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

Texas Medicaid:
Overview, ACA issues, and Block Grant Proposals
October 19, 2012
TMA Medicaid Congress
Austin, 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
Fast Facts: Texans & Health Insurance, 2011
• 6.1 million uninsured Texans, 23.8% of all ages
– Slight improvement over 2010 (6.2 million, 24.6%)
– Still worst rate in the nation by several percentage points
• Children’s coverage is stable at 1.2 million uninsured under age 19;
16.3% of all kids.
– Texas now NEXT-to-worst uninsured rate for kids, after Nevada.
– More than half of these uninsured children are US citizens or legal
residents who could be enrolled in Medicaid or CHIP, but are not.
• Texans remain less likely to get job-based health coverage than
Americans on average; 50.6% of Texans were insured thru their own
job, or their spouse or parent’s, compared to 55.1% for the US.
Fast Facts 2: Texans & Health Insurance, 2011
• Working–age adults (19-64) in Texas are nearly twice as likely to be
uninsured as children.
– These adults have higher rates of job-based coverage than kids, but do not have
access to free or low-cost public insurance through Medicaid and CHIP.
• Affordable Care Act (ACA) reform impact on the newest numbers:
– Uninsured rate for Texans aged 19-25 dropped 3.4 percentage points, compared to
no improvement for ages 26-64.
– Stability protections for children’s health care in Medicaid and CHIP kept public
coverage of kids stable, but private coverage of Texas children continued to decline.
• Texas experts estimate that even moderate enrollment growth in
private and public health coverage under the ACA in 2014 would cut
Texas’ uninsured number and rate by half. See
cppp.org/research.php?aid=1231
Working-Age Texans Almost Twice as
Likely as Children to be Uninsured
31% uninsured
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4.8 million
Uninsured
10
Medicaid
16% uninsured
1.2 million
Medicare
5
3% uninsured
81,205
Under 19
19 to 64
65 and over
Source: CPPP Analysis of 2012 CPS Annual Social & Economic Supplement
www.census.gov/cps/data/cpstablecreator.html
Job-based
Texas Uninsured by Income 2011…
89% of 6.1 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
1.912 Million
250-300% FPL
$55,875-$67,050
421K
626K
6.1 million includes 1.7
million non-US citizens;
~2/3 of these
(about 1.1 million) likely
undocumented
100-125% FPL
614K$22,350-$27,938
200-250% FPL
$44,700-$55,875
921K
150-200% FPL
$33,525-$44,700
525K
125-150% FPL
$27,938-$33,525
Annual income limits given for a family of four, 2011 federal poverty level
U.S. Census, 2012 CPS 5
Uninsured Texans by Age Group,
2011
81,000
3% of Texas Seniors
uninsured
65+
<2/3 are
below 200%
FPL
63% are below
200% FPL
0-18
1.2 million
Rate: 16.3% of 0-18
are uninsured
6.1 million
uninsured
Texans
19-64
4.8 million
Rate: 30.9% of 19-64
are Uninsured
Source: U.S. Census,
March 2012 CPS
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Most Uninsured Texans are U.S. Citizens
Total: 6.1 million uninsured Texans
in 2011
Non-Citizens: 60.5% uninsured rate;
Approx. 1.1 million undocumented, 570,000
legal immigrants
1.67 m
Immigrants NOT the cause of
Texas’ last-place ranking:
If all non-citizens are removed
from data, Texas is still tied for
worst uninsured rate with CA,
FL, LA and NM– but with all the
immigrants still included in their
rates!
US Citizens:
19.7% uninsured
4.46 m rate
Sources: CPPP Analysis of 2011 and 2012 CPS Annual Social & Econ. Supplement, two-year average for 2010-11,
www.census.gov/cps/data/cpstablecreator.html;Pew Hispanic Center , Feb. 1, 2011 Unauthorized Immigrant Population: National and
State Trends, 2010
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
8
States Have Medicaid Choices & “Floors”
• Texas meets federal minimum Medicaid
standards for kids.
