Transcript Texas Health Reform and Texas: The View from Fall 2011

Texas Has a Health Care Spending Problem, Not a
Medicaid Problem:
Issues and Prospects in the post-Supreme Court Moment
July 10, 2012
UTMB’s 2012 Health Policy Lunch and Learn Lectures
Galveston, Texas
Anne Dunkelberg, Assoc. Director, [email protected]
Center for Public Policy Priorities
7020 Easy Wind Drive - Austin, Texas 78752
(512) 320-0222 – www.cppp.org
1
Presentation Overview
• Review of ACA key components
– Medicaid top details
– Medicaid interactions with exchanges
• Supreme court Decision overview
–
–
–
–
•
Different Justices, different components
Medicaid decision details
Questions raised and interpretations being circulated
US HHS Agency role
What this means for Texas
–
–
–
–
TX Uninsured and ACA
Census confusion: CPS vs. ACS
Further Confusion: Urban Institute
Without Medicaid expansion, <100 FPL no access to premiums
subsidies in HIX, and even subsidies may be unaffordable for 100-133
• Big Picture: the challenge is health care spending, not Medicaid.
2
Insurance Status in 2010, U.S. and Texas (All
Ages)
0%
U.S.
25%
50%
75%
55.3
TX
49.2
Job-based
Medicaid/CHIP
7
15.9
15.8
Medicare only
7
100%
5
4
Other insurance
16.3
24.6
Uninsured
Source: US Census 3/2011 CPS
3
Medicaid Now (U.S)
Health Insurance
Coverage
31 million children & 17 million
adults in low-income families;
14 million elderly and persons
with disabilities
Assistance to Lowincome Medicare
Beneficiaries
8.8 million aged and disabled
— 19% of Medicare
beneficiaries
Long-Term Care
Assistance
1 million nursing home
residents; 2.8 million
community-based residents
MEDICAID
Support for Health Care
System and Safety-net
Biggest Source of Federal
Funds in State Budgets
$16B in Disproportionate Share Hospital
payments; 40% of community health
center revenues
Federal share ranges 50% to 76%;
43% of all federal funds to states
SOURCE: Kaiser Commission on Medicaid and the Uninsured, 2009
4
Texas Medicaid/CHIP: Who is Helped Today
CHIP,
561,462
January 2012, HHSC data
Disabled,
415,969
25.2 million Texans
7.4 million under 19
Medicaid
Children,
2,523,329
Elderly,
342,177
Poor Parents,
140,295
TANF Parent,
82,964
Maternity
83,453
Total enrolled 1/1/2012: 3.6 million Medicaid; 561,000 CHIP
1 in 7 Texans, but 42% of Texas kids
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5
Income Caps for Texas Medicaid and CHIP, 2012
$25,128
$35,317/yr $35,317/yr
185%
185% $25,390/yr
225% 200%
$19,090
133%
$38,180
100%
$8,376
$2,256
12%
$3,696
19%
75%
Income Limit as Percentage of Federal Poverty Income
Annual Income is for a family of 3,
except Individual Incomes shown for SSI and Long Term Care
6
2014: Health Reform Building Blocks
•
•
Build on current system: Vast majority of Americans still get coverage through their
employer.
Medicaid expansion: US citizens to 133% FPL ($14,404 individual; $29,327 for 4).
•
Reform Private Health Insurance: standard minimum benefits, can’t charge more
based on health status, limits on premium increases as people age, no denial of
coverage, no excluding pre-existing conditions, no annual or lifetime maximums.
•
New Health Insurance Exchanges where private insurers’ options can be compared
and purchased. Open to people without job-based coverage and small employers, and
all members of Congress will get coverage thru exchange.
•
Sliding scale premium assistance in the exchange up to 400% of FPL ($88,200 for
family of 4).
•
Sliding scale deductibles/co-pays and out-of-pocket caps in the exchange to increase
affordability & reduce medical bankruptcy.
•
Individual mandate to have coverage (with major exemptions).
•
Some requirements for employers to contribute if their employees get sliding-scale
help in exchange, with exemption for all employers with 50 or fewer workers.
7
Health Reform
Building Blocks
Medicaid Expansion
• Eligibility up to 133% of the federal poverty
level ($29,700/yr for family of four)
• Adds ≈ 1.4 million TX adults (near term)
– Must further upgrade eligibility system for full
on-line function and interoperability with
Exchange
• 100% federal funding 2014-2016
• Max state share of 10% starts 2020
2014
8
Health Reform
Building Blocks
More Medicaid Provisions
• States can’t reduce kids’ Medicaid-CHIP income
limits before 2019
• Also can’t reduce adult coverage before 2014
(when HIX fully operational)
• Medicaid primary care fees increased to Medicare
levels in 2013 and 214, full federal funding.
