March 2020 marks the 10-year anniversary of the passage of the Affordable Care Act (ACA). The National Academy for State Health Policy (NASHP) has developed resources that highlight some of the key state activities related to ACA implementation.
This features the ACA’s major milestones, including states’ implementation of its coverage expansions, insurance market changes that impacted states’ decision making, and the broad policy changes and legal decisions that affected ACA implementation.
This summarizes the ACA’s provisions that relate to state action or oversight, and the efforts states made to put in place policies, programs, and initiatives to meet the ACA’s legal requirements – and in some cases develop policies to further codify certain aspects of the ACA.
The Affordable Care Act (ACA) at 10: Summary of State Provisions and Implementation Status
Five states (CA, MA, NJ, RI, VT) have enacted a state-based mandate.
One state has enacted a policy to automatically enroll uninsured, eligible individuals in Medicaid; others are provided information about coverage through the health insurance exchange. (MD)
Massachusetts imposed a penalty on employers with more than five employees who have workers enrolled in Medicaid or Massachusetts’ subsidized individual insurance program (ConnectorCare).
Calculating tax credits: Credits are calculated on a sliding scale based on a benchmark of the second-lowest cost silver plan available to the individual (actuarial value of 70%).
Calculations also factor an “applicable percentage” of income that individuals are required to contribute toward insurance. The applicable percentage is based on income and ranges from 2% for those earning up to 133% of FPL to 9.5% for those earning up to 400% of FPL. The percentage is adjusted yearly based on premium growth.
As of 2019, 9.7 million consumers received APTC through health insurance exchanges.
Three states (CA, MA, VT) provide subsidies in addition to what is available through the federal marketplaces.
In October 2017, the Administration stopped issuing reimbursements to insurers to cover costs associated with the CSR program, resulting in financial losses and some exits for QHP issuers.
Forty-five states have instructed insurers to adjust premiums of QHPs to account for CSR losses. In 41 states, insurers isolate adjustments to just silver-level health plans, a policy known as silver-loading. The increase in silver plan premiums increased the benchmark against which APTCs are calculated, enabling consumers to draw down larger tax credits. (States that silver-load include AK AR, CA, CO, CT, DE, FL, HI, ID, IA KS, KY LA, ME, MD, MA, MI, MN, MO, NE, NV, NH, NJ, NM, NY, NC, NC, OH, OR, PA, RI, SC, SD, TN, UT, VT, VA, WA, WI, and WY. States that broad load: IN, MS, OK, WV).
Insurance coverage by small employers has declined since 2009. (It dropped 18.9% for employers with 10-24 employees and 27.4 % for employers with less than 10 employees).
One state (MD) leveraged the money that would have been spent on the health insurance tax to finance its reinsurance program.
Allowed for “grandfathering” of small group and individual market plans in existence before 3/23/2010, meaning that these health plans could continue to offer coverage after 1/1/2014, even if they were not in compliance with QHP requirements.
Responding to concerns over loss of insurance plans, the Centers for Medicare & Medicaid Services (CMS) allowed plans in existence prior to 1/1/2013 to continue through 2014 (called grandmothered plans after ACA implementation). The policy has continually been extended. Currently, grandmothered policies may remain in existence through 2021 at the discretion of states.
Fourteen states (CA, CO, CT, DC, DE, MA, MD, MN, NV, NM, NY, OR, RI, VT, WA) and DC have prohibited the sale of grandmothered plans in their markets.
Eight states (CA, CT, DC, MD, ME, MN, NJ, RI, VT) and DC have issued state legislation or regulations that enforce, at minimum, the federal MLR standard.
Eliminates annual limits on spending for services considered essential health benefits (EHB).
Eliminates lifetime limits on spending for services considered EHB.
Eliminates cost-sharing for preventive services defined by the US Preventive Services Task Force.
Requires plans to charge in-network rates for emergency services rendered at out-of-network facilities.
Limits deductibles for small group plans.
Thirteen states (CA, CO, CT, DC, DE, HI, LA, MD, ME, MN, NC, VA, VT, WA)
and DC have issued legislation or regulation that limits cost-sharing.
Twenty-three states (CA, CO, CT, DC, DE, HI, IA, IN, LA, MA, MD, ME, MN, ND, NE, NH, NY, NC, OR, RI, UT, VT, VA, WA) and DC have issued state legislation or regulation that prohibits annual limits.
