Week In Washington: States Are Where the Action Is

January 10, 2019

In the first full week of the year, healthcare policy news was fairly overwhelming. Here’s a quick run-down of things developing across the country…

State News

  • Maine – Maine officially kicked off Medicaid Expansion this week. While a referendum was passed two years ago to implement, the previous governor refused to implement it. With the new governor in place, the state immediately began enrolling people. Expect enrollment decreases in Maine’s individual market over the next few years as people below 138% FPL shift to Medicaid.
  • New York City – Mayor De Blasio announced that the city would be implementing a $100 million “public option”. Public option means different things in different states (as you’ll notice later on). In this case, the plan is to provide subsidized primary care visits for the uninsured. The goal of the program is to cover some care for the currently uninsured and reduce uncompensated care.
  • Washington- In Washington, the governor announced that the state would be pursuing a public option in the state’s Exchange (individual market). While details are still to be worked out, the governor’s legislation (which needs to be passed before becoming law) would require the Exchange to contract with health plans with reimbursement rates to be at Medicare rates. There is also language that the state would enact policies to limit premiums to no more than 10% of income for all enrollees.
  • California- California’s new governor, Gavin Newsom, proposed sweeping new health policies to increase coverage and affordability in the state. It remains to be seen which portions of the proposal will be enacted but currently the plan includes:
    • Expansion of Coverage for Undocumented Individuals up to the age of 26 through the Medi-Cal program (this would be the first in the nation for something so expansive for this population)
    • Subsidies for individuals in the Exchange who have incomes between 400% and 600% FPL
    • An individual mandate for state residents
    • A program that would consolidate the purchase of prescription drugs by the state. The state’s Department of Health Care Services would negotiate with drug companies on behalf of the 13 million Medi-Cal beneficiaries, with a goal of achieving greater savings. This would be the biggest attempt by a state to date to negotiate Medicaid drug costs.  For those interested in current savings negotiated by MCOs (and the difficulty the state may have in achieving greater savings) I’d recommend looking at this research.
  • New Mexico/Colorado – In both states, state legislatures announced they would be introducing a public option/Medicaid Buy-in option to reduce costs and decrease the number of uninsured. You can read about the Colorado proposal here and the New Mexico option here.

If you are looking for a super summary of everything going I’d recommend Vox’s article here that compares and contrasts all of the activity going on.

On Capitol Hill

  • A number of law-makers are introducing prescription drug bills this week, with a goal of reducing prescription drug costs. These range from Medicare negotiating drug costs, to allowing Americans to import foreign drugs, to banning “pay for delay” practices that keep generic drugs out of the market. STAT has a good run down on all the prescription drug bills. If there is health care legislation this year it is likely to focus on prescription drugs.
  • Medicare For All/Single Payer- Hearings and CBO – Another thing to keep an eye on at the Hill is that House Democrats intend to use this Congress to better understand what kind of Medicare for All/Single Payer plans are feasible/affordable/effective. Expect a lot of news on the topic as CBO is being asked to score a series of policy alternatives (in terms of coverage and cost) as well as expert testimony on the topic. 

Regulatory Front- Medicaid

One large rumor making its way around the health policy world is that the Trump Administration is considering allowing partial Medicaid Expansion. Currently if a state approves Medicaid Expansion, the state must effectively expand up to 138% FPL. The Trump Administration is considering allowing states to have Medicaid Expansion at 100% FPL. This may encourage some states that currently have not expanded Medicaid to undertake it (since it would require fewer state dollars). It may also incentivize states who currently have Medicaid Expansion to reduce Medicaid eligibility down to 100% FPL. The latter would have implications for the individual market.


  • The shutdown, (by the time you read this the longest in the nation’s history), is likely to delay the Texas V. USA case about the ACA’s constitutionality since the Department of Justice’s lawyers are furloughed. On the non-health policy front is does sound like tax refunds will be issued even if the government stays closed.

 The Montana Co-Op won a court case that determined that the Federal government did owe the insurance company cost-sharing reduction payments. While this case will be appealed (likely delayed by the shutdown) it is a good reminder individual market issuers could be eligible for all cost-sharing reduction payments that have not been paid since the fall of 2017.