Newly-Elected Governors Set Their Sights on Healthcare Reforms

The new year brought changes to state leadership across the nation, with 19 governors newly entering the corner office—seven of whom took over from an administration on the other end of the political spectrum. This refresh has brought a surge of new ideas and energy in the realm of state health policy. Below, we highlight

The new year brought changes to state leadership across the nation, with 19 governors newly entering the corner office—seven of whom took over from an administration on the other end of the political spectrum. This refresh has brought a surge of new ideas and energy in the realm of state health policy. Below, we highlight the health policy priorities of the new governors in Maine, California and Colorado, who put health care at the top of their administrations’ agendas. Their health policy agendas address a range of issues—most prominently, expanding access to coverage and implementing prescription drug cost control. They also include a mix of proactive priorities and efforts to reverse course on certain actions (or inactions) of their predecessors.

However, these governors are not alone in taking action on health care. Woven in below are examples of similar priorities and actions taking center stage in other states across the country.

Maine

Medicaid Expansion

Governor Janet Mills’ first action upon taking office in January was to issue Executive Order 1, directing her administration to begin implementing Medicaid expansion “as quickly and efficiently as possible.” Expansion in Maine had passed via a ballot initiative in November of 2017; however, former Governor Paul LePage refused to implement it. Though a judge ultimately ordered the state to move forward with implementation, progress stalled under the prior governor’s administration.

Since issuing the executive order, the new administration has submitted revisions to previously-submitted State Plan Amendments (which had been submitted under the prior administration with a recommendation that they not be approved). In addition to moving forward with implementation of expansion, the state is requesting a July 2, 2018 effective date—as required by the ballot initiative—so that anyone who applied for coverage in the last six months of 2018 could be provided with retroactive coverage. Governor Mills also included funding for Medicaid expansion in her budget, and has said that sufficient funds are available to fund the state portion of the cost of the expansion in state Fiscal Year 2019.

The state has undertaken immediate efforts to begin implementation of the expansion. The Department of Health and Human Services (DHHS) began accepting applications and providing coverage immediately, and is working on streamlining the enrollment process and on outreach in partnership with hospitals. DHHS is also working through 8,000 applications from those who had applied for coverage in 2018 and reevaluating those who lost coverage during that time for eligibility under the expansion. Additionally, the state is seeking permission to accept decisions about Medicaid eligibility by the Federally-facilitated Marketplace. As of March 22nd, over 13,000 individuals (of the estimated 70,000 newly-eligible for the state’s Medicaid program (MaineCare) as a result of the expansion) were enrolled in coverage.

New governors in Kansas and Wisconsin are also eyeing opportunities to adopt Medicaid expansion in their states. Kansas’ Governor, Laura Kelly, is seeking legislative support to do so. This bill is based on legislation that passed in the state in 2017 but is currently stalled in the state legislature.

Wisconsin’s Governor, Tony Evers, issued Executive Order 3, directing the Department of Health Services to develop a plan for Medicaid expansion. The Governor also included funding for expansion in his budget proposal. While the state has already partially expanded Medicaid, because coverage caps at
100 percent of the Federal Poverty Level (FPL), the state is not receiving the available Federal match funding. The Governor’s proposal would implement a full Medicaid expansion and draw down the Federal funds.

The new Governors in Tennessee (Billy Lee) and Georgia (Brian Kemp), on the other hand, are considering ways to expand access to Medicaid outside of a traditional Medicaid expansion. Governor Lee’s Lieutenant Governor is working with state lawmakers on legislation that would direct the administration to seek a Medicaid block grant through a global waiver. The waiver would allow the state to implement vouchers and health savings accounts within the state’s Medicaid program. Some supporters of the bill point to it as a way to expand coverage; the Governor also sees it as an opportunity to improve quality of care.

Governor Kemp announced in his State of the State address that he will seek to expand Medicaid via a waiver as well. The Patients First Act (SB 106)—which advances a plan proposed by the Governor and is pending in the House after being passed by the state Senate—would authorize the Department of Community Health to submit a Section 1115 Medicaid Waiver aimed at expanding access to Medicaid in a flexible manner. This expansion would only extend to individuals with incomes up to
100 percent of the FPL. The legislature included additional funds in the state’s current budget intended to allow the administration to further detail the expansion plan and the waiver. There is also a competing bill in the legislature that would implement a traditional Medicaid expansion.