Twenty-three states (CA, CO, CT, DC, DE, HI, IA, IN, MA, MD, ME, MN, ND, NE, NH, NY, NC, OR, RI, UT, VT, VA, WA) and DC have issued state legislation or regulations that prohibit lifetime limits.
Eighteen states (CA, CO, CT, DC, DE, HI, IA, IN, MA, MD, ME, NC, ND, NE, NY, OR, UT, VA, VT) and DC have issued state legislation or regulation that prohibits cost-sharing for preventative services.
Twenty-one states (CA, CO, CT, DC, DE, HI, IA, IN, MA, ME, MD, MN, MO, ND, NE, NJ, NY, NC, OR, RI, VT, VA) and DC have issued state legislation or regulations requiring plans to charge in-network rates for emergency services delivered at out-of-network facilities.
Ban on rescissions. Prohibits issuers from revoking coverage other than in cases of fraud or intentional misrepresentation of facts.
Limits waiting periods to 90 days.
Nineteen states (CA, CO, CT, DE, HI, ME, MD, MA, MI, MN, NV, NJ, NM, NY, NC, OR, UT, VT, VA, WA) and DC have issued state legislation or regulations that require guaranteed issue for health insurance plans.
Twenty-two states (CA, CO, CT, DC, DE, HI, IA, IN, LA, MA, MD, ME, MN, NC, ND, NE, NY, OR, RI, UT, VA, VT, WA) and DC have issued state legislation or regulations that prohibit rescissions.
Sixteen states (CA, CO, CT, DC, DE, HI, MA, MD, ME, MI, MN, NC, NV, OR, UT, VA, VT) and DC have limited waiting periods for health insurance.
Twelve states (CA, CO, DC, DE, HI, IL, ME, MN, NV, NY, OR, RI, VT, WA) and DC prohibit health insurance discrimination based on sexual orientation and gender identity. (Movement Advancement Project)
Five states (CT, MA, NJ, NM, PA) prohibit health insurance discrimination based on gender identity. (Movement Advancement Project)
Twenty-two states (CA, CO, CT, DC, DE, HI, IL, MA, MD, MI, ME, MN, MT, NH, NJ, NM, NV, NY, OR, PA, RI, VT, WA) prohibit insurance exclusions based on transgender status (Movement Advancement Project)
Actuarial values. Establishes four standard tiers of health insurance based on actuarial values –
60%, 70%, 80% and 90% of expected costs. The tiered system sets the minimum amount of coverage that individuals must purchase to receive tax credits and sets benchmarks for premium and cost sharing subsidies.
Twenty-two states (CA, CO, CT, DE, DC, HI, IL, LA, ME, MA, MD, MN, NV, NH, NJ, NM, NY, NC, OR, UT, VT, VA, WA) and DC have issued state legislation or regulations to enforce federal EHBs requirements for plans sold in their individual insurance markets.
Thirteen states (CA, CO, CT, DE, DC, HI, ME, MD, MN, NY, NC, VT, VA, WA) and DC have issued state legislation or regulation to enforce federal actuarial value standards for plans sold in their individual insurance markets.
Several states (CA, DC, CT, MA, NY, OR, VT, WA) are exploring strategies to further experiment with insurance plan design to provide affordable, high-value coverage to consumers. These strategies include implementation of standard plan design or other strategies to guarantee provision of certain benefits without cost-sharing (MD).
Prohibits issuers from charging different premiums to individuals based on gender.
Five states (MA, NJ, NY, OR, VT) have issued state legislation or regulation to impose rating restrictions related to age.
Sixteen states (CA, CO, DC, IA, ME, MD, MA, MI, MN, MT, NH, NY, ND, OR, VT, WA) and DC have issued state legislation or regulation to prohibit rating based on gender.
Sixteen states (CA, CO, CT, HI, ME, MA, MI, MN, NV, NJ, NM, NY, OR, VT, VA, WA) have issued state legislation or regulation to prohibit community rating.
Six states (DC, DE, HI, NH, NJ, PA VT) and DC have created a single geographic rating area for the state.
States have issued state legislation or regulation establishing network adequacy standards at least as comparable as under the ACA.
Established new standards for issuers to use for providing information on benefits and coverage to consumers.
benefits
Exchanges work to promote greater transparency through a simplified approach to “shopping” for health insurance. They are empowered to provide tools that guide consumers through the process of obtaining health insurance, from plan search through enrollment including coordination of outreach and enrollment support via health insurance navigators and assisters.
