In 2017, Alaska, Minnesota, and Oregon became the first three states to receive federal approval to establish state reinsurance programs with federal funding via section 1332 State Innovation Waivers, which authorize states to waive key requirements under the law in order to experiment with dif­ferent policies in the individual and small group insurance market within certain guardrails. A new SHADAC analysis, prepared for the Robert Wood Johnson Foundation, examines the use of 1332 State Innovations Waivers to stabilize individual health insurance markets within these states. SHADAC researchers compared the use of this strategy in Alaska, Minnesota, and Oregon, assessing how the 1332 waiver process was navigated; identifying lessons learned about this process and about different reinsurance models; and pinpointing future concerns about the use of reinsurance programs. 

SHADAC conducted an in-depth document review and qualitative inter­views with individuals - including state agency and executive staff, legislators, actuarial analysts, health plan representatives, program administrators, and other stakeholders - across the three study states who were involved in the design and/or implementation of state reinsurance programs and the 1332 waiver application process. Each of the states faced numerous challenges in their individual health insurance markets (high costs, increasing premiums, shifting marketplace makeup and plan availability, etc.) that led them to establish state-based reinsurance programs. However, as the report details, state policymakers found unique ways to facilitate both the waiver application and implementation processes, including working hand-in-hand with insurance companies, leveraging existing infrastructure and experience within their own agencies, having mechanisms in place to get analysis done quickly, and engaging with the state’s congressional delegation.

Alaska, Minnesota, and Oregon: Reinsurance Models
In 2017, Alaska, Minnesota, and Oregon became the first three states to receive federal approval to establish state reinsurance programs with federal funding via section 1332 State Innovation Waivers, which authorize states to waive key ACA requirements in order to experiment with dif­ferent policies in the individual and small group insurance market within certain guardrails.

• Alaska’s state reinsurance program is condition-based, paying 100% of claims from policyholders who have one of 33 possible specific medical conditions.
• The Minnesota Premium Security Plan (MPSP) is a traditional reinsurance model with an attachment point of $50,000 and a cap of $250,000 with payment of claims at an 80/20 coinsurance rate.
• The Oregon Reinsurance Program is a traditional reinsurance model with a 50/50 coinsurance rate, as well as an attachment point and cap to be determined at a later date.

Challenges and Facilitators of the 1332 Waiver Application Process
Interviewees across all stated noted numerous challenges during the 1332 waiver application process, including:

• Securing a state funding source
• Navigating rapid shifts in the political climate that affected the application process
• Being able to access timely data to support their applications
• Identifying a waivable requirement of the ACA

Respondents agreed, however, on common facilitators that aided the application process, which they listed as:

• Working hand-in-hand with insurance companies to keep them in the market
• Leveraging existing infrastructure and experience to support the state-based programs
• Using previously existing mechanisms to get analysis done quickly
• Engaging with the state’s congressional delegation

Lessons Learned about 1332 Waiver Application and Implementation Processes
Interview respondents also identified a number of lessons learned by the states as they navigated both the application and implementation stages for their 1332 waivers. A few key points are listed below.

• There are both pros and cons to condition-based vs. traditional reinsurance models.
  States noted that they chose reinsurance models that would be easy to implement in a short timeframe. Traditional models were less complex, but condition-based models maximized cost of care options.
• Robust communication efforts with multiple stakeholders were needed.
  Respondents consistently emphasized the need for dedicated communication between state agencies, legislators, health insurers, congressional delegations, CMS officials, and community stakeholders in order to put together a successful waiver application. 
• Microsimulation models allowed states to be responsive to rapidly shifting policies.
  States were required to submit actuarial and economic analyses as part of their waiver applications, and the microsimulation models used by Alaska and Oregon allowed them to respond to several real-time policy changes (such as the repeal of the individual mandate).

Future Concerns
Though respondents in all three states felt that state-based reinsurance was necessary to help stabilize the markets, they did report a number of concerns for the future of these programs.

