Fiscal Essentials for Children’s Services Forum What’s at Stake in Washington, D.C. June 11, 2007.

Fiscal Essentials for Fiscal Essentials for Children’s Services Children’s Services

ForumForum

What’s at Stake in What’s at Stake in Washington, D.C.Washington, D.C.

June 11, 2007June 11, 2007

OverviewOverview

TANFChild CareFood StampsMedicaid & SCHIPChild WelfareNational Children’s Policy Forum

TANFTANF

Deficit Reduction Act (DRA) Included new $$ for child care fundingImposes new rigor around work

requirementsInterim Final Rules limit state flexibility Limits vocational education training to 12

months

TANFTANF

State Work Verification Plans States to submit second round of WVP’s to HHS

by June 29th First round of WVP’s resulted in no state plans

being approved by HHS Following round one, HHS released Further Work

Plan Verification Guidance Still operating under Interim Final Rules Final Rules expected late in the year

TANFTANF

Regulations on Work Definitions Excludes “barrier removal” activities Narrows work experience and community service Time limits job search and job readiness to 4

weeks (6 wks in “needy states”) Baccalaureate education no longer counts ABE and ESL only count when included in

employment or vocational education

TANFTANF

Some State Concerns: Final Rules release date won’t give states time to

implement changes resulting in compliance with regulations

Attendance verification and documentation for each hour of participation is extraordinary and creates a paperwork burden

Supervised homework time imposes family stress and increased cost for child care and supervision

TANFTANF

Some State Concerns: Excused absences must be counted in days and not

hours, unlike the real world of work Narrow definitions of job readiness exclude

activities like arranging child care and work transportation – known to be necessary for job success.

Serving individuals with multi-barriers will be difficult due to time limits and narrow interpretation of countable activities

TANFTANF

Current APHSA & NASTA Efforts: Meeting with HHS Department of Data Collection

and Analysis to develop TANF Data Reporting Work Group

Visiting Senate Finance Committee and House Ways and Means staff to inform of state concerns and request state flexibility in Final Rules

Drafting 2nd letter to HHS clarifying state concerns and call for increased flexibility that reflects unique needs states have in administering programs

TANFTANF

Rockefeller Bill Introduced in May – S. 1461 Senator Rockefeller (D-W.Va.) introduced a

TANF penalty relief bill Prohibits HHS from imposing state penalties for:

– Failure to satisfy minimum work participation rates– Failure to comply with work participation verification

procedures Penalty relief is for a 12 month period beginning

on the date of HHS approval of the State’s work verification plan

TANFTANF

Smith Bill Being Introduced This Week or Next: Senator Smith plans to introduce Pathways to

Independence TANF bill Brings TANF in line with ADA obligations Adjusts federal work participation requirements so

that state could get credit when individuals with disabilities participate in work-related activities – Even if activities or the number of hours do not match

current TANF requirements

Child CareChild Care

Child Care Development Fund Reauthorization

Head Start ReauthorizationNotice of Proposed Rulemaking on

Improper Payments in the Child Care Program

Food StampsFood Stamps

Food Stamp Program will be reauthorized in the farm bill – on time (by 9-30-07) as far as we know

Good news: program is doing well and enjoys wide support

Bad news: funding is a serious problem; new Ag spending of $20B (House) and $15B (Senate) is on the table, but uncertain how it will be allocated among Ag programs

New Congress, new Agriculture Committee chairs, new members – challenge AND opportunity for education and reminders


APHSA has again joined with FRAC and ASH – our common agenda: – Expand access – Continue to simplify and streamline the program – Improve adequacy of benefits

Major proposals so far: Administration – Exclude combat pay and certain savings accounts– New name: Food and Nutrition Program– Restrict categorical eligibility; terminate CSFP – New penalty for high negative errors – New reinvestment restrictions– Automated system overissuances: restrictions and penalties


Nutrition community stakeholders support H.R. 2129 and several other bills that have similar benefit increases

House and Senate Ag committees seem focused largely on farm issues so far

HOUSE SUBCOMMITTEE MARKUP EXPECTED WEEK OF JUNE 11

Medicaid & SCHIPMedicaid & SCHIP 10 Things to Know about Medicaid in 200710 Things to Know about Medicaid in 2007

1. As measured by expenditures, Medicaid is America’s largest single health and long-

term care program.– Medicaid accounted for 16.5% of all U.S.

health care spending in 2005. – Total federal Medicaid spending in FY 2005

was $313.1 billion.

