Meetings & Presentations , State Materials | Jan 30, 2020
Considerations for a State Health Insurer Fee Following Repeal of the Federal 9010 Fee
The recent repeal of the federal health insurer fee may create an opportunity for states to secure substantial funding to support health coverage, without increasing costs on consumers or the health care industry.
The government spending bill enacted in December 2019 repealed the annual fee on health insurance providers under section 9010 of the Affordable Care Act (ACA), effective in 2021. The fee, which totaled about $20 billion per year, amounted to an assessment of between two and three percent on prior-year health insurance premiums. A state fee can be designed to pick up this revenue, with little or no year-to-year market impact. Two states – Maryland and Delaware – have passed similar assessments to fund state reinsurance programs. States could also use this revenue stream to fund other affordability measures like the state subsidy program enacted last year in California.
This opportunity is time-limited: a seamless transition generally requires states to enact their own fee before 2021 premiums are set in the middle of 2020. Since the federal fee will be collected for the last time in 2020 based on 2019 premiums, state fees should be first collected in 2021 based on 2020 premiums to ensure continuity. In addition, a state fee may be able to redeploy a one-year “windfall” that issuers would receive due to repeal of the federal fee. That’s because in many cases the federal fee that was to be paid in 2021 (based on 2020 premiums) was “baked in” to 2020 premiums.
Enacting a fee to replace the federal one presents several design questions for states, including what lines of insurance to include, timing, rate, and targeted exemptions. Frequent SHVS partner and ACA tax expert Jason Levitis prepared the slides to help states understand these issues. For states interested in learning more, SHVS is happy to make Jason available to provide technical assistance. In addition, experts at Manatt are available through SHVS to help understand the complex federal rules governing states taxes on Medicaid Managed Care Organizations (MCOs), as well as the related rules under the proposed Medicaid Fiscal Accountability Rule (MFAR). If you have questions or are interested in assistance, contact Heather Howard at heatherh@princeton.edu , or you can contact Jason directly at jason.levitis@gmail.com.
The unwinding of the Medicaid continuous coverage requirement represents the largest nationwide coverage transition since the Affordable Care Act, with significant health equity implications. Given the intense focus on coverage transitions during the unwinding, some states have initiated plans to publish a data dashboard to monitor progress. To date, the District of Columbia and 15 states have published unwinding data in a visual dashboard format (this does not include states with pre-existing enrollment dashboards that don’t specifically identify unwinding cohorts). This expert perspective now includes an interactive map with the links to all the dashboards and states publishing CMS unwinding reports. SHVS will continue to update the EP and map as more states publish their unwinding data.
The unwinding of the Medicaid continuous coverage requirement represents the largest nationwide coverage transition since the Affordable Care Act. This presents State-Based Marketplaces with an opportunity to target outreach efforts to those audiences who have recently lost Medicaid or CHIP to help eligible individuals retain access to affordable healthcare through the Marketplace. This expert perspective focuses on best practices for timing and strategy in consumer outreach to consumers that are no longer eligible for Medicaid to help states develop a consumer “chase campaign.”
