Medicaid Expansion: The Role of State Legislators

THE COMMONWEALTH

FUND

Medicaid Expansion: The Role of State Legislators

Rachel NuzumVice President, Federal and State Health Policy

The Commonwealth Fund

Progressive States NetworkMedicaid Expansion Webinar, April 22, 2013

THE COMMONWEALTH

FUND

Recap: Medicaid Expansion under the ACA

• ACA creates new adult Medicaid eligibility category up to 133% FPL

• Federal government provides 100 percent financing for most states through 2016, phasing down to 90 percent for all states by 2020

• Collapses current eligibility categories into four primary groups: – children, pregnant women, parents, and the new adult group

• Children eligible at higher income categories in Medicaid and CHIP depending on standards in state

• States have option to expand >133% if lower income covered

• Simplifies eligibility determinations by relying on MAGI for children/ non-disabled adults; income disregards replaced with a 5% across the board adjustment effectively raising eligibility to 138% FPL

• Those newly eligible would receive “benchmark” benefit package but must include the law’s essential health benefits package

Source: DHHS Medicaid Program; Eligibility Changes under the Affordable Care Act of 2010, Final Rule, Federal Register, March 23, 2012; T. Jost, Implementing Health Reform: A Final Rule on Medicaid Eligibility, Health Affairs Blog, March 18, 2012.

2

THE COMMONWEALTH

FUND

Impact of Supreme Court Decision on Medicaid Expansion

• Decision permits, but does not require, states to expand their Medicaid programs to cover childless adults with incomes up to 138% of FPL

• An estimated 6 million fewer will be covered by Medicaid given the SC ruling, some of those expected to go into health insurance marketplaces (exchanges)

THE COMMONWEALTH

FUND

Strong Case For State Participation in Expansion• Half of current uninsured nonelderly population under 133% of poverty; half of

32 million newly insured under reform law will be covered by Medicaid• Considerable evidence that Medicaid coverage improves health and financial

security, and reduces mortality• State and local governments (and taxpayers) will benefit from reduction in

uncompensated care: in 2008, state and local governments shouldered $10.6 billion, or nearly 20 percent, of the cost of care for uninsured in hospitals, financed through local revenues

• DSH payments that states can make are reduced by $22 billion over 2014-22• All states are participating in Medicaid with current federal match of 50-74%

and CHIP 65-82%, will be difficult to turn down 100% to 90%– Medicaid launched in Jan. 1966: 26 states in first year, 11 in 1967, 2 in 1968,

3 in 1969, 7 in 1970, 1 in 1972 , AZ in 1982;– CHIP launched in 1997: All 50 states participating by 1999

• About 60% of current Medicaid spending is not federally required: the match has provided sufficient incentive for states to add benefits and beneficiaries beyond what is required

• Seven states (CA, CT, CO, MN, MO, NJ, WA) and DC have already expanded their Medicaid programs to adults with new federal matching (existing rate) for adults available under the law

4

THE COMMONWEALTH

FUND

Status of State Participation in Medicaid Expansion, as of April 2013

Source: Avalere State Reform Insights; Center of Budget and Policy Priorities; Politico.com; Commonwealth Fund analysis

TX

FL

NMGA

AZ

CA

WY

NV

AK

OK

MS

LA

MT

TN

WA

ORID

UTCO

KS

NE

SD

ND

MNWI

MI

IA

MO

AR

IL INOH

KY

WV VA

NC

SC

AL

PA

NY

ME

DCMD

DENJ CT

RIMA

NHVT

HI

Expanding (23 + DC)

Not expanding (13)

Unclear/undecided (9)

Expanding with variation (5)

THE COMMONWEALTH

FUND

Medicaid as a driver of payment and delivery system reform

• CO, MN, VT pioneering innovative models to align incentives, better coordinate care, reduce total costs, and improve outcomes

• Convened Medicaid directors and federal officials from CMCS and CMMI to articulate major state barriers and potential federal actions to better support state efforts

• CMMI awarded $300 million in State Innovation Model grants to support the development of multi-payer payment and delivery system transformation

Cost containment is critical regardless, impacts expansion decision andcurrent program. There is major interest in multi-payer initiatives and ongoing payment and delivery system reforms.

THE COMMONWEALTH

FUND

Increase in Medicaid Enrollment 2022

State Spending Federal Spending Total Spending

-50

-25

0

25

50

Estimated Change in Medicaid Enrollment, Uninsured Adults <133% FPL and Spending Over 2013-2022 as a Result of the Medicaid Expansion*

29.8%

2.9%

26%

16.2%

*Scenario assumes all states expand Medicaid. Compared to no ACA baseline. Projections based on an average take-up rate of 60.5% among newly eligible uninsured and 23.4% among currently eligible but not enrolled individuals. FPL refers to Federal Poverty Level.

Source: J. Holahan, M. Buettgens, C. Carroll, S. Dorn, The Cost and Coverage Implications of the ACA Medicaid Expansion. Kaiser Family Foundation. November 2012.