Other Medicaid Waiver Changes

Governor Mills of Maine has also taken action to reverse the state’s proposed Medicaid work requirement, as well as other proposed changes to the MaineCare program. Former Governor LePage’s administration received approval of their Section 1115 Medicaid Waiver on December 21, 2018. The waiver included a requirement for non-exempt, working-age, able-bodied adults in the state’s MaineCare program to engage in 20 hours per week of paid work or specified community engagement activities. The waiver also included:

  • A new monthly, sliding-scale premium for beneficiaries who are subject to the work requirement and earn at least 51% of the FPL;
  • A copayment for non-emergency use of the emergency department;
  • A $5000 asset test;
  • Termination of retroactive eligibility; and
  • Termination of presumptive eligibility.

After taking office, Governor Mills responded to the Federal approval, effectively withdrawing the waiver by declining the Special Terms and Conditions (STCs). In its place, the Governor has directed the state’s Department of Labor and DHHS to work together to provide vocational training and workforce supports.

Similarly, new governors in Michigan and New Mexico are seeking to reverse course on waivers approved under their predecessors’ administrations. Michigan’s Governor, Gretchen Whitmer, accepted the STCs for a Section 1115 work requirement waiver filed by her predecessor and approved in December of 2018, because of concerns that rejecting the approval would undermine the continuation of the Medicaid expansion. However, she has announced that she is seeking to work with the state legislature to make changes to the requirement in order to “preserve coverage, promote work, [and] reduce red tape…while also minimizing administrative cost to the state.” Specifically, Governor Whitmer is seeking to lower the age limit for the work requirement and eliminate the requirement to report hours.

New Mexico’s Governor, Michelle Lujan Grisham, has directed the state’s Human Services Department to seek Federal approval to reverse various aspects of the state’s Section 1115 Medicaid Waiver, including premiums applicable to Medicaid expansion enrollees, co-payments for non-emergency use of hospital emergency departments and prescription drugs, and the phase-out of retroactive eligibility.

California      

Like Governor Mills in Maine, California’s new Governor, Gavin Newsom, also has his eye on expanding Medicaid coverage—though with a focus on the immigrant population—as part of a broader reform initiative. Governor Newsom introduced a series of health care reforms soon after his inauguration on January 7, 2019. In addition to coverage for undocumented immigrants, his top priorities include negotiating prescription drug prices and potentially adopting a state mandate for individuals to maintain health care coverage.

Coverage Expansions for Immigrant Populations

To address the first of those priorities, the Governor announced a budget proposal to expand the state’s Medicaid program (Medi-Cal) to young adult immigrants (up to age 26) residing in California without documentation of their current legal status. Currently, Medi-Cal offers full Medicaid eligibility and service coverage for undocumented immigrants up to age 19 who meet all other Federal and State categorical and financial eligibility requirements. However, it covers only emergency health care services for undocumented immigrants over age 19.

The Governor’s proposal would enable undocumented immigrants aged 19 to 26 to benefit from a wide range of screening, diagnostic, preventive, rehabilitative, care management, and other non-emergency services that can promote health, reduce risks, and achieve better control of high-cost emergency health care in the long run.

Innovative efforts to achieve such goals are well-underway in New York City, where Mayor Bill de Blasio, now in his second term, announced in January a plan to improve access to care for otherwise uninsured persons. This plan would expand access for undocumented immigrants by strengthening the City’s public health insurance option and guarantee access to a wide range of primary and preventive care services as part of the City’s strategy to achieve emergency health care savings.

Negotiation of Prescription Drug Prices

Governor Newsom is seeking to address the nationwide challenge of high and rising prescription drug costs by negotiating prescription drug prices. His signing of Executive Order N-01-19 authorized the Department of Health Care Services to negotiate prescription drug prices for Medi-Cal. As in other states, Medi-Cal already puts caps on Medicaid payments to pharmacies and recoups rebates from drug manufacturers based on Federal Medicaid rules.  Governor Newsom’s Executive Order would go beyond those caps and rebates, allowing Medi-Cal to leverage its extraordinary market power to achieve deeper discounts.