• Eligibility rules (except SSI-related aged and
disabled) must change to fed standard based on
US tax income rules (MAGI).
2014
• Ends asset test and F2F interview
9
The SCOTUS Decision
• Unanimous: The fact that Congress chose not to LABEL the
individual mandate’s free-rider penalty as a TAX is sufficient to
exempt from the AIA
• Commerce Clause Rejected as basis for IM: Roberts, Alito,
Kennedy, Scalia, Thomas
• But IM is a Tax, and Congress can Tax: Roberts, Breyer,
Ginsburg, Kagan, Sotomayor
• Medicaid expansion mandate with all Medicaid funds at risk
for states not implementing “unduly coercive”: Roberts, Alito,
Breyer, Kagan, Kennedy, Scalia, Thomas
• BUT rest of ACA is OK, as long as the Medicaid expansion
becomes a state option, and states opting out do not put the
rest of their Medicaid $ at risk: Roberts, Breyer, Ginsburg,
Kagan, Sotomayor
10
What Court said & What it means…
• Roberts: the expansion is a “New Program”; and
states could not have foreseen this “shift in kind, not
merely degree”
• BUT the decision maintains:
– all other aspects of the ACA; and
– The federal Medicaid law in all other respects.
• NO effect on earlier federally-mandated Medicaid
expansions
• Congress can still adopt future publicly-funded
health expansions (under the Spending Clause)
11
Questions, and What Experts are Opining
• No references at all in Roberts’ majority opinion to
changing any other ACA Medicaid provisions.
• HHS/CMS will eventually provide guidance on ALL
these questions
• States that expand must abide by all Medicaid
provisions of the ACA in order to get the enhanced
fed $ for the expansion.
• States NOT expanding are still bound by all
provisions of the fed Medicaid law, and still put their
Medicaid fed funds for their existing programs at risk
for non-compliance (this is same as pre-ACA law)
12
Questions, and What Experts are Opining
The ACA’s other new Medicaid provisions still
are in force for all states, including:
• Increased primary care Medicaid rates 2013-2014
• Phasing down of DSH
• Mandatory coverage of birthing centers, smoking
cessation for pregnant women
• New community services and supports options
• Expansion of Medicaid for youth aging out of foster
care to 26th birthday.
13
Questions, and What Experts are Opining
• Can a state expand to an income <133% FPL?
– NASMD: No: “binary” all as written or nothing option)
– Community Catalyst: No, states must comply with all ACA
terms of the expansion, or risk no 100%/90% match
• Do MOE Stability Protections still apply, and to all states?
– YES, only the HHS Secy’s ability to nuke entire Medicaid $$
altered by Court. All other Medicaid provisions unchanged
by decision (Rosenbaum @ GWU, GU CCF, CC, NASHP)
• Is MAGI conversion required in opt-out states?
• How does “no Wrong Door” work if state opts out?
• Could a State drop expansion in out-years? Will rules
from US HHS address this?
14
More Questions US HHS/CMS will Likely Clarify
– Any due dates for deciding on Medicaid?
– Will the shift of kids in Medicaid and CHIP to
(Medicaid below 133%, CHIP above) still happen if
a state opts out of the expansion?
– Are expansion group Medicaid enrollees entitled
to same legal protections as rest of Medicaid?
– How can/will 1115 waiver authority be used to
allow expanding states to depart from the general
requirements of the ACA (e.g., to cover below
133% FPL)
15
Linking Americans to Coverage (2014)
FPL
Unsubsidized
400%
Exchange
300%
Subsidized
200%
200%
185%
Basic Health
2014
or Exchange
133%
Medicaid Expansion
133%
100%
74%
20%
Children
Pregnant
Women
Parents
Seniors &
People with
Disabilities
 Medicaid and CHIP (Texas 2011 eligibility levels)
■ Uninsured or insured via other coverage source
0%
0%
Adults w/o
Children
Undocumented
Immigrants
16
Americans’ Coverage in 2019:
If nothing changed compared to health reform law
Uninsured
57 million
20%
Nongroup & Other
30 million
11%
Medicaid/CHIP
32 million
11%
Uninsured
26 million
9%
Private
Exchanges
23 million
8%
Medicaid/CHIP
48 million
17%
Nongroup &
Other
27 million
10%
Employer
Employer
161 million
156 million
58%
56%
Without Reform - 2019
Under Reform - 2019
280 Million U.S. Residents Under Age 65
Source: Congressional Budget Office, March 2012 Estimate of the Effects of the Affordable Care Act on Health Insurance Coverage
17
Texas Uninsured by Income 2010…
89% of 6.2 million uninsured have incomes <400% FPL
>400% FPL
>$89,400
300-400% FPL
$67,050-$89,400
<100% FPL
<$22,350/yr for
family of four
656K
501K
250-300% FPL
$55,875-$67,050
1.912 Million
421K
626K
614K
200-250% FPL
$44,700-$55,875
100-125% FPL
$22,350-$27,938
921K
150-200% FPL
$33,525-$44,700
6.2 million includes 1.7
million non-US citizens;
~2/3 of these
(about 1.1 million) likely
undocumented
525K
125-150% FPL
$27,938-$33,525
Annual income limits given for a family of four, 2011 federal poverty level
U.S. Census, 2010 CPS18
Uninsured Texans by Age Group,
2010
101,000
4% of Texas Seniors
uninsured – twice the US
average
65+
<2/3 are
below 200%
FPL
63% are below
200% FPL
0-18
1.24 million
Rate: 16.8% of 0-18
are uninsured
6.2 million
uninsured
Texans
19-64
4.84 million
Rate: 31.8% of 19-64
are Uninsured
Source: U.S. Census,
March 2011 CPS
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19
How Could 2010 Uninsured Texans Gain
Coverage If Reform were Fully Implemented
Today?
