Transcript Slide 1

Medicaid Expansion:
What’s at Stake for
Texas
Presented by:
Names here
Date
The Medicaid Expansion Option
 Part of the Patient Protection and Affordable
Care Act; increase Medicaid eligibility to 133%
of the federal poverty level ($31,720 for a family
of four)
 U.S. Supreme Court ruled federal government
cannot require states to increase Medicaid
eligibility
 Medicaid expansion is optional for states
 26 states (including DC) moving forward with
Medicaid expansion in 2014
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Texas’ Response to Expansion Option
NO
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Debate on Expansion in 2013 Legislature
 Gov. Perry: Medicaid is a “broken” and “financially
unsustainable” system
 Rep. John Zerwas (R-Fulshear) proposed a “Texas
solution” to Medicaid expansion by using federal funds
to expand private market coverage
 Leach amendment, added to Senate Bill 7 by Rep. Jeff
Leach (R-Plano) blocked Texas from expanding
Medicaid without approval from Texas legislature
 Numerous other bills filed to require the state to expand
Medicaid but none received a committee hearing
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Uninsured in Texas
 6.2 million uninsured, according to U.S.
Census Bureau
 Highest rate of uninsured in the nation
 In many Texas counties, 1 in 3 residents are
uninsured.
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Impact of PPACA on Uninsured
 Of the 6.2 million uninsured:
– 28% (1,736,000) are eligible for tax subsidies to
purchase private coverage through the federally
facilitated marketplace
– 14% (868,000) are eligible for Medicaid under
current eligibility rules
– 20% (1,240,000) ineligible for any coverage due
to immigration status
– 21% (1,302,000) have access to ESI or
unsubsidized marketplace coverage
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If Texas Took the Medicaid Option…
 17% of the uninsured (1,054,000 Texans)
would have Medicaid coverage
 In the absence of Medicaid expansion,
1,054,000 Texans will remain uninsured
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Paying for Expanded Coverage
 PPACA’s coverage provisions paid for with
$500 billion in cuts to hospitals, home health
providers, nursing homes and Medicare
Advantage plans over 10 years.
 $18.6 billion: Texas’ hospitals share of these
cuts.
 These cuts take place in all states – even
those not expanding Medicaid
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Fed. Gov’t Pays for Larger Share of the Cost
of Services for Expansion Population
 Federal government pays 100% of the costs
of Medicaid services for the expansion
population from 2012-2015
 State share: 0% for 3 years
 Federal government’s share gradually
decreases to 90% in 2023
 State share: 10% beginning in 2023
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Texas’ Choice: Cost to Texas Taxpayers
 Beginning Jan. 2014, state loses nearly $300
million in federal funds per month
 For the 2015-15 biennium, we lose $7.7
billion
 By 2022, this increases to $9.2 billion in
foregone federal revenue
 More than any other state
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Texas’ Choice: Cost to Businesses
 $266-$399 million in annual federal tax
penalties
 Employers >50 employees assessed a per
employee penalty of $3,000 if employees rely
on tax subsidies to purchase insurance
coverage but not if they qualify for expanded
Medicaid coverage.
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Texas’ Choice: Cost to Privately Insured
 In the absence of Medicaid expansion, cost
shifting to private sector will remain
 Premium costs for private insurance average
$1,800 higher because of uncompensated
care for the uninsured
 Premiums for private coverage available
through the marketplace estimated to be 9.3
percent higher due to inaction on Medicaid
expansion
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Texas’ Choice: Cost to Hospitals
 More than 1 million low-income, uninsured
residents will continue to seek care in
hospital ERs, clinics
 At the same time, Medicare and Medicaid
revenue is being cut
 Hospitals asked to provide same level of care
with fewer resources
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Hospital Funding Cuts: Medicare DSH
 Medicare Disproportionate Share Hospital
cuts: for FY 2014 alone are between $16
million and $19 million
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Hospital Funding Cuts: Sequestration
 Across-the-board 2 percent reduction in
Medicare payments extended through 2023
 $2.5 billion over 10 years
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Hospital Funding Cuts: Medicaid
 Federal cuts to Medicaid Disproportionate
Share Hospital program extended for an
additional year through 2023
 FFY 2016: Texas hospitals will face reduction
of $1.2 billion
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Hospital Funding Cuts: SGR Fix
 Temporary SGR or “doc fix” averts deep cuts
to Medicare physician reimbursement
 But at a cost to hospitals
 Lower payments for long-term care hospitals
that serve patients with clinically complex
conditions
 Extension of Medicare sequester
 Hospital funding being looked at as a “pay
for” for a permanent SGR fix
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The Bottom Line
 Without Medicaid expansion, more than one
million uninsured Texans will continue to rely on
hospitals for range of services from primary care
to critical care
 Hospitals’ uncompensated care burden of $5.5
billion annually unlikely to be reduced
significantly
 Negative impacts of inaction on Medicaid
coverage compounded by ongoing
Medicare/Medicaid federal funding cuts
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THA – Who We Are
 The Texas Hospital Association is a nonprofit trade
association representing Texas hospitals and health
systems. In addition to providing a unified voice for
health care, THA serves its 500+ members with timely
information, data analysis, education on essential
operational requirements, networking and leadership
opportunities.
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THA – What We Do
 Since its founding in 1930, THA has grown and evolved
with the hospital industry itself. Today, THA is the leading
advocacy organization for Texas hospitals. The
Association’s dedicated, professional staff is committed
to helping hospitals navigate the complex, everchanging legislative and regulatory environment, while
working toward common solutions for better health care
policy at the state and federal levels.
 THA also serves as a resource for the State of Texas in
the areas of disaster planning and response, data
services and regulatory development.
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THA’s Family of Companies
 The THA Family of Companies provides a full range of
services for hospitals and health systems:
– HealthShare markets products and services offered through THA-endorsed
vendors. HealthShare also manages and markets voluntary insurance programs,
THA’s PDS program and the THA Retirement Plan.
– Texas Hospital Insurance Exchange, managed by the Texas Hospital Insurance
NetworK, a wholly owned subsidiary of THA , provides dependable, competitively
priced liability insurance and workers’ compensation coverage designed
specifically for the Texas health care market.
– Texas Healthcare Trustees is affiliated with THA and provides an education,
advocacy and leadership role for the governing board members of Texas health
care organizations.
– Texas Center for Quality & Patient Safety is an initiative of THA and the Texas
Hospital Association Foundation focused on improving the quality of care at the
bedside, and reducing costs, through evidence-based practices.
– HOSPAC, composed of THA’s state and federal political action committees, is the
voice for more than 355,000 health care professionals working in Texas hospitals.
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Serving Texas Hospitals/Health Systems
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