulations that resemble those in the 2010 law, and taking issue with the lack of details about funding.

"Heritage Action looks forward to working with House Republicans to continue the conversation on conservative health reforms that promote opportunity for all and favoritism to none," the group said.

One Freedom Caucus member, Rep. John Fleming, R-La., a physician, has offered his support for the package in the past. The Republican Study Committee also praised the blueprint Wednesday.

Democrats were quick to denounce the proposal, saying it would walk back the 2010 law's consumer protections and gains that have been made improving Americans' access to care.

"The proposal they put forward today includes some more details, but the details they put forward today are wildly unpopular, which is why I suspect they will not receive a vote on the floor of the House of Representatives," said White House spokesman Josh Earnest.

Employers groups were quick to express concern with provisions related to capping the tax deduction for businesses that provide health care to their employees. Insurers, whose industry would see the largest changes from a repeal of the 2010 law, withheld any substantive reaction.

"We stand ready to work with both parties on market-based solutions that improve access and affordability for consumers," said Marilyn Tavenner, president of America's Health Insurance Plans, the industry's main lobbying arm, in a statement.

Republicans took issue with criticisms that the proposal lacked important details and did not include fresh ideas.

"We're attacking this in a fiscally responsible way, and when you eliminate all those taxes and all the mandates that drive up costs and you unlock that tax break for health care, this is very achievable, and frankly, should have been the way it was done originally," Brady said.

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Senate Democrats Urge Justice to Block Health Care Mergers

By Jad Chamseddine, CQ Roll Call

June 24, 2016 -- Democrats in the Senate urged the Justice Department for the first time to block Anthem Inc.'s acquisition of Cigna Corp. and Aetna's proposed purchase of Humana Inc. over concern the combination of health insurers would raise premiums and hurt competition.

In a letter to the interim head of the Justice Department's antitrust division, Renata Hesse, seven senators led by Democrat Richard Blumenthal of Connecticut made clear they do not support further consolidation among health insurance companies.

"We urge the DOJ to challenge these mergers from proceeding and to prevent the damage they would cause to competition and consumers," according to the letter. It is rare that members of Congress specifically request federal regulators to block a transaction, instead often simply asking them to scrutinize a deal to be sure consumers aren't harmed.

The letter comes amid reports that Justice Department officials are concerned about adverse effects on consumers from Anthem's proposed acquisition of Cigna and that meetings with executives from the merging parties are scheduled through the week.

Blumenthal, who serves on the Senate Judiciary Antitrust Subcommittee and has previously complained of too much consolidation in several industries, was one of the first lawmakers to speak out when the transactions were announced a year ago.

The letter cites the effect previous mergers have had on prices, such as Aetna's acquisition of Prudential's health care business, in which premiums rose by 7 percent in the markets where both operated. The senators argue the merger "would make an already concentrated market" less competitive and create three dominant companies; Anthem, Aetna and UnitedHealth Group Inc., that would control 91 percent of the national market.

The letter paid particular attention to the reduction in competition for Medicare Advantage, a type of Medicare health plan offered by private insurers, if the deal between Aetna and Humana is approved.

Aetna and Humana oppose this argument, saying Medicare Advantage is an interchangeable product with regular Medicare, and therefore its market dominance isn't as high as the merger opponents' argue. But the lawmakers said in the letter "consumers do not view Medicare and Medicare Advantage as meaningful substitutes."

The merger among four of the five largest health insurers has been opposed by several groups, including the American Hospital Association, American Medical Association and the American Psychiatric Association, with all calling for the Justice Department to block both transactions on grounds similar to those cited by lawmakers in the letter.

The lawmakers also took a shot at the willingness of enforcement agencies to settle mergers by agreeing to remedies instead of simply blocking the deals. "Divestitures have proven to be an ineffective remedy for restoring competition," the senators said.

The Justice Department and the Federal Trade Commission, the other government agency in charge of reviewing mergers, often impose conditions in approving a merger in which the parties agree to sell assets to a third party to keep competition in an industry.

Blumenthal has been particularly critical of failed merger remedies, and aired his concern during an antitrust oversight hearing in March, calling on enforcement agencies to rethink the process. Besides focusing on antitrust policy, the letter questioned both mergers' effects on jobs and wages, arguing that "history shows that mergers can frequently cause job losses as firms eliminate supposedly redundant positions."

The Justice Department is still reviewing both transactions, and has not set a timeline when to expect a decision. The mergers are undergoing review in several states, but have received approval in others.

