Dive Brief:
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CMS announced $8.6 million in State Flexibility Grants to 30 states and the District of Columbia to help them stabilize the Affordable Care Act exchanges and individual insurance markets.
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The funding is part of the ACA's $250 million State Rate Review Grants. The $8.6 million was unspent rate review grant funding from previous years.
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CMS has additional leftover money for states that it said will be used "to support the establishment of innovative measures to improve their markets."
Dive Insight:
It's somewhat ironic that the agency is seeking to prop up ACA markets, given the Trump administration's prior explicit desire to dismantle and weaken the law. After repeated Republican efforts to repeal it entirely, the agency is, at least for the time being, attempting to steady the markets.
CMS Administrator Seema Verma said in a statement the money will continue the agency's "ongoing efforts to give states the tools and flexibility" needed to stabilize the ACA markets.
"We recognize that states are in the best position to assess the needs of their consumers and develop innovative measures to ensure access to affordable health coverage. These grants make yet another down payment on our work to enhance states' ability to stabilize and improve their respective health insurance markets," Verma said.
States will use the funding to "support market reforms and consumer protections," according to CMS.
Those efforts include economic analyses and scans of the health insurance market to expand affordable health insurance options and to create policies, procedures and claims-related data to improve mental health and substance use disorder treatment services. Five of the states will use the money directly to help fight opioid addiction.
All of the states that requested funds received money. They have until August 2020 to spend the funds.
Of course, $86.6 million spread over dozens of states means that the money won't have a major impact on the exchanges. All of the states received slightly less than $300,000 in grants.
Nevertheless, CMS said states know best how to use these funds. Payers will celebrate this additional funding, but they've already seen a more stable market this year.
Insurance companies increased premiums by double digits for 2018 and some large payers left the exchanges. Payers look at the market more positively for 2019 even without the individual mandate penalty. Many payers are proposing single-digit premium increases for next year and some like Centene are expanding their footprint.
It's not all positive though. Kaiser Family Foundation recently reported that members who don't get government subsidies are leaving the exchanges. That is expected to continue next year.
A recent report by the Center on Health Insurance Reforms at Georgetown University's Health Policy Institute featured a statement from insurance brokers and agents, predicting that people will leave the exchanges for other health plan options, such as short-term plans, association health plans and healthcare sharing ministries. This migration will result in a sicker risk pool in the exchanges, which will mean higher premiums for those who don't get subsidies in the coming years.