- 47.6%

Percent

7

Reduction in Uninsured Adults

<133% FPL

0.3%

21%

12.3%

Total change in Medicaid expenditure relative to no ACA baseline

Incremental impact of Medicaid expansion

THE COMMONWEALTH

FUND

Over 15 Million People May be Without Affordable Insurance if States Do Not Expand Medicaid

Vermont

North D

akota

Distric

t of C

olumbia

New H

ampsh

ire

South D

akota

Rhode Isla

nd

Nebras

kaUtah

West V

irginia

Connectic

ut

Kansa

s

Wisconsin

Nevad

a

Colorado

Mississ

ippi

Kentu

cky

Lousiana

Alabam

a

Indiana

Tennes

see

Pennsy

lvania

Michigan

North C

arolin

a

Georg

ia

Florida

Califo

rnia

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Individuals <100% FPL who are uninsured, ages 19-64

Note: FPL refers to Federal Poverty LevelSource: American Health Line http://ahlalerts.com/2012/07/03/medicaid-where-each-state-stands-on-the-medicaid-expansion/ Accessed April 16, 2013. Analysis of March 2011 Current Population Survey by N. Tilipman and B. Sampat of Columbia University for The Commonwealth Fund.

State has indicated will not participate in Medicaid expansionState leaning towards not participating in Medicaid expansionState undecided on participation in Medicaid expansion

THE COMMONWEALTH

FUNDSource: B. D. Sommers, K. Baicker, A.M. Epstein, Mortality and Access to Care among Adults after State Medicaid Expansions, N Engl J Med July 2012. http://www.nejm.org/doi/full/10.1056/NEJMsa1202099

Mortality Rate for Nonelderly Adults Declined in States that Have Expanded Their Medicaid Programs

-5 -4 -3 -2 -1 0 1 2 3 4 50

50

100

150

200

250

300

350

400EXPANSION STATES CONTROL STATES

Years before and after Medicaid expansion

Deat

hs p

er 1

00,0

00 n

onel

derly

adu

ltsBefore Medicaid expansion After Medicaid expansion

-5 -4 -3 -2 -1 0 1 2 3 4 50%

5%

10%

15%EXPANSION STATES CONTROL STATES

Years before and after Medicaid expansion

Perc

ent o

f non

elde

rly a

dults

enr

olle

d in

Med

icai

d

Before Medicaid expansion After Medicaid expansion

Medicaid enrollment Mortality

THE COMMONWEALTH

FUND

Medicaid Expansion: Key Implementation Issues • State participation in Medicaid expansion and implications for:

– Coverage of lower income families– Exchange enrollment, affordability and federal premium tax credits– Providers, especially safety-net– State and local government spending on Medicaid and uninsured

• Federal and state policy options if state participation is delayed– Coverage options for adults under 100% FPL: new legislation– Affordability of subsidized private plans for those between 100-

133%FPL– Penalty for not having coverage would fall on people between the tax-

filing threshold (87% FPL) and 100%FPL in states that do not expand • Other Medicaid implementation issues

– Significant coordination issues between Medicaid and exchanges regarding Medicaid eligibility determination and enrollment

– Preventing gaps in coverage when income and eligibility changes – Ensuring care continuity when eligibility changes: broad access to the

same health plans and/or provider networks through Medicaid, the individual exchanges, small business exchanges

THE COMMONWEALTH

FUND

State Health Policy and Medicaidhttp://www.commonwealthfund.org/Topics/State-Health-Policy-and-Medicaid.aspx

State Innovation Models Initiative: General Informationhttp://innovation.cms.gov/initiatives/state-innovations/

Aligning Incentives in Medicaid: How Colorado, Minnesota, and Vermont Are Reforming Care Delivery and Payment to Improve Health and Lower Costs, The Commonwealth Fund, March 2013. Authors: S. Silow-Carroll, J. Edwards, and D. Rodinhttp://www.commonwealthfund.org/Publications/Case-Studies/2013/Mar/Aligning-Incentives-in-Medicaid.aspx

Medicaid Payment and Delivery Reform in Colorado: ACOs at the Regional Level, The Commonwealth Fund, March 2013.Authors: D. Rodin and S. Silow-Carrollhttp://www.commonwealthfund.org/Publications/Case-Studies/2013/Mar/Colorado-Medicaid-Payment.aspx

Health Care Payment and Delivery Reform in Minnesota Medicaid, The Commonwealth Fund, March 2013.Authors: J. Edwardshttp://www.commonwealthfund.org/Publications/Case-Studies/2013/Mar/Minnesota-Medicaid-Payment.aspx

Medicaid is One of Multiple Payers in Vermont’s Health Care Reforms, The Commonwealth Fund, March 2013.Authors: S. Silow-Carrollhttp://www.commonwealthfund.org/Publications/Case-Studies/2013/Mar/Vermont-Medicaid-Payment.aspx

State Medicaid Programs are Driving Payment and Delivery System Reform, The Commonwealth Fund, September 2012. Authors: K. Nolan and A. Kahnhttp://www.commonwealthfund.org/Blog/2012/Sep/State-Medicaid-Directors-Are-Driving-Payment-and-Delivery-System-Reform.aspx

Medicaid Works: Public Program Continues to Provide Access to Care and Financial Protection for Society’s Most Vulnerable, The Commonwealth Fund, August 2012.Authors: K. Davis and K. Stremikishttp://www.commonwealthfund.org/Blog/2012/Aug/Medicaid-Works.aspx

Advancing Accountable Care Organizations in Medicaid, The Commonwealth Fund, August 2012. Authors: T. McGinnishttp://www.commonwealthfund.org/Blog/2012/Aug/Advancing-Accountable-Care-Organizations-in-Medicaid.aspx

Additional Resources

THE COMMONWEALTH

FUND

Acknowledgements

Tracy Garber, MPHSenior Policy Associate,

Affordable Health Insurance

Sara R. Collins, PhDVice President, Affordable Health Insurance

Jordan KiszlaProgram Assistant,

Federal and State Health Policy