Regional exchanges: States may form regional exchanges and/or for multiple exchanges may exist in a state (the latter only if the exchanges serve distinct geographic regions).
Upon passage of the ACA, many states moved forward with exploration of an SBE; all states except Alaska received federal planning grants to implement an exchange. Ultimately, time, resource, and political constraints prohibited most states from moving forward with implementation of an SBE and the FFE launched in 34 states in 2013.
· Thirteen states operate SBEs. (CA, CO, CT, DC, ID, MD, MA, MN, NV, NY, RI, VT, WA)
· Six states run an SBE-FP. (AR, KY, OR, NJ. NM, PA)
· Of the states that use the FFE, seven maintain an active role in plan management meaning the state plays an active role in certification and oversight of QHPs sold through the FFE. (KS, ME, MT, NE, OH, SD, VA).
· Six states are actively exploring the transition to a full SBE (ME, NJ, NM, PA, OR, VA).
· No states have formed regional exchanges, nor do any states have multiple operational exchanges.
SBEs have worked diligently to continue to improve operations to provide better value and services to health insurance consumers and help ensure the availability of affordable coverage options. These efforts include continuous improvements to exchange websites and shopping tools, investments in targeted outreach and marketing, and engagement with health insurers to bring choice and value to insurance markets. Through these efforts, states that operate SBEs have maintained increasing or steady enrollment since they launched in 2013.
***Data from CA, ID, and NY are not available and not included in this figure.
In 2012, CMS awarded $2 billion to groups to operate CO-OPs in 24 states (AZ, CO, CT, IA, IL, KY, LA, MA, MD, ME, MI, MT, NE, NH, NJ, NM, NV, NY, OH, OR, SC, TN, UT, WI).
Most CO-OPs struggled, suffering severe financial losses caused by taking on higher than anticipated risk, and sale of underpriced health plans. These losses were further exacerbated in 2015 after Congress capped funding available through the federal Risk Corridor program.
Four CO-OPs remain operational in five states (ME, MT, ID, NM, WI).
Limits FSA and HRA flexibility: Excludes over-the-counter, non-prescribed drugs as reimbursable expenses.
Increased tax on HSA funds: Imposes an increased tax on distributions to HSAs not spent on qualified medical expenses.
Limits FSA contributions: Limits FSA contribution amounts to $2,500 per year, adjusted for cost of living.
1. Coverage must be “at least as comprehensive.”
2. Coverage must be “at least as affordable” (inclusive of all ACA cost-sharing protections).
3. Coverage must be provided to “a comparable number of residents.”
4. Provisions included in the waiver may not increase the federal deficit.
What may be waived? The ACA specifies which types of provisions may be waived. These include rules and legislation governing:
● Health insurance marketplaces;
● Qualified health plan certification; and
● The individual and employer mandates.
To date, the majority of states have leveraged 1332 waiver programs to implement state reinsurance programs (see “reinsurance program” above).
Hawaii used a 1332 waiver to waive implementation of a SHOP. Existing state law includes requirements for employer mandates and coverage that are more stringent than what is required under the ACA.
In October 2018, HHS issued new guidance that loosened the parameters set by the 1332 guardrails, including by counting enrollment in coverage alternatives such as short-term plans so long as at least one plan that met the comprehensiveness standard would still be available in a state’s market. (More details available here.)
· As of January 2020, 37 states (AK, AR, AZ, CA, CO, CT, DE, DC, HI, ID, IL, IN, IA, KY, LA, ME, MD, MA, MI, MN, MT, NE, NV, NH, NJ, NM, NY, ND, OH, OR, PA, RI, UT, VA, VT, WA, WV; not yet implemented in NE) and DC have expanded Medicaid.
· Ten states (AZ, AR, IN, IA, MI, MT, NH, NM, OH, UT) have approved Section 1115 waivers to structure their Medicaid expansion programs in ways not traditionally permitted by federal law. (Kentucky had an approved 1115 waiver for the expansion population that was vacated by a federal judge in March 2019, and then in December 2019. Kentucky Gov. Andy Beshear informed CMS that the state would not move forward with the waiver.)
· 2020 and beyond: 90%
According to a survey of state Medicaid spending published in October 2019, most states use general revenue to cover the state share of expansion costs, and several states reported multiple financing sources. Eleven states reported using existing or new provider taxes; seven states indicated using savings from other state health programs, and two states indicated using cigarette/tobacco taxes.
