The Launch of Health Reform in Eight States

Summary by the Market Institute of Urban Institute Research

With support from the Robert Wood Johnson Foundation, the Urban Institute is undertaking a comprehensive monitoring and tracking project to examine the implementation and effects of the Affordable Care Act. The Urban Institute will document changes to the implementation of national health reform in Alabama, Colorado, Illinois, Maryland, Michigan, Minnesota, New Mexico, New York, Oregon, Rhode Island, and Virginia to help states, researchers, and policy-makers learn from the process as it unfolds.

The Urban Institute recently released a series of papers detailing their research on the rollout of Obamacare in certain states: http://www.urban.org/publications/413035.html

State Flexibility Is Leading to Very Different Outcomes

• States that have chosen to expand Medicaid under the ACA will benefit from a large influx of new federal revenues
• States expanding Medicaid will see significant increases in federal payments because of the Medicaid expansion
• Like all other states, Alabama and Virginia will have reductions in Medicare provider payment rates and Medicaid and Medicare DSH payments under the law, they will not have the sizable influx of federal dollars from the Medicaid expansion to offset these reductions that Medicaid expansion states will receive

The Launch of the Affordable Care Act in Selected States: Coverage Expansion and Uninsurance

• They project a small net increase in employer coverage in all of our study states, with the exception of New York
• The net effect of all the ACA-related changes in coverage in the Medicaid expansion states will be a substantial reduction in the number of people uninsured in each state

The Launch of the Affordable Care Act in Selected States: The Financial Impact on States from the Affordable Care Act

• States that are expanding Medicaid will see significant increases in federal fund inflows, primarily because they have adopted the Medicaid expansion
• Three of the states that are expanding Medicaid—Oregon, Colorado, and Minnesota—will face relatively small net increases in state expenditures on Medicaid/CHIP under the ACA, even though federal dollars will increase significantly in each state
• States not adopting the Medicaid expansion will bear all of the pain but receive none of the increased revenue that would have come through the expansion

The Launch of the Affordable Care Act in Selected States: Building ACA-Compliant Eligibility and Enrollment Systems

• The five states that chose to operate a SBM—Colorado, Maryland, Minnesota, New York, and Oregon—were responsible for developing the IT system to support their Marketplaces
• The initial website launch was rocky for each of these five State Based Marketplaces – Some sites have been operating successfully for months; others are still struggling to overcome technical glitches more than midway through the initial open enrollment period
• For all the study states and across the Marketplaces more generally, the pace of enrollment has increased as the open enrollment period has progressed and as technical issues have been addressed

The Launch of the Affordable Care Act in Eight States: Outreach, Education, and Enrollment Assistance

• The five states that moved to implement health reform—Colorado, Maryland, Minnesota, New York, and Oregon—each engaged in similar planning efforts to prepare for the launch of their coverage expansions
• The level of funding for these public education and media campaigns is significant, ranging from a low of $2.5 million in Maryland to a high of $40 million in New York
• The federal government’s planned marketing campaign for the 34 Federally Facilitated Marketplace (FFM) and Federally Facilitated Marketplace-Partnership (FFM-P) states has been delayed
• States and the federal government have also planned and invested in a variety of application assistance efforts designed to help individuals enroll
• A total of $67 million was earmarked by the federal government to support Navigators across the 34 FFM/FFM-P states during the first year of operations

The Launch of the Affordable Care Act in Selected States: Insurer Participation, Competition, and Premiums

• In the State Based Marketplace study states, a significant number of insurers are participating in the Marketplaces. For example, 17 insurers in New York, 11 in Oregon, and 10 in Colorado were offering plans in at least some markets
• In general, plans available in the individual Marketplaces in both the SBM and FFM states to be attractively priced
• One outcome from increased competition has been the development of narrow network plans consisting of providers willing to accept lower payment rates for health insurance Marketplace products

The Launch of the Affordable Care Act in Eight States: Reforming Insurance Markets and Protecting Consumers

• All five SBM states have made changes to their individual and small group market health insurance laws in order to implement these seven new standards
• Insurers nationwide will also need to comply with new rating requirements. To effectuate the new national standard, Colorado, Maryland, and Minnesota enacted legislation to implement the ACA’s new rating rules

The Launch of the Affordable Care Act in Selected States: Small Group Marketplaces

• The federal government has delayed online enrollment in the SHOP for one full year. In the interim, consumers in a federally facilitated state can enroll through a broker or a navigator
• In general, there are many plan options for employers and employees at each AV level in the state-based SHOP Marketplaces included in the study
• The FFM SHOP website was at first difficult to access due to high traffic volume and programming flaws, but it has since been upgraded and its utility improved
• Some of the state SHOP sites studied are easier to navigate than others, but most of them provide a wealth of knowledge for the consumer, facilitate plan comparisons, and utilize state-specific branding to help personalize the consumer experience
• Overall, the SHOP Marketplaces, both the SBMs and FFMs, have been slower to make progress compared with their nongroup Marketplace counterparts

The Launch of the Affordable Care Act in Eight States: The Problem of Provider Capacity

• Numerous provisions in the ACA provide grants and incentives for reforming health delivery systems in ways that promise to improve access by enhancing the efficiency, coordination, and quality of service delivery, including such strategies as Accountable Care Organizations (ACOs), Collaborative Care Networks, and Patient-Centered Medical Homes
• The ACA also addresses primary care workforce supply challenges by increasing funding for the National Health Service Corps (NHSC) by $1.5 billion over five years
• The ACA requires states to increase Medicaid payments for certain primary care procedures—rendered by family and general practitioners, pediatricians, and other subspecialists who provide primary care—to 100 percent of Medicare rates – this rate hike—paid for entirely with federal dollars—lasts only for the two-year period of 2013 through 2014