• Texas could cover more parents, seniors, and
disabled adults (under current law).
• States have near-complete control over what
Medicaid pays health care providers (no
federal minimum standards)
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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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10
Special Texas Medicaid Groups
• Maternity: More than half of Texas births (true in all states);
ends 2 months from delivery.
• Breast and Cervical Cancer Treatment: uninsured women
<200% FPL
• Family Planning: women 18-44 <185% FPL. (State $$ only now)
• Medicare Savings Groups: seniors or disabled with incomes
too high for SSI, but below 120% FPL get help from MediCAID
with their MediCARE costs.
• Community Attendant Program: non-medical services to help
seniors or disabled remain at home.
• Medically Needy: In Texas, only for children and pregnant
women, allows for TEMPORARY Medicaid during months when
high medical bills reduce income to Medicaid levels.
11
Who is Left Out of Medicaid Today?
• Medicaid is not available to all poor or low-income Texans:
– Must have limited income and assets in most cases
– Must fit into a covered category (e.g. be pregnant and earning
185% FPL or less)
– VERY FEW working poor adults qualify for Texas Medicaid
• Categories NOT covered:
– Non-disabled, childless adults
• 25 year-old single construction worker cannot get coverage, even if
laid off
– Undocumented immigrants, except in an emergency (and must
otherwise meet all Medicaid requirements)
• E.g., the undocumented 25 year-old single construction worker
construction worker cannot get ER visit covered
– Adult Legal Immigrants, though Texas has option to cover
• Lawful permanent resident of U.S. who entered U.S in 1998 cannot get
coverage, even if severely disabled
12
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
13
Why Very Few Poor Parents Covered in Texas
Medicaid
• Texas Medicaid has VERY limited coverage of parents (<12% of
poverty; > 10 hrs/wk @ min wage disqualifies-- $308 a month for
family of 3).
– Dollar limit set by Texas legislature 1985 and never updated.
• Today, about 226,000 poor Texas parents get Medicaid, though
– there are about 2.6 million children enrolled.
– 60% of adult Texans 18-64 below poverty are uninsured (1.4 million)
• Medicaid Maternity coverage income limit much higher, but coverage
ends 2 months after delivery.
• Medicaid does not cover undocumented at any age.
• LEGAL immigrant adults NOT covered in Texas Medicaid (a state
choice). (This is unlike kids: Legal immigrant kids covered in Texas
Medicaid and CHIP)
Medicaid Benefits
Federal law REQUIRES state to cover certain services for
all ages, including:
•
•
•
•
Inpatient/outpatient hospital
Physician services
Lab and x-ray
EPSDT (here, Texas Health Steps) – all medically necessary care; no
•
•
•
•
•
•
•
•
Ambulance
Home health
Rural Health Clinics/FQHCs
Nursing facilities
Immunizations and comprehensive care for children
Family planning
Nurse Midwife, Nurse Practitioner
Birthing centers, smoking cessation for pregnant women
arbitrary limits
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More on Medicaid Benefits
States can choose to not cover, or to limit these “Optional” services for
recipients 21 and older only:
•
•
•
•
•
•
•
•
•
Rx coverage (all states cover, but limits allowed for adults; TX limits 3 Rx/mo.
except in HMOs)
Institutional care for developmentally disabled
Community care for elders or people with disabilities
Dental care, Eyeglasses, Hearing aids
Private duty nursing
Case management
Podiatry
Chiropractic
Mental health counseling
States must cover all medically necessary services FROM EITHER LIST without
arbitrary limits for children under age 21.
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Big Medicaid Changes Since 1990
• Enrollment growth in last 20 years mostly due to coverage of kids in/near
poverty (federal laws require, but NOT for parents).
• Spending growth last 20 years mostly due to aged and disabled (~60%)
services spending.