Just this week, the California Department of Managed Health Care approved Aetna's deal to buy Humana, while California's insurance commissioner recommended late last week that enforcement agencies block Anthem's acquisition of Cigna.

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Senators Want to Stop Unfair Roadblocks for Generic Drugs

By Andrew Siddons, CQ Roll Call

June 21, 2016 -- Lawmakers want to make it harder for brand-name pharmaceutical companies to use safety concerns as an excuse to block competition from generic drugmakers. But even a bipartisan effort in the Senate Judiciary Committee could face major obstacles.

On Tuesday the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights examined a bill (S 3056) that would give generic drugmakers legal recourse when the makers of original drugs cite safety protocols to limit distribution channels.

Generic drugmakers unable to obtain samples of the original treatment cannot determine whether their version is equivalent. That makes it harder to win approval from the Food and Drug Administration and limits competition that could help bring down drug prices.

Manufacturers of drugs with significant side effects or the potential for abuse have been required since 2007 to develop risk evaluation and mitigation strategies, programs designed to keep distribution channels secure and make sure drugs are being prescribed properly.

But according to Sen. Amy Klobuchar, D-Minn., the subcommittee’s ranking member and a cosponsor of the bill, the FDA has received 100 complaints from generic drug makers that they are being blocked from obtaining samples.

Judiciary Committee Chairman Charles E. Grassley, R-Iowa., said that using the risk evaluation programs as an excuse for blocking those sales was against FDA regulations – and against the law. “We also need to make sure that games aren’t being played and laws aren’t being undermined when we’re trying to increase the availability and affordability of prescription drugs,” he said.

When the safety protocols are required for a drug, brand-name and generic makers must negotiate and share information about these programs, but the generics industry asserts that talks are used to delay the introduction of potential competitors.

Antitrust laws might offer some recourse, but the bill’s sponsors believe more specific legal language is required. The bill was introduced last week by Grassley, Klobuchar, Sen. Mike Lee, R-Utah, chair of the subcommittee that held Tuesday’s hearing, and Sen. Patrick J. Leahy, D-Vt., the full committee’s ranking member.

The bill would allow generic drug companies to bring civil suits against the company behind the original product if that company was denying sale of the original drug to the generic maker. It would also allow companies to file suit if the original drug company refuses to allow the generic drug maker to join the FDA-approved system of safe use.

The pharmaceutical industry worries that the legislation could have unintended consequences. “While we are currently reviewing the legislation, we would be concerned if patient safety could be jeopardized in any way,” the Pharmaceutical Research and Manufacturers of America said in a statement.

At Tuesday’s hearing, Peter O. Safir, senior council at the law firm Convington & Burling, noted that the bill could discourage generic drugmakers from negotiating in good faith over the risk evaluation strategies. He said that it also might encourage them to file suit years before the expiration of a patent.

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Puerto Rico Medicaid Struggles Under Block Grant

By Marissa Evans, CQ Roll Call

June 21, 2016 -- As Republican lawmakers consider funding the Medicaid program through a capped grant allotment doled out to states, Puerto Rico is struggling to keep its program afloat under the same parameters.

While the territory faces a $72 billion debt crisis, its joint federal-state health insurance program for the poor and disabled is also enduring dark times. Officials say part of the reason the territory is in debt is because of having to borrow to keep Medicaid running. Officials are talking about potentially cutting beneficiaries off the rolls if things do not improve.

Puerto Rico's looming Medicaid crisis comes amid mounting frustration among state and federal lawmakers alike about the hefty price tag of the program nationwide. Spending on the program increased to $498 billion in fiscal year 2014, according to a Medicaid and CHIP Payment and Access Commission report released June 10. Republicans in Congress are mulling the idea of imposing on the program per capita spending caps somewhat similar to block grants, a way intended to motivate states to become more efficient in how they allocate federal dollars for Medicaid. Rhode Island, and Vermont used federal waivers so that their respective Medicaid programs had statewide spending limits based on enrollment projections.

House Speaker Paul D. Ryan, R-Wis., has long pushed for the Medicaid program to have block grant funding.

"This reform ends the misguided one-size-fits-all approach that has tied the hands of so many state governments," Ryan says on his website. "States will no longer be shackled by federally determined program requirements and enrollment criteria. Instead, they will have the freedom and flexibility to tailor a Medicaid program that fits the needs of their unique populations."

Democrats argue these measures could potentially cut people off the rolls if the grant money starts to run out and states must rely more heavily on their own coffers.