2. Medicaid is efficient compared to private health coverage– Between 2000-2004, Medicaid per capita growth in

spending was 6.4% for acute care and 4.2% for long term care.

– For private health insurance the per capita spending growth rate was 9.5% for acute care during this period.

– Medicaid administrative costs are in the range of 4 to 6% while commercial insurers admin costs are often well above 10%.


3. The rate of growth in Medicaid spending has slowed since 2000. – The rate of Medicaid spending increased 7.2

percent in 2005—the fourth consecutive year of decelerating growth.

– Federal Medicaid spending declined in FY 2006 for the first time in history.

– Preliminary data for the first three months of FY 2007 indicate that the leveling off of spending is continuing into FY 2007.


Greater use of home and community based care programs and services

Stronger economy driving enrollment declines Increased fraud and abuse control activities Focus on disease and case management programs

especially for disabled and elderly populations. Dramatic decreases in Medicaid prescription drug

spending, including increased use of generic drug and pharmacy cost and usage controls


4. As measured by enrollment, Medicaid provides health and long-term care coverage for more individuals than any other program—57 million Americans

-27 million children

-14 million low-income uninsured adults

-16.5 million individuals with disabilities and elderly


Medicaid & SCHIPMedicaid & SCHIP Medicaid Spending on Categories of EnrolleesMedicaid Spending on Categories of Enrollees

Note: Expenditure distribution based on spending only on services. Excludes DSH, supplemental provider payments, vaccines for children, and administration. SOURCE: Health Management Associates estimates based on CBO Medicaid Baseline, March 2006.

Enrollees Expenditures

Children 19%

Elderly23%

Blind & Disabled46%

Adults 13%Children

48%

Elderly 9%

Blind & Disabled17%

Adults 26%

2006 U.S. Total = 59.7 million U.S. Total = $299 billion in 2006

5. Medicaid is the single largest source of funding for long-term care in the U.S.– Long-term care services can include nursing

facility care, assisted living, hospice care, and home and community based services such as home health care, case management, personal care, and private duty nursing services.


6. Medicaid fills the gaps in Medicare– 7 million “dual eligibles” -- Low-income

seniors and disabled, who quality for Medicaid in addition to Medicare

– 42% of all Medicaid expenditures are for individuals who are also on Medicare.

– Part D is operating below budget estimates at the same time that state “clawback” payments are increasing


7. Changes in the economy and employer sponsored market are impacting Medicaid– Increases in Medicaid and SCHIP enrollment

since 2001 have helped offset declines in employer-based coverage.

– The downturn in the economy forced some states to implement cost containment measures between 2002 and 2005 that contributed to the deceleration in the rate of spending.


8. Medicaid is a cornerstone of states’ initiatives to expand health care coverage and control costs– Between 2001 and 2005 the number of

uninsured increased from 41 million to nearly 47 million.

– Between 2004 and 2005, the number of uninsured children increased by 1.5 million.

– Since early 2006, 14 states have or plan to pursue health coverage expansions.


Medicaid & SCHIPMedicaid & SCHIP Broad State Coverage Initiatives—including kidsBroad State Coverage Initiatives—including kids

Alaska California Connecticut Illinois Massachusetts Minnesota New York

New Mexico Oregon Pennsylvania Rhode Island Vermont Washington

9. Deficit Reduction Act of 2005 (DRA) provides new opportunities to strengthen Medicaid– Increases transparency in prescription drug pricing – Creates incentives for purchase of long-term care

insurance and eliminates abuse of asset policies– Invests resources to strengthen Medicaid integrity – Grants new state flexibility to develop more appropriate

cost sharing rules and benefit packages– Imposes new limits on state financing, including on

MCO provider taxes and targeted case management


The President’s budget includes significant cost savings proposals: – $13 billion in legislative proposals over 5 years– $12.7 billion in regulatory proposals over 5 years

The Administration’s FY 2008 proposed regulatory proposals include: – Prohibit Medicaid reimbursement for school-based

administration and transportation expenses – Prohibit Medicaid reimbursement for graduate medical

education (GME) for providers – Clarify reimbursement policies for rehabilitation

services– Reform payment to government providers


10. Medicaid serves as the foundation upon which states design and implement their SCHIP programs.– States design their SCHIP programs to provide

coverage to low-income individuals at the point where state Medicaid eligibility rules end.


1. The State Children's Health Insurance Program (SCHIP) is jointly financed by the federal and state governments and is administered by the states. – Within broad federal guidelines, each state

determines the design of its program, eligibility groups, benefit packages, payment levels for coverage, and administrative and operating procedures.

Medicaid & SCHIPMedicaid & SCHIP Quick Facts about SCHIPQuick Facts about SCHIP

2. States can design their SCHIP program in three ways.

Stand-Alone ProgramMedicaid Expansion ProgramCombination Program


3. States must consider a range of factors when choosing their program type– State budget constraints– Insurance market– Health care provider system– Appropriate agency to administer– Eligibility criteria that meets the needs of the state and

its demographics



Medicaid SSI Recipients Children under age 6 and

pregnant women whose family income is ≤ 133% FPL

Children under age 19 and born after 9/30/83 in families with incomes ≤ FPL

Infants born to Medicaid-eligible women

Recipients of adoption assistance and foster care

Certain people with Medicare Others

SCHIP Targeted towards uninsured low-

income children Limited to children under 19,

unless state has a waiver Generally targeted to children

from families earning up to 200% FPL, unless state has a waiver

Applicants must be uninsured at the time of application, not eligible for Medicaid or state employee coverage through a parent, and must not be a resident of a state institution

5. SCHIP and Medicaid covered 5. SCHIP and Medicaid covered populations are somewhat different.populations are somewhat different.


Medicaid Mandatory services

must be offered by all states

Under DRA may offer new benefit flexibility

SCHIP Medicaid expansion

services provided under SCHIP mirror Medicaid services

Stand alone: 3 coverage options

6. The benefits for Medicaid and SCHIP 6. The benefits for Medicaid and SCHIP differ.differ.


Medicaid Federal match rates

range from 50-76 percent

SCHIP Programs receive an

enhanced match rate ranging from 65-85 percent

7. There are different match rates for 7. There are different match rates for Medicaid and SCHIP.Medicaid and SCHIP.


Medicaid No cap on

administrative expenditures

SCHIP 10 percent limit on

certain expenditures related to administration, outreach, and other child health assistance and initiatives

8. There are different rules for 8. There are different rules for administrative expenditures in administrative expenditures in Medicaid and SCHIP.Medicaid and SCHIP.


Medicaid Allows for qualifying

dependents of state employees to be eligible for and receive Medicaid coverage

SCHIP Statute explicitly

excludes dependents of state employees from enrolling in the SCHIP program, regardless of their income eligibility

9. Public employees are treated 9. Public employees are treated differently in Medicaid and SCHIP.differently in Medicaid and SCHIP.


SCHIP spending was initially low, but now a growing number of states are experiencing shortfalls in funding for their program. – “Redistribution” of funds has helped to alleviate

shortfalls, but the pool of available funds continues to shrink as programs mature.

– 14 states are expected to face shortfalls in FY 2007.