Maintenance of effort (MOE). Requires states to maintain the Medicaid and CHIP eligibility levels, standards, methodologies, and procedures for children that were in place in 2010 through FFY 2019.
Twenty-one states (AL, AZ, CA, CO, DE, FL, GA, KS, MS, NV, NH, NY, NC, ND, OR, PA, TN, TX, UT, WV, WY) transitioned children ages 6-18 from CHIP to Medicaid; read an implementation analysis of states’ experiences transitioning these children from CHIP to Medicaid.
The MOE for children was extended through FFY 2027 with passage of the HEALTHY KIDS and ACCESS Acts in early 2018 to extend federal CHIP funding; beginning in FFY 2020 the MOE only applies to children in families with incomes under 300% of FPL, meaning that states providing CHIP coverage above this level have the option to reduce these coverage levels.
· Single application for all insurance affordability programs (IAPs), with a “no wrong door” approach so that individuals are determined for eligibility for all IAPs;
· New eligibility determination timeliness standards and move toward “real time” eligibility determinations;
· New modified adjusted gross income (MAGI) income methodology for most non-elderly, non-disabled individuals applying for Medicaid; no asset tests or in-person interviews;
· New requirements related to verification of eligibility criteria; states required to access financial information data through electronic sources, including through the federal hub;
· Medicaid agency coordination with exchanges on eligibility and enrollment functions (e.g., secure transmissions of electronic accounts, whether to use the assessment or determination model for eligibility determinations);
· Requirements to provide consumer outreach and enrollment assistance and develop consumer-facing websites and make notices more consumer-friendly and accessible; and
· Eligibility renewals no more often than every 12 months, using available information from data sources first.
Current status of states’ enrollment and renewal processes as of January 2019:
· Individuals can apply for Medicaid online in all states for the first time;
· Forty-six states can complete real-time determinations and automated renewals;
· Thirty-four states have reported that there was improvement in at least one area of eligibility operations since prior to ACA implementation;
· Thirty-two states determine eligibility for all Medicaid groups through a single system, and in 24 states the MAGI-based eligibility system also conducts eligibility determinations for at least one non-health program; and
· Of the 39 states reporting using the federally facilitated marketplace (FFM) platform, 30 states use the FFM to assess Medicaid eligibility only, and then make a final determination after the case is transferred to the state.
New York has specifically targeted children with complex health care needs with their Health Home model, which has led to a new state option, passed into law in 2019 to allow for states to establish health homes particularly for children with medical complexity.
Six states (CA, ME, MD, MI, RI, and VT) have implemented health homes specifically for individuals with substance use disorder (SUD) or using SUD as a qualifying criterion. The complex biopsychosocial nature of SUD makes health homes and other integrated care models helpful to address the multiple factors that foster SUD in a coordinated environment.
Extended drug rebates to Medicaid managed care organizations (MCOs).
Rebate amounts increased from 18.1% to 23.1% for brand-name drugs, and from 11% to 13% for generics, but the state share is calculated from the pre-ACA rebate amount.
Allowing for rebates for drugs purchased through managed care has increased the number of states carving in prescription drug coverage back into managed care; of the 40 states in 2018 that contracted with comprehensive risk-based MCOs, 35 indicated carving in all or most of their drug coverage.
· For example, California passed a law (SB 1152) in 2018 that requires hospitals to develop a plan for coordinating services and referrals for patients experiencing homelessness to help ensure an appropriate discharge.
Granted biologic manufacturers 12 years of exclusive use before generics could be developed.
Created a national database to share data across federal and state programs related to compliance.
Funds anti-fraud activities.
Enhanced oversight of new provides and suppliers in public programs.
Grants to states to address medical malpractice.
Required skilled nursing facilities in Medicare, and nursing facilities under Medicaid to disclose information regarding ownership, accountability, and expenditures.
The fund supports the Preventive Health and Health Services (PHHS) Block Grant to states, which supports rapid responses to emerging health issues. The CDC allocated $160 million in PHHS Block Grant funding 2015, aligned with Healthy People 2020 goals. The ELC also gave states and cities $60 million in July 2016 to fight Zika.
Established the National Prevention, Health Promotion, and Public Health Council, including various task forces to develop evidence-based recommendation on use of prevention services.
NASHP will be producing additional products that closely examine states’ roles in implementing Medicaid changes and the broader implications of ACA’s Medicaid expansion, along with states’ efforts to provide affordable, high-quality coverage through their health insurance marketplaces.