That's what is happening with Puerto Rico's Medicaid program. The 2010 federal health law provided the territory an additional $6.4 billion in Medicaid funding that was supposed to last until fall 2019. The law also increased its federal match from 50 percent to 55 percent of medical expenses. But the territory has been burning through the money so fast that it could be gone as soon as mid-2017, according to the Centers for Medicare and Medicaid Services.

Legislation (HR 5278) addressing the territory's debt problems does not include financial aid to keep the Medicaid program afloat. Resident Commissioner Pedro R. Pierluisi, the non-voting representative of Puerto Rico in Congress, introduced a bill (HR 2635) last June to address the territory's Medicaid problem but the legislation has gained little traction.

For Puerto Rico, the federal block grant does not meet the spending needs of its Medicaid program, said Edwin Park, a vice president of health policy for the left-leaning Center for Budget Policy and Priorities. Park points to how program officials have had to deal with rising medical costs to help beneficiaries susceptible to sudden outbreaks like Zika, a mosquito-borne illness that can cause birth defects.

"Looking just at the Medicaid program, it's been chronically underfunded despite great need and reliance on the program," Park said. "Puerto Rico had to cut reimbursement rates and there is now evidence about migration of health providers. Hospitals are not able to make basic investments, providers are not being paid...there's a lot more going on than Medicaid funding shortfalls."

Block grants are also not necessarily a one-size-fits-all for states, according to the MACPAC report. The commission noted that the Rhode Island and Vermont waivers were tailored to the needs of each state. A block grant could change the nature of the program, according to the commission.

"Historically, once put in place, block grants have changed in ways not necessarily anticipated by their architects," the report said. "For example, the real value of block grant funding has tended to decrease over time even though the initial funding for block grants has not been consistently higher or lower than the programs they replaced."

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Medicaid Health Homes Still a Work in Progress

By Marissa Evans, CQ Roll Call

June 22, 206 -- Health homes for Medicaid beneficiaries could save money, but not all states are sold on implementing them the way the Centers for Medicare and Medicaid Services (CMS) wants.

The care settings are designed to coordinate all of a patient's primary, acute, mental health, and long-term care while also guiding them toward supportive services such as housing and food assistance programs. The 2010 health law allows states to receive an enhanced 90 percent match rate for up to two years after the health home program is created. Twenty-one states and the District of Columbia have implemented health homes under the federal guidelines as of April, according to a CMS report.

The Medicaid and CHIP Payment and Access Commission (MACPAC) released a report earlier this month stating that while states have access to programs and demonstrations that could help them lower their costs, they do not always take advantage of it.

"Mindful of their own budget constraints, as well as other political and economic factors that shape their health care markets and the design of their Medicaid programs, states respond differently at different times and in different circumstances and thus do not always take the opportunity to draw federal match or even enhanced federal match," the report stated.

Anne Schwartz, executive director of MACPAC, said in an interview that the number states that have implemented health homes through the health law is a clear sign of interest, even if fewer than half have taken up the idea.

"When states are trying to balance budgets when you look back at some of the debates, in many cases coming up with money for Medicaid is a significant issue," Schwartz said. "While there are these opportunities for states they have to balance their own priorities where they think they would like to improve their Medicaid's a different issue in each state."

The MACPAC report comes as lawmakers grapple with lowering costs. While Democrats call for more funding and for states to take advantage of the health law's Medicaid expansion, Republicans want per capita spending caps and block grants on the program, a means to get states to be more efficient with how they allocate federal dollars.

Julia Paradise, an associate director of the Kaiser Commission on Medicaid and the Uninsured, said in an interview that the enhanced match helps but states also have to personally invest to build infrastructure around the program for needs such as health information technology and electronic health records.

"It is a resource and an intensive undertaking because health homes represent a model of care that involves a lot of activities that providers haven't historically provided," Paradise said.

A July 2015 joint report from the Urban Institute and Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation found that states with health homes spent the first year saw "significant administrative burden and lost productivity for participating providers." The report cited instances in which states had difficulty at first enrolling beneficiaries, reimbursing provider services provided and sharing beneficiary clinical data. Providers also felt the brunt of working with health homes by working on getting certified or implementing information technology.

Matt Salo, executive director for the National Association of Medicaid Directors said in an interview that many states are working toward overhauling how they do payment and care delivery. However, he said, states are finding ways to do so without the federal health law's parameters for health homes. He said it comes down to states maximizing their resources and examining if the enhanced match rate is truly worth it for them.

"[States] have to be really really thoughtful and strategic about how they take on new projects," Salo said. "A little bit of an enhanced match is not going to be all it takes to get you there, that's a very important distinction and takeaway. For incentives to really work they have to be meaningful and achievable."

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