Of the 6.2 Million Uninsured Texans in 2010…
≈ 2.6 million (adults and kids) may get help
with coverage in the exchange
≈ 610,000+ would qualify for exchange
coverage at full cost
0
0.5
1
≈ BUT: 1.1 to 1.8 million would remain
uninsured (CBO)
2
2.5
3
2.6M
610K
≈ 1.4 million U.S. citizen adults would newly
qualify for Medicaid
≈ 600,000 kids qualify for Medicaid or CHIP
right now
1.5
1.4M
600K
1.1M
≈ 3 uninsured Texans gain private exchange coverage for each 2 gaining through
Medicaid/CHIP
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20
All Carrot and No Stick?
Or is the carrot too big to refuse?
Confusion factors in Reading the Estimates:
• US Census now has 2 different surveys estimating uninsured:
ask different questions, and get different answers.
• Many estimates of Medicaid expansion are based not on
“raw” Census numbers but on Urban Institute model (that
builds on census), yielding a third set of numbers.
• Range of assumptions about what % of eligible folks actually
enroll (take-up rates) drive HUGE differences in estimates.
21
All Carrot and No Stick?
Or, is the carrot too big to refuse?
• Texas HHSC has projected from 2014-2019 :
– assuming over 90% take-up by newly-eligible adults
– that Texas would have to put up $5.8 billion in new Medicaid state
share, and would draw down $76.3 billion in federal match.
• Urban Institute (for Kaiser, also used by Bloomberg):
– 1.7 million uninsured adults in Texas below 133% FPL who don’t
qualify for Medicaid today, would be left uncovered if Texas does not
expand.
– Models 57% and 75% take-up rates (again 2014-2019)
– @ 50%, 1.8 million enroll; Texas uninsured adults below 133% FPL
drop by 49%; federal govt. pays $52.5 billion (95.3% of costs); state
pays $2.6 billion
– @ 75%, 2.5 million enroll; Texas uninsured adults below 133% FPL
drop by 74%; federal govt. pays $62 billion; state pays $4.5 billion
(5.1% over baseline without expansion).
22
If Texas Opts Out
What we would leave on the table...
• Bloomberg analysis (using the UI model and
historical Medicaid spending by health care sector)
projects that in the first five years (2014-2018), $46
billion would go to Texas health care sectors,
including:
–
–
–
–
$8.6 billion to Medicaid Managed care plans
$4.2 billion to nursing homes
$7.8 billion to hospitals
$4.9 million to home health providers
...Meaning these sectors will lose out on these
amounts in the expansion is not taken in Texas.
23
If Texas Opts Out
• ACA makes sliding-scale premium assistance available only to
persons above 100% FPL (exception: legal immigrants excluded
from Medicaid)
– This means uninsured Texas adults below 100% FPL would have NO
assistance available in 2014.
– UI/KFF estimates 1.75 million uninsured TX adults under 133% FPL, 1.33
of these with incomes below 100% FPL.
– Those from 100-133% FPL would be eligible for premium assistance, but
because the system was designed with assumption that this group would
have Medicaid, some of these near-poor will have difficulty affording the
coverage even with a cap on premiums of 2% of family income.
– Costs of care for uninsured poor Texas adults will continue to be carried
primarily by local property taxpayers, secondarily by other charity care
providers, and without benefit of the 90%+ federal matching dollars.
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25
Total Spending for
Health Care Under
CBO’s ExtendedBaseline Scenario
(Percentage of gross
domestic product,
without significant
changes in policy)
26
WHY IS HEALTH SPENDING IN THE UNITED STATES SO HIGH?