Annual Funding UncertaintyNew Proposed Rules Transitional Medical AssistanceCoverage of Targeted PopulationsFund RedistributionSupport of Employer Sponsored Insurance

Medicaid & SCHIPMedicaid & SCHIP Federal Regulatory IssuesFederal Regulatory Issues

PERM Capping payments to government providers DSH payments Targeted Case Management Provider Taxes Citizenship documentation Rehabilitation Option GME

Medicaid & SCHIPMedicaid & SCHIP Congressional ActionsCongressional Actions

SCHIP shortfallSCHIP reauthorizationPart D sharing of informationMedicare Part D data sharingHealth care expansionElectronic health records/HITDSH redistribution legislation

Child WelfareChild Welfare

109th Congress – 2nd Session

Adam Walsh

Act

JUL 2006

Deficit Reduction

Act

FEB 2006

Child & Family Svcs

Imp Act

SEPT 2006

Tax Relief & Health Care Act

DEC 2006

Safe & Timely Interstate

Placement Act


LEGISLATION INTRODUCED IN THE 110th Congress:

Foster Children Self-Support Act (HR 1104)

Kinship Caregiver Support Act (S 661)Keeping Families Together Act (HR

687/S382)


Regulations in Proposed Rule Stage– AFCARS: new data reporting on children in foster

care, subsidized adoption and subsidized guardianship arrangements; penalty requirements

NPRM expected in December 2007

– Privatizing Functions: Addresses states’ ability to delegate some decision making authority to private agencies performing admin functions and the availability of foster care training funds

NPRM expected in December 2007


Regulations in Proposed Rule Stage– Rehabilitation Option: amends the definition to

exclude services furnished by other non-Medicaid services from federal, state or local programs including foster care, child welfare, and juvenile justice

NPRM expected in the summer

– Chafee National Youth in Transition Database: requires states to collect data on youth receiving IL services and outcomes of youth who have aged out of foster care

Final action expected in March 2008


Upcoming Congressional Action McKinney-Vento Reauthorization

– Recommendations by advocates: Include all children and youth in out of home care for eligibility for

the full range of education protections, rights and supports Clarify who can make education decisions for children and youth in

out of home care For children and youth in the custody of the child welfare agency in

out of home care, notice of school of origin decisions, appeals, and transportation that are provided to the decision-maker, should additionally be given to the child welfare agency and the court of jurisdiction

Increase funding levels to $210M

Child Welfare: Joint Financing Child Welfare: Joint Financing RecommendationsRecommendations

NATIONALCHILD ABUSE

COALITION

Partners:

Child Welfare: Joint Financing Child Welfare: Joint Financing RecommendationsRecommendations

1. Guarantee services, supports and safe homes for every child who is at-risk of being or has been abused or neglected by strengthening the federal-state child welfare partnership by amending the federal Title IV-E statute to do the following without converting any of Title IV-E to a block grant

2. Promote program effectiveness

3. Enhance accountability

National Children’s National Children’s Policy ForumPolicy Forum

Purpose: designed to address the informational needs of key decision-makers and provide a safe harbor for open and frank conversations

Advisory Committee: representatives of the policy staff from key Congressional committees, U.S. Department of Health and Human Services, select Congressional support agencies, NGA, NCSL and key child welfare leaders

Site Visits for Congressional Staff

CONTACT INFORMATIONCONTACT INFORMATION

TANF:TANF:Linda Lawson, Senior Policy Associate – Linda Lawson, Senior Policy Associate – [email protected]@aphsa.orgFood Stamps:Food Stamps:Larry Goolsby, Senior Policy Associate – Larry Goolsby, Senior Policy Associate – [email protected]@aphsa.orgChild Care:Child Care:Rachel Demma, Policy Associate – Rachel Demma, Policy Associate – [email protected]@aphsa.orgMedicaid:Medicaid:Martha Roherty, Director, NASMD – Martha Roherty, Director, NASMD – [email protected]@aphsa.orgAndrea Maresca, Senior Health Policy Associate, Andrea Maresca, Senior Health Policy Associate, NASMD – NASMD – [email protected]@aphsa.orgChild Welfare:Child Welfare:Sonali Patel, Senior Policy Associate & Director of Sonali Patel, Senior Policy Associate & Director of the National Children’s Policy Forum – the National Children’s Policy Forum – [email protected]@aphsa.org

APHSA: (202) 682-0100APHSA: (202) 682-0100

Fiscal Essentials for Children’s Services Forum What’s at Stake in Washington, D.C. June 11, 2007.

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