October 13, 2017 Edition

CHEAC Annual Meeting Next Week

Due to the 2017 CHEAC Annual Meeting in Anaheim, the CHEAC Office in Sacramento will be closed for the remainder of the week beginning on Tuesday, October 17. Our regular weekly update will not be published next Friday, October 20, but will resume the following week. We look forward to seeing members in Anaheim!

CHEAC Health Realignment Training Registration Now Open

CHEAC will be hosting a Health Realignment Training on Wednesday, December 6, 2017, from 10:00 am to 3:15 pm at The California Endowment in Sacramento (1414 K Street, First Floor – Adelante Room). The training will include the following sessions:

  • Realignment Historical Overview
  • Realignment Basics
  • Significant Policy Changes Impacting 1991 Realignment
  • CHEAC Realignment Tracking
  • County Realignment Budgeting and Projecting

The cost to attend is $100 and includes all session materials, light breakfast/coffee, and lunch. Seating is very limited; members are encouraged to register as soon as possible.

Registration is now open until Friday, November 3 and may be accessed here. For any questions, please contact CHEAC Staff at admin@cheac.org or 916-327-7540.

Trump Signs Executive Order Directing Overhaul of ACA Regulations, Announces End of CSR Payments

On Thursday this week, President Donald Trump took two decisive actions related to the Affordable Care Act (ACA) which are likely to send health insurance marketplaces into turmoil. Earlier in the day, President Trump signed an executive order directing key agencies to issue new regulations and guidance related to provisions of the ACA. Later, the White House announced it would no longer provide cost-sharing reduction (CSR) payments to health insurance companies which are used to help cover out-of-pocket costs for low-income individuals. Below, we detail both actions:

Executive Order

Trump’s executive order issued Thursday is largely expected to give rise to less expensive and loosely regulated health insurance plans that do not have to comply with certain ACA protections or benefits. Health policy experts have warned that by taking such action, ACA markets could spiral out of control; younger and healthier individuals would be expected to flock to leaner health plans which would leave older and less healthy individuals in ACA markets facing rapidly increasing costs and fewer insurers willing to cover these populations.

The executive order focuses specifically on:

  • Association health plans – Typically used by small business owners, trade groups, and others to group together to purchase health insurance
  • Short-term health insurance plans – Provides temporary, narrow health insurance during unexpected coverage gaps

Association health plans would be federally regulated and permitted to be sold across state lines. Notably, these plans would also be exempt from certain ACA regulations, including required coverage of essential health benefits such as mental health services and prescription drug coverage. These plans would also not have to cover a minimum percentage of enrollees’ health care costs.

Reports suggest the Trump Administration is reinterpreting provisions of the Employee Retirement Income Security Act of 1974 (ERISA), which sets minimum standards for health plans and governs a series of workplace benefits. The Administration is working to redefine what constitutes an “association,” which could include small businesses, trade groups and unions, and even groups of self-employed individuals. This definition is particularly significant as it will determine the number and types of individuals eligible for such plans.

Short-term insurance plans are currently limited to three months of coverage and do not meet minimum essential health benefits under the ACA, including coverage of pre-existing conditions and most other costly benefits. These plans are strictly intended for stopgap coverage for individuals in times of transition and may incur a tax penalty as a result of the ACA’s individual mandate provision. Under Trump’s executive order, the ACA’s three month coverage limit could be extended to as long as one year.

The extent of the impact of these directives will largely depend on how far the Trump Administration and its agencies push to rewrite current regulations and guidelines. According to senior officials, any changes to ACA regulations would go through the traditional rulemaking process that involves public comment and could take months to complete.

Regardless, the expansion of association health plans and extended short-term health insurance plans are likely to spur the emergence of a larger deregulated health insurance system that competes for the same individuals as ACA marketplaces, leading to a potentially destabilizing result across the country.

End of Cost-Sharing Reduction (CSR) Payments

In an additional change to the ACA, the White House indicated that it “cannot lawfully” continue the payment of CSRs to insurance companies to help cover out-of-pocket costs for low-income individuals, despite having done so for eight months of this year. CSRs were started under the Obama Administration, though the payments were never authorized by Congress. Consequently, House Republicans sued the Obama Administration in 2014 and pending litigation has since been ongoing.

CSRs were expected to total approximately $7 billion this year and have been paid in monthly installments. CSRs are designed to assist people earning between 100 and 250 percent of the federal poverty level (FPL) to pay for health insurance accessed through ACA health insurance exchanges. Without CSRs, insurance markets are expected to quickly unravel. Health insurers have indicated they will need to charge significantly higher premiums and potentially even exit the ACA marketplace altogether.

Recall late this summer, the Congressional Budget Office (CBO) released a report analyzing the potential impact of terminating CSRs. The CBO estimated that ending CSRs after December 2017 would:

  • Increase Health Insurance Marketplace premiums by approximately 20 percent in 2018 and 25 percent in 2020;
  • Increase the federal deficit by $194 billion over the next decade
  • Increase the number of uninsured Americans by 1 million in 2018; and
  • Result in approximately 5 percent of Americans living in areas without any insurers willing to sell plans in the Health Insurance Marketplace for the next year

Another analysis by the Kaiser Family Foundation has estimated that ending the payments could cost the government $2.3 billion more than it would otherwise spend in 2018 and result in skyrocketing premiums.

Given that Congress did not appropriate funds, the Trump Administration determined it will stop CSR payments effective immediately. Health policy experts have indicated Trump’s move on CSR payments are likely to result in greater instability and uncertainty across all health insurance marketplaces, particularly in those that are already experiencing challenges with rising premiums and exiting insurers.

With the immediate end of CSR payments and insurance exchange open enrollment beginning on November 1, health insurance companies will have the option to adjust their rates or completely pull out of the market. At this time, it is unclear if or how many insurance companies may leave markets. Making adjustments to exchange health plans is expected to be a lengthy process of working with state regulators and could vary by state.

A handful of state attorneys general, including California’s Xavier Becerra, announced their intention on Friday to file a federal lawsuit against the Trump Administration arguing that withholding CSRs is unlawful and violates mandate provisions of the ACA.

Many members of Congress, including Republicans, have expressed worry about the sudden end of CSR payments. Complicating potential Congressional action, the Trump Administration announced on Friday opposition to any bipartisan attempt to reinstate funding for CSR payments. This latest announcement deals a significant blow to the ongoing work of Senators Lamar Alexander (R-Tennessee) and Patty Murray (D-Washington) to strike a bipartisan deal on fixing components of the ACA to stabilize markets and continue health insurance subsidies for low-income Americans.

Uncertainty around federal health insurance marketplaces is perhaps at one of its greatest points given Trump’s executive order and announcement on CSR payments this week. It remains to be seen what impact these actions will have on insurance marketplaces, coverage rates, and legislative attempts to stabilize the ACA.

Governor Brown Declares State of Emergency to Increase Supply of Hepatitis A Vaccines

On Friday, Governor Jerry Brown issued an emergency proclamation that permits the state to increase its supply of Hepatitis A vaccines in order to control the current outbreak throughout the state. While immunizations have been distributed to targeted areas, additional supplies are needed. The emergency proclamation gives the California Department of Public Health (CDPH) authority to immediately purchase vaccines directly from manufacturers and distribute them to impacted communities. Governor Brown’s emergency proclamation is available here, and a press release from CDPH is available here.

CHEAC is engaged in communication with CDPH to determine how local jurisdictions can access the increased supply of Hepatitis A vaccination supplies. Relevant information will be provided to CHEAC Members as it becomes available.

Two Days Remain for Governor to Take Action on Bills

Facing a Sunday deadline to take action on remaining bills approved by the Senate and Assembly, Governor Jerry Brown vetoed and signed into law a wide range of measures this week. Notably, Governor Brown signed a series of measures to improve services and support for women, children, and families, including AB 10 (C. Garcia) that requires public schools serving low income students to provide feminine hygiene products at no charge and AB 480 (Gonzalez Fletcher) which provides CalWORKs enrollees assistance with diaper costs for children under three years old.

CHEAC will issue its final bill chart early next week following Governor Brown’s October 15 deadline to take action on bills. Below, we highlight several CHEAC bills that were vetoed or signed into law this week.

Health Coverage

AB 340 (Arambula) – Support

Signed by Governor

Governor Brown signed into law AB 340 by Assembly Member Joaquin Arambula. The measure requires DHCS to convene an advisory group by May 2018 to update, amend, or develop protocols to screen children for trauma within the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Program. With an increased interest in adverse childhood experiences (ACEs), CHEAC supports efforts to better understand and address the lifelong health, social, and economic impacts of childhood trauma.

SB 17 (Hernandez) – Watch

Chapter 603, Statutes of 2017

Senator Ed Hernandez’s SB 17 was signed into law by Governor Brown. The measure will require drug manufacturers to give health plans and insurers a 60-day advance notice prior to increasing the list price of prescription drugs. Health plans would also be required to report their most expensive drugs, drugs with the highest year-over-year price increase, and the most frequently prescribed drugs, among other reporting requirements. While the measure faced strong opposition from the pharmaceutical industry, it was supported by consumer advocates, health organizations and providers, insurers, and business groups.

SB 323 (Mitchell) – Support

Chapter 540, Statutes of 2017

Governor Brown signed into law Senator Holly Mitchell’s SB 323. The measure will allow federally qualified health centers (FQHCs) and rural health centers (RHCs) to have Drug Medi-Cal, specialty health services, and specialty mental health services reimbursed as contracted with DHCS or a county. CHEAC supported this measure as a way to help increase counties’ ability to recruit FQHCs and RHCs to provide behavioral health and substance use disorder services and to improve the ability to deliver integrated services to Medi-Cal eligible individuals.