State Individual Mandate

California’s examination of a potential state mandate for individuals to maintain health coverage is especially noteworthy, as the Federal tax penalty under the Affordable Care Act (ACA)—affecting individuals who failed to maintain health coverage—was recently reduced to $0 for 2019.

Concern about how the elimination of the Federal penalty might affect health insurance markets is not limited to California.  Newly-elected Nevada Governor Steve Sisolak is also considering steps toward a patient protection commission that would examine a potential Nevada mandate for individuals to maintain health coverage, along with other consumer protection measures such as steps to protect Nevadans from high prescription drug prices.

Newly-elected Wisconsin Governor Tony Evers shares concerns about the impact of the Federal penalty’s zeroing out and the ensuing lawsuit (Texas v U.S.) challenging the validity of the Patient Protection and Affordable Care Act (ACA) following that change. In response, he signed
Executive Order 4, directing the Wisconsin Department of Health Services, Insurance Commissioner, and consumer protection officials to make recommendations to him on ways the state can:

  • Improve safeguards for consumers with pre-existing conditions;
  • Enhance health plan affordability, access, and consumer protection;
  • Protect consumers electing to enroll in short-term health plans;
  • Design curricula promoting health insurance literacy for students; and
  • Require insurers to provide greater clarity to Wisconsin consumers about health plan costs and benefits.

Colorado

Colorado’s newly-elected Governor, Jared Polis, came into office with a laser focus on health care costs and his stated long-term goal of universal coverage for Coloradans. One of his first actions was issuing Executive Order B 2019 003 establishing the Office of Saving People Money on Health Care, to be led by Lieutenant Governor Dianne Primavera. The office is tasked with drafting a roadmap to lower health care costs.

Medicaid Buy-In Programs

One option Polis’ executive order directs the new office to consider is developing proposals for lower-cost health care options, such as through the establishment of a Medicaid buy-in program. House Bill 1004 would require the state’s Department of Health Care Policy and Financing (HCPF) and the Division of Insurance to develop a state-sponsored option for health care. Polis has noted the importance of expanding options and his interest in exploring a Medicaid buy-in option.

Colorado is not alone in considering a Medicaid buy-in program. As we recently reported, a number of other states—including New Mexico, under the leadership of new Governor Michelle Lujan Grisham—are likewise looking to expand Medicaid beyond the traditional eligibility standards. New Mexico released an initial report on the feasibility of a Medicaid buy-in program at the end of 2018, and will release a follow-up actuarial assessment this year. At the same time, legislation to advance a buy-in is moving forward in the state legislature.

Prescription Drug Importation

Like Governor Newsom of California, Governor Polis has also honed in on prescription drug prices as a target for the new office’s efforts to contain health care costs, but with a different primary strategy. Governor Polis noted during his State of the State address an interest in exploring the feasibility of allowing drug importation from Canada. To that end, Senate Bill 19-005, which recently advanced to the Senate Appropriations Committee, tasks HCPF with studying the feasibility of implementing importation and, ultimately, allowing the wholesale importation of prescription drugs by the state for resale to Colorado residents.

Colorado has existing state models to look towards in crafting a drug importation program. Vermont passed authorizing legislation in 2018, and more recently, the Vermont Department of Human Services presented a proposed program design for the “Canadian Rx Drug Import Supply Program” to the Vermont legislature for consideration. That report outlines the program requirements and process, a preliminary program design, and considerations for next steps, which will be useful information for other states as they begin to think through an approach to importation.

Other Reform Options

Governor Polis has directed the Office of Saving People Money on Health Care to consider additional options for health care reform in the state, including, of note:

  • Working with the Department of Insurance and the legislature to create a reinsurance program to assist consumers in certain regions experiencing higher health insurance premiums;
  • Developing proposals for lower cost health care options, including via waivers (i.e., a Section 1332 Waiver);
  • Targeted efforts to protect consumers in rural and mountain communities from rising health care costs; and
  • Increasing hospital price transparency.

Health Policy News has been following state health policy reform efforts across the country and will continue to do so as these and similar efforts move forward. To learn more, including details about recent Federal and state approaches to coverage and prescription drug costs, visit our blog.

 

 

 

 

 

 

 

 

  1. […] of similar priorities and actions taking center stage in other states across the country. Click here to read […]

    Reply

Leave a Reply

%d bloggers like this: