Highlight on Maine: Able-bodied MaineCare recipients could be subject to more stringent requirements

“Able-bodied adults” would be subject to work/education requirements and a lifetime limit of five years under changes Mary Mayhew, director of the Maine Department of Health and Human Services, proposed to Maine’s Medicaid program, MaineCare. In a letter to HHS Secretary Tom Price, Mayhew said she would be seeking the changes in a forthcoming formal 1115 demonstration waiver request.

Mayhew’s letter comes at the heels of a referendum campaign to expand Medicaid in Maine at, according to Mayhew, a cost of $400 million over the next five years. A second motivation is the apparently sympathetic Trump Administration, which has proposed replacing Medicaid with block grants.

Mayhew said that the state has expanded its Medicaid program over decades, resulting in the use of hundreds of millions of state dollars “to turn Medicaid into an entitlement program for working-age, able-bodied adults.” MaineCare serves 270,000 individuals, just over 20 percent of Maine’s population, which, Mayhew said, represents a 22 percent reduction in enrollment since 2011.

Mayhew’s Medicaid proposals include the following:

  • work or education requirements for able-bodied adults in the Medicaid program, similar to the work requirements for Temporary Assistance for Needy Families (TANF) or Able-Bodied Adults Without Dependents (ABAWDs) in the Supplemental Nutrition Assistance Program (SNAP);
  • a five-year lifetime limitation on able-bodied adults’ eligibility for Medicaid;
  • limiting non-emergency transportation (NET) to situations where the underlying service to or from which individuals are being transported is a required Medicaid service and requiring them to access existing transportation resources before accessing NET;
  • requiring monthly premiums for adults who are able to earn income;
  • requiring monthly coinsurance of a set amount (approximately $20) for all members, cost-sharing of $20 for using the emergency department, and fees for missed appointments;
  • applying a reasonable asset test to Medicaid; and
  • waiver of the retroactive coverage of services incurred during the 90 days before Medicaid eligibility.


Highlight on Illinois: Exchange rates rise in the Land of Lincoln

Illinois residents purchasing individual health insurance plans through the Patient Protection and Affordable Care (ACA) (P.L. 111-148) could pay rate increases in 2017 as high as 55 percent, according to rate information released by the Illinois Department of Insurance (DOI). The agency submitted rate increases to the federal government ranging from 43 percent to 55 percent, depending on the type of plan—bronze, silver, gold.


The submitted rates are not final. Although the DOI has submitted the 2017 rate filings to CMS, the rates will not be finalized by federal CMS until October, 2016. Additionally, network and premium information will not be available until that time. The DOI announced that the rate information was published as early as possible to allow Illinois families to make better-informed decisions regarding health care coverage. The DOI acknowledged the rate increases as “a very difficult outcome for consumers.”


The average rate increase across all ratings areas for the lowest bronze plan is 44 percent. The rate change is lowest in Kane, Du Page, Will, and Kankakee counties, where the rate change is a 10 to 25 percent increase. Counties like Lake and Cook have a 40 to 60 percent increase, whereas counties including La Salle and McLean have a 20 to 40 percent increase for their lowest bronze plans.

The average rate increase across all ratings areas for the lowest silver plan is 45 percent. Counties like Cook and Kendall saw a 40 to 60 percent increase, whereas counties like Du Page, Sangamon, and McLean saw increases of 25 to 40 percent. The average rate increase across all ratings areas for the second lowest silver plan is 43 percent.

The highest average rate increase across all ratings areas is for the lowest gold plan—an increase of 55 percent. Although several counties do not have gold plan offerings, rate increases in some counties, including Peoria County, are as high as 60 to 70 percent. Rate increases for the lowest gold plan in counties like Cook, McLean and Sangamon are 40 to 60 percent.

In practical application, the new rates mean that a 21-year-old nonsmoker who purchases the lowest-priced silver plan in Cook County in 2017 could pay a premium of $221.13 a month—an increase from $152.42 a month in 2016. In Lake and McHenry counties the increases are more dramatic for the same consumer, $268.03 a month in 2017, up from $212.23 a month. However, for some, the rate increase is not as massive as it seems because 75 percent of Illinois exchange enrollees receive tax credits to offset premium costs.


The DOI attributed the rate increases to several factors, including the federal government’s failure to make payments to insurers promised as part of the ACA and an overall increase in medical and pharmaceutical costs. Additionally, the DOI pointed to the fact that, until 2017, policyholders are permitted to keep non-ACA compliant plans, a factor that the DOI said has harmed insurers’ risk pools and placed upward pressure on plan costs.

Highlight on New Jersey: OMNIA plan tiers and fears

Horizon Blue Cross Blue Shield of New Jersey is trying to change the commercial health care market in New Jersey with a product called the OMNIA Health Plan. With a tiered provider network model, Horizon plans to use the OMNIA plan to reward patients who choose top-tier providers with cheaper deductibles and copays. In large part due to the manner in which Horizon has selected which providers belong to which tiers, smaller (lower-tiered) providers are objecting to the plan, noting that it will drive smaller providers and competition out of the industry.