Health Equity

AB 210 (Santiago) – Support

Chapter 544, Statutes of 2017

Governor Brown signed into law AB 210 by Assembly Member Miguel Santiago. This measure was sponsored by the County of Los Angeles and would allow counties to establish adult and family multidisciplinary teams to facilitate the expedited identification, assessment, and linkage of individuals experiencing homelessness to housing and supportive services. CHEAC supported this measure as a means to achieve better coordination of services and strengthen continuity of care of individuals experiencing homelessness.

SB 138 (McGuire) – Support

Signed by Governor

Senator Mike McGuire’s SB 138 was signed into law by Governor Brown. The measure requires local education agencies participating in the federal school meal program to implement a system to directly certify pupils eligible for free or reduce priced meals using Medi-Cal participation data. The measure also requires high poverty schools to apply to operate a universal meal service program which allows schools to provide free breakfast and lunch to all students without their families having to apply. CHEAC, along with the Health Officers Association of California (HOAC) and the California Welfare Directors Association of California (CWDA), supported the measure.

Drug and Alcohol Services

AB 40 (Santiago) – Support

Chapter 607, Statutes of 2017

Assembly Member Miguel Santiago’s AB 40 was signed into law by Governor Brown. The measure allows the CURES database to integrate with other health information technology systems and permits health practitioners and pharmacists to access the database. CHEAC supported this measure as a modest, but important strategy in addressing the complicated and rising opioid epidemic in California.

AB 715 (Wood) – Watch

Vetoed by Governor

Governor Brown vetoed AB 715 by Assembly Member Jim Wood. The measure would have required CDPH to convene a workgroup to review existing guidelines for opioid prescriptions for acute short-term pain and develop statewide guidelines for best practices in prescribing opioids. In his veto message, Governor Brown identified existing workgroups and activities around the topic of opioid misuse and declared AB 715 unnecessary.


AB 725 (Levine) – Support

Vetoed by Governor

Assembly Member Marc Levine’s AB 725 was vetoed by Governor Brown. The measure would have banned all smoking, including e-cigarettes, and disposal of cigar and cigarette waste at state coastal beaches and parks. The measure permitted the director of the California Department of Parks and Recreation to exempt certain areas within the park system from the smoking ban. In his veto message, Governor Brown expressed concern with the violation fee amount, which could have amounted to $250 after other mandatory state fees. This is the second year in a row Governor Brown has vetoed a measure to ban smoking at state beaches and parks.

SB 386 (Glazer) – Support

Vetoed by Governor

Governor Brown also vetoed SB 386 by Senator Steven Glazer. This measure was nearly identical to AB 725 and would have also banned all smoking, including e-cigarettes, and disposal of cigar and cigarette waste at state coastal beaches and parks. However, SB 386 carried a higher violation fee amount. Governor Brown indicated a violation could reach $485 after other mandatory state fees and cited this as his reason for rejecting the measure in his veto message.

CDPH to Offer Training Webinar Next Week on 2018 LHD ICR

The California Department of Public Health (CDPH) will be offering a training webinar on 2018 local health department (LHD) indirect cost rates (ICR) and a walkthrough of new improvements and enhancements to the ICR system on Wednesday, October 18 from 9:30 am to 12:00 pm. Webinar call-in information is available here.

A recording of the webinar is expected to be available online after the October 18 event. An additional training webinar will also be held on October 25, and information will be provided as the date nears.

CDC Announces Public Health Crisis Response Cooperative Agreement Opportunity

The U.S. Centers for Disease Control and Prevention (CDC) recently announced a cooperative agreement opportunity to establish a roster of public health departments that would be pre-identified and pre-approved for rapid funding by CDC for public health emergencies of such magnitude, complexity, or significance that it would have an overwhelming impact upon, and exceed resources available to, the jurisdiction. Funding tied to the recent announcement will be made available once CDC has determined a public health emergency exists or is considered imminent. The notice of opportunity is available here; more information is also available here.

National Academies Launches Interactive Guide on Opioid Epidemic

The National Academies of Sciences, Engineering, and Medicine (NASEM) has launched an interactive guide providing an overview of the recent National Academies report Pain Management and the Opioid Epidemic: Balancing Societal and Individual Benefits and Risks of Prescription Opioid Use. The guide outlines trends in the prescription and illicit opioid epidemics, links to additional resources, and provides the report’s recommendations for action by federal and state agencies, researchers, health professional organizations, and more. The interactive guide is available here.

Public Health Foundation to Hold Population Health Webinar

The Public Health Foundation (PHF) will be holding a webinar entitled A Model Population Health Initiative: Reducing Costs by Going Upstream on Monday, October 23 from 10:30 am-11:30 am PST. The webinar will highlight the winner of the 2017 Future of Population Health Award and the initiative’s work in providing temporary transitional housing for homeless patients discharged from the University of Vermont Medical Center. The presentation will detail success factors, challenges faced, and the future expansion of this model initiative. For more information and to register, visit here.