Economics of the Medicaid Expansion

Economics of the Medicaid Expansion

Robin RudowitzAssociate Director, Kaiser Commission on Medicaid and the Uninsured

Bob Graham Center for Public Service

Gainesville, FloridaApril 9, 2014

Figure 2

Compared to the US, Florida has a higher uninsured rate.

42%

5%14%

17%

2%

20%

Florida

EmployerIndividualMedicaidMedicareOther PublicUninsured

49%

5%

16%

13%

1%16%

United States

NOTES: Data may not total to 100% due to rounding. Medicaid includes the Children’s Health Insurance Program (CHIP) and Other Public includes non-elderly Medicare and military-related insurance. SOURCE: KCMU/Urban Institute analysis of the 2011 and 2012 ASEC Supplement to the CPS.

Figure 3

TX FL LA GA AR OK NC SC US MS WV KY AL TN VA MD DE DC

27%25%

22% 22% 21%20% 20% 19%

18% 18% 17% 17%16% 16% 15% 15%

12%

9%

SOURCE: KCMU/Urban Institute analysis of 2013 and 2012 ASEC Supplements to the CPS.

Florida has the second highest rate of nonelderly uninsured in the South.

Uninsured Rates among Nonelderly Southerners by State, 2011-2012

United States: 18%The South: 21%

Figure 4

SOURCE: KCMU/Urban Institute analysis of 2011 American Community Survey

Florida accounts for 8% of the country’s uninsured at or below 138% FPL.

51%

Total: 25.4 Million

Nonelderly Uninsured ≤138% FPL by Location

FLTXCA GA, IL, NY, NC

Other States

Figure 5

The ACA seeks to increase access to affordable health coverage options, especially for adults.

Medicaid Coverage For Low-Income Individuals

Employer-Sponsored Coverage

Marketplaces With Subsidies For Moderate Income

Individuals

IndividualMandate

Health Insurance Market Reforms

Universal Coverage

Figure 6

The ACA Medicaid expansion fills current gaps in coverage.

*138% FPL = $16,105 for an individual and $27,310 for a family of three in 2014.

Adults

Elderly & Persons with Disabilities

Parents

PregnantWomen

Children

Extends to Adults ≤138% FPL*

Medicaid Eligibility Today Medicaid Eligibility in 2014Limited to Specific Low-Income Groups

Extends to Adults ≤138% FPL*

Figure 7

The ACA modernizes the Medicaid application and enrollment experience in all states.

ACA VisionPAST

Real-time determination

DataHub

$

#

Dear __,You are eligible for…

Apply in person Multiple options to apply

Provide paper documentation

Electronic verification

Wait for eligibility determination

MedicaidCHIP

Marketplace

No Wrong Door to Coverage

Figure 8

2014 2015 2016 2017 2018 2019 2020 and Beyond

100% 100% 100%95% 94% 93% 90%

60% 60% 60% 60% 60% 60% 60%

Federal Share for Newly Eligible Traditional FMAP in FL

The federal government will pay for the vast majority of costs to cover those newly eligible.

Figure 9

The Medicaid expansion has coverage and fiscal implications for states.

Increased State Economic Activity

Increased Provider Revenue

Reduction in the Number of Uninsured

↓ Uncompensated Care Costs↓ State-funded health

programs (e.g. Mental health)

Increased State SavingsFederal + State

Funds

+

↑ Jobs and Revenues

Figure 10

Implementing the ACA Medicaid expansion will bring increased payments to hospitals that could offset reductions in DSH.

MA NY DE IA W

A IL RI CT CA NJ KS OK PA TN MT VA TX IN CO NC SC AL

OH GA ND0.0%

10.0%

20.0%

30.0%

40.0%For FL – 31% Increase

or $33.6 billion

NOTE: AZ is not included because analysis includes only FFS payments (and AZ has no FFS). Includes federal and state spending. Source: Urban Institute estimates prepared for the Kaiser Commission on Medicaid and the Uninsured, October 2012.

Figure 11

NOTES: Data as of March 26, 2014. *AR, IA and MI have approved waivers for Medicaid expansion (MI plans to implement Apr. 2014). IN and PA have pending waivers for alternative Medicaid expansions. WI amended its Medicaid program to cover adults up to 100% FPL, but did not adopt the expansion. NH has passed legislation approving the Medicaid expansion to begin in July 2014.SOURCES: Based on data from CMS here, and KCMU analysis of more recent state legislation, public statements mad by Governors, or issuance of waiver proposal.

Due to the Supreme Court ruling, states effectively have the option to implement the Medicaid expansion.