• It is difficult to measure the impact of reinsurance programs beyond premium rates.
  All three states reported a reduction in premium costs in the individual market as a result of implementing a reinsurance program, but other evaluations of program impacts have not been clear, often due to lack of data.
• No accountability measures were included.
  Due to the short turnaround time to both apply for and implement their 1332 waivers, none of the study states included accountability measures within their reinsurance programs for the individual market.
• Reinsurance is only a short-term fix and does not address the underlying problem of health care costs.
  Although interviewees from Alaska, Minnesota, and Oregon felt that state-based reinsurance was an important tool to stabilize the individual market, all questioned the viability of such programs as a long-term solution, commenting that individual marketplaces were only part of the whole, and only when the larger picture is addressed can the root of the issue of high health care cost be properly addressed.

Download a PDF of the report.

Related Readings and Resources

Modeling State-based Reinsurance: One option for Stabilization of the Individual Market

Minnesota’s 13332 Reinsurance Waiver Dilemma

Resource: 1332 State Innovation Waivers for State-Based Reinsurance

An analysis by SHADAC examines housing affordability, looking specifically at the percent of rental households that spend more than 30% of their monthly income on rent. This measure is now available on SHADAC’s State Health Compare for all states from 2012 through 2017, and can be broken down by household income, Medicaid enrollment, race/ethnicity, and disability status.[1]

Background
SHADAC analyzed a key social determinant of health factor—housing affordability. A lack of affordable housing contributes to housing instability and homelessness, both of which are strong predictors of higher health care costs and poor health outcomes, among others.[2] Many states—especially those with high housing costs and large numbers of low-income residents—face housing affordability challenges.

Breaking Down the Issue of Unaffordable Rents
SHADAC looked at the percent of cost-burdened rental households in each state in 2017, examining unaffordable rents overall while also analyzing unaffordable rents among rental households with: a Medicaid enrollee, a person of color, a person that has a disability, and an income of less than $25,000. The infographic presented here shows these estimates for the U.S. SHADAC researchers have also created state infographics for the five states with the highest percentages of unaffordable rents among rental households that had a Medicaid enrollee—Florida (65.3%), California (65.1%), New Jersey (64.2%), New York (63.8%), and Nevada (63.5%).

Discussion: How State Medicaid Policy Can Alleviate the Burden of Unaffordable Rents
Since recent attention has been given to the idea of using Medicaid to address housing instability at the state level, the rate of unaffordable rents among rental households with Medicaid enrollees (59.7% nationally) is a particularly salient estimate, indicating that a substantial portion of this population could benefit from such efforts.

Though federal law directly prohibits federal-level matching of state Medicaid spending on housing (excepting nursing home facilities, which are already specified as a Medicaid coverage benefit), states can use Medicaid demonstration waivers and State Plan Amendments to leverage federal dollars for a wide range of housing-related services and activities, including support services for individuals with disabilities, older adults needing long-term services and supports, and individuals experiencing chronic homelessness. Medicaid can also be used to provide services to support individuals’ housing transitions, to help individuals sustain their tenancy, and to develop strategic housing collaboratives. In addition, several states, in an effort to integrate their separate yet related Medicaid and housing programs, have begun to reorganize part or all of their Medicaid delivery systems into accountable care organizations (ACOS) for more ease in using Medicaid dollars for non-medical “flexible services,” which include housing supports.[3]

Visit SHADAC and State Health Compare for More

The infographics presented here are part of SHADAC’s “Measures That Matter” product series. This series highlights measures available from State Health Compare, a web tool that states can use to explore measures related to health and health care within and across states and the nation.

The previous infographics in the series, “Education Matters,” highlighted the role education plays in inequities in health care affordability and access. Learn more about this analysis here.

Learn more about the estimates used in this analysis, as well as other measures related to social determinants of health, at State Health Compare.