The plan relies upon a two-tiered provider model. The highest tier—Tier 1—includes 34 hospitals and the state’s biggest health care changes. Tier 2 is comprised of smaller providers, free-standing, and Roman Catholic providers. While members of the OMNIA plan can select either type of provider, subscribers who go to a Tier 1 facility are rewarded with lower copays and deductibles. Horizon’s tiered-approach is saving on costs and, as a result, the OMNIA plan is 15 percent cheaper than Horizon’s traditional plans.


Although the New Jersey Department of Banking and Insurance agreed in September 2015, to allow the OMNIA plan to launch in November 2016, Horizon is feeling pressure from lawmakers and providers. Lawmakers announced concerns that the plan was being rushed and was not adequately vetted. Additionally 17 of the Tier 2 hospitals sued the state banking regulators in November 2015, to block the plan. The Tier 2 hospitals alleged that the Department of Banking and Insurance approved the plan before making sure OMNIA met state requirements. Subsequently, additional hospitals sued Horizon, alleging that the insurer breached in-network provider contracts by moving hospitals to lower tiers without adequate notice.


As of March 2016, an internal investigation by the New Jersey attorney general concluded that Horizon broke no state laws in creating OMNIA. Additionally, 234,000 people enrolled in OMNIA. Many of OMNIA’s enrollees—41,000—were previously uninsured.

Additional opposition

In addition to provider and lawmaker opposition, physician organizations have joined the battle against Horizon’s OMNIA. Physicians are objecting to the way Horizon requires that physicians—under threat of penalty—explain to patients that they can save money by using Tier 1 providers. If physicians do not explain the cost sharing benefits of the network to patients, physicians risk being terminated from Horizon’s Blue Cross Blue Shield of New Jersey networks. One physician group, The Medical Society of New Jersey, filed an amicus brief in support of the 17 Tier 2 hospitals challenging the Department of Banking and Insurance decision to approve the OMNIA plan.


A key issue in the OMNIA litigation is transparency surrounding the formula used to develop the two-tiered system. While the plaintiffs’ attorneys have seen the formula, the insurer’s method remains cloaked behind protective court orders. Horizon argues that the formula behind OMNIA is proprietary and essential to the insurer’s competitive advantage. Although the formula has not been made public, opponents have obtained some favorable court treatment. For example, a state court ruled that Horizon had to disclose a financial impact analysis the insurer conducted on the effects that the OMNIA plan will have on Tier 2 hospitals.

Highlight on Oklahoma: Budget cuts are leaving providers weak

An Oklahoma budget deficit is leading to actual and proposed rate cuts that could have a dramatic impact on patients and providers.  This month, the State Medicaid agency proposed to cut Medicaid (SoonerCare) provider rates by 25 percent, and the State Health Department eliminated state funding for community health centers. Mental health care providers are also hurting under the strained budget with the Oklahoma Department of Mental Health and Substance Abuse Services (ODMHSAS) taking on $13 million in new budget cuts.


The Oklahoma Health Care Authority (OHCA) announced that the 25 percent rate cut could begin impacting providers on June 1, 2016. The rate cuts would impact reimbursement for all 46,000 SoonerCare providers, including hospitals, physicians, durable medical equipment suppliers, nursing facilities and pharmacies. The cuts could have a substantial impact on the 800,000 Oklahomans that are beneficiaries of the program, 524,000 of which are children. Some Medicaid providers in the state have already said the cuts will be so devastating that they will either have to reduce salaries or stop treating SoonerCare patients altogether. Nico Gomez, CEO of the OHCA, said that in addition to the impact of providers that stop accepting SoonerCare, many rural providers might move their businesses to larger communities in order to remain financially stable. Because the program receives federal matching funds, the $64 million rate cut will reduce SoonerCare funding by $164 million in combined state and federal funds.


Oklahoma is currently operating with a physician shortage. Now, with lowered Medicaid reimbursement rates, there are concerns that the state will have an even harder time retaining and recruiting doctors. The cuts also hit community Health Centers. By cutting all state funding for federally qualified health centers (FQHCs), facilities that 175,000 Oklahomans use for primary, dental and mental health care services, the state took away an important source of care for individuals that do not have health insurance. Funding for the community health centers was provided through the uncompensated care fund, but because that fund has been steadily shrinking, the state department of health was forced to pull the funding, which will save the health department about $700,000 for the remainder of the year. Some community health centers, like Variety Care are being forced to reduce hours and the services they offer to stay open. Variety Care CEO, Lou Carmichael, said that the result of the cuts is that individuals without insurance will go to hospitals for primary care.

Mental Health

The $13 million in cuts to mental health is being tacked on to $22.8 million in cuts made since January. Because the state relies on federal matching for many mental health services, the total impact of the cuts will be even higher, almost $40 million. The new cuts are feared to be more impactful than the first round because they more directly impact front-end treatments to help those suffering from mental illness and substance abuse. The cuts include a $7 million reduction in the payments to private mental health and substance abuse facilities, which come a year after those facilities provided $12 million in services that ODMHSAS was unable to pay for. The cuts are also forcing reductions in the number of therapy sessions available to children and adults with mental illnesses and substance abuse disorders. How much strain providers can endure remains to be seen, however, as the cuts keep coming, lawmakers are falling under growing pressure to provide greater funding to the state’s health care programs.