WY

WI*

WV

WA

VA

VT

UT

TX

TN

SD

SC

RI PA*

OR

OK

OH

ND

NC

NY

NM

NJ

NH*

NV NE

MT

MO

MS

MN

MI*MA

MD

ME

LA

KY KS

IA*

IN* IL

ID

HI

GA

FL

DC

DE

CT

CO CA

AR*AZ

AK

AL

Implementing Expansion in 2014 (27 States including DC)Open Debate (5 States)Not Moving Forward at this Time (19 States)

Figure 12

Nearly 764,000 poor nonelderly uninsured adults in Florida will fall into the ACA coverage gap in 2014.

NOTE: Excludes undocumented immigrants and legal immigrants who have been in the US for <5 years.SOURCE: KFF analysis of March 2012 and 2013 CPS and 2014 Medicaid MAGI eligibility levels.

763,890 UNINSURED ADULTS

35% FPL Parents

($6,836 for a family of 3)

Medicaid Eligibility Limits in Florida

0% FPLChildless Adults

100% FPL($11,490 for an

individual)

400% FPL($45,960 for an

individual)

Figure 13

Other Southern

States33%

Georgia8%

Florida16%

Texas22%

Midwest11%

Northeast6%

West4%

NOTE: Based on state Medicaid expansion decisions as of March 2014. Excludes undocumented immigrants. SOURCE: Kaiser Family Foundation analysis based on 2014 Medicaid eligibility levels and 2012-2013 Current Population Survey.

8 in 10 poor uninsured adults in the coverage gap live in the South with 16% in Florida.

Total: 4.8 Million Adults in the Coverage Gap

South 79%

(3.8 M)

Figure 14

White42%

Black28%

Hispani

c26%

Other4%

Notes: Excludes legal immigrants who have been in the country for five years or less and immigrants who are undocumented. The poverty level for a family of three in 2013 is $19,530. Totals may not sum to 100% due to rounding.Source: Kaiser Family Foundation analysis based on 2014 Medicaid eligibility levels and 2012-2013 Current Population Survey. See technical appendices available at http://www.kff.org/health-reform/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid/ for more detail.

19-24 years24%

25-34

years

24%

35-54 years36%

55-64

years

16%

In Florida, demographic characteristics of adults in the coverage gap largely mirror those of poor uninsured adults.

Total = 763,890 in the Coverage Gap

Distribution By Age:

Distribution By Race/Ethnicity:

Parents23%

Childless Adults77%

Parent Status:

Figure 15

• Gains in access and increased use of health care– More likely to have usual place of care, better perceived access– Increased use of preventive care, physician services, Rx drugs,

hospital admissions– Increased emergency department use

Recent findings from an Oregon study point to benefits of Medicaid coverage.

• Reduced depression, mixed results on physical health – Reduced rates of depression, but no change in blood pressure, cholesterol, or

blood sugar– Self-reported improvements in physical and mental health, overall well-being

• Increased financial security– Near elimination of catastrophic medical spending – Reductions in other measures of financial strain

• Questions– Longer-run impact of improved access and delivery system reforms on

outcomes

Figure 17

Figure 16

• Most states implementing the Medicaid expansion through State Plan Amendment (SPA) using flexibility provided in the law

• Limited number of states are seeking waivers for alternative approaches to implement the ACA

• 1115 Waiver authority is for demonstrations that promote the objectives of the Medicaid program – Authorizes the HHS Secretary to waive certain federal Medicaid requirements and

provide federal matching funds for costs that would not otherwise be matched

– Section 1115 waivers are required to be budget neutral to the federal government

– Waiver approval involves negotiations between a state and HHS

– The ACA requires transparency and meaningful opportunities for public input in the 1115 waiver process

Some states are exploring alternative approaches to implementing the Medicaid expansion.

Figure 17

Premium

AssistancePremiums

Healthy Behavior

Incentives

Benefit Changes

Work Requirements

Arkansas (approved)

x

Iowa (approved) x x x x

Michigan (approved) x x

Pennsylvania (proposed) x x x x x

Key themes have emerged in alternative approaches to the Medicaid expansion.

Key Themes in Recent ACA Expansion Waivers

Figure 18

• Will there be movement in the legislature on the Medicaid expansion in Florida?

• How well will new enrollment systems work and how well will systems be coordinated across health programs?

• What will happen to individuals in the coverage gap if Florida does not implement the expansion?

• What can Florida learn from other states that are moving forward?

– How are alternative models to implement the expansion working?

– What is the effect on state revenues?

– Implications for providers?

– Implications for broader state economy?

What to look for going forward….