27
Center on Budget and Policy Priorities
Medicare and Medicaid Controlled Costs Better than
Private Insurance Over the Last Decade
Average Annual Growth Rate, 2000-2009
9%
8%
7.2%
7.7%
7%
6%
5%
4.6%
5.1%
4%
3%
2%
1%
0%
Medicaid Per
Beneficiary
Medicare Per
Beneficiary
Private Per Private Employer
Capita,
Insurance
Comparable
cbpp.org
Premiums
6
to Medicare
28
29
Health Reform: The Big Picture
Or, Why ACA is worth Keeping, In Spite of Flaws
• First-ever system for making
comprehensive care available to
all (lawfully present) Americans at
an affordable price.
• Profits in health insurance marketplace will no longer be
based on avoiding risk , leaving Texans uninsured.
• Lays a foundation for controlling health costs and
improving quality of care.
30
Texas Well and Healthy
Texas Coalitions &
Campaigns Working on ACA
Implementation and
Medicaid-CHIP Support
31
•Collaborative campaign of 4 non-profits in TX
•Our goal: educate Texans about health care
options
•Website: www.texaswellandhealthy.org
•Facebook: www.facebook.com/KidsWellTexas
•Twitter: @TxWellHealthy
32
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33
2012 Poverty Guidelines for the 48
Contiguous States and the District of
Columbia
2011 Tax Filing Thresholds
(Below this income,
exempt from penalty)
Persons in
family/household
Poverty guideline
1
$11,170
$9,500
2
15,130
Married Joint filers $19,000
3
19,090
Head of Hshld $12,200
4
23,050
5
27,010
Widow/er & dependent child
$15,300
6
30,970
7
34,930
8
38,890
For families/households with more than 8 persons, add
$3,960 for each additional person.
34
Premium Help: Max % of Family Income for Premiums in
Exchange
Income for a Family of Four
Max % Income for Premiums
From:
To:
$22,000
(100% FPL)
$29,000
(133% FPL)
2.0-3.0%; ($37 to $73/month)
$29,000
$33,000
(150% FPL)
3.0-4.0% (< $110/month)
$33,000
$44,000
(200% FPL)
4.0-6.3% (< $231/month)
$44,000
$55,000
(250% FPL)
6.3-8.1% (< $371/month)
$55,000
$66,000
(300% FPL)
8.1-9.5% (< $522/month)
$66,000
$77,000
(350% FPL)
9.5% (< $610/month)
$77,000
$88,000
(400% FPL)
9.5% (< $695/month)
35
Out-of-Pocket Costs:
Share of Health Costs Covered under
Exchange Plans
Income for a Family of Four
From:
To:
Avg. Share of
Costs Covered
$29,000
$33,000
(150% FPL)
94%
$33,000
$44,000
(200% FPL)
85%
$44,000
$55,000
(250% FPL)
73%
$66,000
(300% FPL)
70%
$77,000
(350% FPL)
70%
$88,000
(400% FPL)
70%
$55,000
$66,000
$77,000
Out of Pocket MAX as %
of income (not incl.
premiums)
$1,983/indiv.
$3,967/family
$2,975/indiv.
$5,950/family
$3,987/indiv.
$7,973/family
36
Examples of Family Costs:
Premiums, Out-of-pocket help, and Out-of-pocket Caps
Family of 4 Income,
with Coverage
through Exchange,
2014 and later
Maximum
Yearly
Premiums
Average %
of health
costs
covered by
plan
(“Actuarial
Value”)
Upper
Cap on
Limit on
Uncovered
TOTAL
spending
Family
(not including
Spending
premiums)
(% of income)
150% FPL: $33,075
$880
94%
$3,967
$4,847
(15%)
250% FPL: $55,125
$4,465
73%
$5,950
$10,415
(19%)
350% FPL: $77,175
$7,332
70%
$7,973
$15,305
(20%)
None
Buyer’s
Choice;
60-90%
$11,900
n/a
450% FPL: $99,225
(No Financial
Assistance)
37
37
State Budget Effects of ACA
Medicaid expansion
2012-2013 Budget
•
No coverage costs
2014-2015 Budget
•
No costs for new adults. Federal government pays 100% cost of new Medicaid
adults from 2014-2016.
•
Welcome Mat Effect: States expect to see increased Medicaid, CHIP enrollment by
uninsured kids who are already eligible today once 2014 expansions begin. State
share: ~ 39 cents on dollar for Medicaid.
2016-2017 Budget
•
First budget with any new adult Medicaid costs: the state starts paying 5% in
•
2017, topping out at 10% share in 2020.
State’s share of CHIP match drops to 5 cents on dollar
38