This SHADAC contractor report was produced for the Medicaid and CHIP Payment and Access Commission (MACPAC). The purpose of the analysis was to examine Medicaid eligibility, enrollment, and renewal practices in six states in light of the Affordable Care Act goals of making the Medicaid program more efficient; reducing complexity and effort for enrollees and program administrators; and integrating Medicaid with the health insurance exchanges. The report summarizes how MAGI Medicaid populations apply to and are determined eligible for the Medicaid program in the study states, and it describes the study states’ approaches to streamlining enrollment and renewal for these populations, common themes among the states, and the states’ future plans to further streamline enrollment and renewal.

Download a PDF of the report.

Individual Case Study Reports

• Eligibility, Enrollment, and Renewal: Arizona Case Study Findings
• Eligibility, Enrollment, and Renewal: Colorado Case Study Findings
• Eligibility, Enrollment, and Renewal: Florida Case Study Findings
• Eligibility, Enrollment, and Renewal: Idaho Case Study Findings
• Eligibility, Enrollment, and Renewal: New York Case Study Findings
• Eligibility, Enrollment, and Renewal: North Carolina Case Study Findings

About the Study
SHADAC’s study sought to both understand how the selected states—with varied Medicaid policy, program priorities, and ages and capabilities of their eligibility systems—enacted different approaches to streamlining their Medicaid enrollment and renewal processes for individuals whose income eligibility is based on Modified Adjusted Gross Income (MAGI), and to assess the extent to which states were achieving desired goals such as program efficiency and a simplified beneficiary experience.  

SHADAC used a multi-case study methodology and key informant interviews with 48 individuals representing state and local agencies and advocacy organizations to collect data on eligibility, enrollment, and renewal processes and systems for MAGI Medicaid populations. MACPAC was specifically interested in auto-enrollment and auto-renewal practices for MAGI Medicaid, the use of electronic data sources to verify beneficiary information, and the degree to which MAGI Medicaid enrollment and renewal is integrated with enrollment and renewal for non-MAGI Medicaid and other public benefit programs. SHADAC found that some states prioritized real-time, no-touch enrollment and renewal, while others prioritized eligibility worker involvement. All study states, however, focused on the transition to MAGI-based eligibility determinations and the use of electronic data sources to verify beneficiary information called for under the ACA.

Key Themes
Interview responses across the six states revealed several key themes related to Medicaid program and beneficiary experiences:

SHADAC produced this case study for the Medicaid and CHIP Payment and Access Commission (MACPAC) as part of a contract to examine Medicaid eligibility, enrollment, and renewal practices in six states in light of the Affordable Care Act goals of making the Medicaid program more efficient; reducing complexity and effort for enrollees and program administrators; and integrating Medicaid with the health insurance exchanges.

This case study presents findings from telephone interviews with key respondents in North Carolina, conducted in May and June of 2018. The report summarizes how MAGI-Medicaid populations apply to and are determined eligible for the Medicaid program in North Carolina, and describes Northa Carolina’s approach to streamlining enrollment and renewal for these populations, Medicaid program and beneficiary experiences, and the state's future plans to further streamline enrollment and renewal.

Download a PDF of the case study.

Related Content: Synthesis Report

• Assessment and Synthesis of Selected Medicaid Eligibility, Enrollment, and Renewal Processes and Systems in Six States

Related Content: Individual Case Study Reports

• Eligibility, Enrollment, and Renewal: Arizona Case Study Findings
• Eligibility, Enrollment, and Renewal: Colorado Case Study Findings
• Eligibility, Enrollment, and Renewal: Florida Case Study Findings
• Eligibility, Enrollment, and Renewal: Idaho Case Study Findings
• Eligibility, Enrollment, and Renewal: New York Case Study Findings

Related Content: MACPAC Summary Issue Brief

• Eligibility, Enrollment, and Renewal: Case Study Findings