California created its own state-based individual mandate, added help for middle-income consumers purchasing coverage on the individual market, and agreed to pay for Medi-Cal coverage for undocumented young adults in a $213 billion legislative budget deal.

In the budget pact, approved June 13, California became the first state in the nation to offer subsidies for health coverage for those between 400% and 600% of the federal poverty level.

By Jane Anderson

California created its own state-based individual mandate, added help for middle-income consumers purchasing coverage on the individual market, and agreed to pay for Medi-Cal coverage for undocumented young adults in a $213 billion legislative budget deal.

In the budget pact, approved June 13, California became the first state in the nation to offer subsidies for health coverage for those between 400% and 600% of the federal poverty level.

The penalties paid by those who fail to purchase qualifying health insurance will help pay for those subsidies, according to the state. Beginning in 2020, adults will be charged $695 or 2% of their household income, whichever is more, for failing to purchase health insurance.

The legislation also expands Medi- Cal coverage to undocumented young adults ages 19 through 25 at the state’s expense, which will add approximately 90,000 young adults to the Medicaid program at a cost of around $98 million per year.

“We think for the long-term health of the exchange, having a mandate will help to get lower-risk people into the exchange,” L.A. Care Health Plan CEO John Baackes says. “It also gets the younger cohort used to participating and getting access to care whenever they need it.”

The budget deal left two other top issues for health insurers — a tax on managed care organizations and a new statewide drug purchasing plan — unresolved.

Nearly eight months ago, CMS issued guidance loosening rules on individual-market exchanges for states seeking Section 1332 waivers under the Affordable Care Act (ACA). Yet despite CMS’s efforts to change states’ strategy, this year Idaho is soon to become the first, and likely one of only two states, to seek what morphed from “state innovation waiver” to “state empowerment and relief waiver” for its controversial Medicaid expansion plan. Idaho will do so by going beyond CMS’s four initial templates, and with the endorsement of two major health insurance carriers in the state.

By Judy Packer-Tursman

Nearly eight months ago, CMS issued guidance loosening rules on individual-market exchanges for states seeking Section 1332 waivers under the Affordable Care Act (ACA). Yet despite CMS’s efforts to change states’ strategy, this year Idaho is soon to become the first, and likely one of only two states, to seek what morphed from “state innovation waiver” to “state empowerment and relief waiver” for its controversial Medicaid expansion plan. Idaho will do so by going beyond CMS’s four initial templates, and with the endorsement of two major health insurance carriers in the state.

Under Idaho’s “Coverage Choice Waiver,” Idahoans making between 100% and 138% of the FPL could opt to get health insurance coverage either through Medicaid or via the Your Health Idaho state exchange.

An estimated 18,000 Idahoans falling into this income group are currently covered by exchange plans. If CMS were to approve the waiver, these individuals would be able to keep the federal tax credits they get now for exchange policies and retain private coverage.

But an expert sees such waiver proposals as problematic. Almost every state’s legislative session is ended for 2019, “and we’re almost past the deadline for anyone to do anything adventurous for 2020 [ACA exchange] enrollment…so the writing is on the wall” for state empowerment waivers, says Joel Ario, a managing director of Manatt Health who previously served as director of HHS’s Office of Health Insurance Exchanges.

While CMS’s Verma is urging states to try more transformative strategies, Ario asserts that “would come at the cost of hurting people in the larger risk pool.” Yet states’ pursuit of Section 1332 reinsurance programs to cut premium rates by perhaps 5% to 10% “is a solid step forward,” he says.