– Texas has expanded Medicaid programs for community care for aged and
disabled Texans substantially.
• Federal law changes from 1986-1990:
– Added maternity coverage;
– Required comprehensive benefits for kids; and
– Required coverage of poor and near-poor children (before, only super-poor
kids qualified);
• Texas streamlined enrollment & renewal for kids in 2001 (allow mail-in
application/renewal, and 6 months of coverage).
• Serious problems with eligibility systems kept many Medicaid –qualified
Texans waiting for months from 2006 to 2009. Improved dramatically from
2010-2012.
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The Affordable Care Act and
Texas Medicaid
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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 ($14,856
individual; $30,657 for 4 in 2012).
• 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 from 100% up to 400% of FPL
($92,200 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
FT workers.
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Health Reform
Building Blocks
Medicaid Expansion
• Eligibility up to 133% of the federal poverty
level ($30,657/yr for family of four)
• Adds ≈ 1.1 million TX adults (near term)
• 100% federal funding 2014-2016
• Max state share of 10% starts 2020
2014
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What did the Supreme Court decision
change about the ACA and Medicaid?
 The Court held that states should not have to
risk of all of their existing Medicaid federal
funding if they failed to comply with the
expansion. (The authority to withhold federal dollars from
states that violate Medicaid law has been part of Medicaid
federal law since it was created in 1965, but the US Secretary
of Health and Human Services has never had to impose that
penalty on any state.)
 So, the law still technically still directs all states
to expand Medicaid coverage in 2014, but if a
state chooses not to accept the expansion, they
do not face any penalty.
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What does Texas pay, and what does federal
government pay if we expand Medicaid to
adults under the ACA?
• The federal government will pick up 100 percent of the costs
for the first three years of Texas’ expansion to the adults, 95%
in 2017, 94% in 2018, 93% in 2019, and no less than 90
percent every year after that.
• Texas will also expect to see increased enrollment—known as
the “welcome mat” effect—by already-eligible but currently
uninsured children. So, Texas’ costs for children’s Medicaid
would also be expected to increase, and the state’s share of
that growth would be our “regular” state Medicaid share (just
under 42 cents per dollar in 2012, updated by Congress every year).
24
How many would gain insurance with
Medicaid expansion?
• National experts and Texas HHSC estimate 1.3-1.8 million
uninsured US citizen adults in Texas will be eligible for the
Medicaid option in 2014, and
• HHSC projects just over a million of these would actually
enroll by 2016 (note the important difference between estimates of
potential eligibles versus actual participating enrollees).
• HHSC also estimates that over 400,000 more children—
already eligible today, but unenrolled—will sign up for
Medicaid by 2016 because of heightened public awareness
that will accompany the roll-out of private and public
coverage expansions under the ACA starting January 2014.
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Official HHSC Cost Estimates
• HHSC estimates the state-budget (GR) Medicaid costs to cover these new
adults and welcome mat children would:
– total $3.1 billion GR over five years from 2013-2017, and
– those state funds will draw down $28.6 billion in federal matching funds for
Texas health care providers.
• Of that $3.1 billion total, HHSC estimates for the years from 2013-2017:
– The state’s cost for the adult Medicaid expansion totals $1.3 billion GR,
drawing another $25.3 billion in federal match.
– HHSC estimates another $1.8 billion state GR and $3.3 billion federal match
will result from this “welcome mat effect” new enrollment of currently
eligible children.
– HHSC and national expert models alike assume new “welcome mat”
enrollment in Texas Medicaid by the uninsured children who are currently
eligible but not enrolled may occur to a large degree—and with about the
same state-budget cost—whether or not Texas chooses to expand coverage
to adults.
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More on Medicaid Expansion Costs
• For perspective, Texas hospitals currently spend in excess
of $5 billion in a single year for uncompensated care,
– nearly all of which is supported by local property tax dollars,
– but without the benefit of the 9 to one match Texas would
receive under the ACA’s Medicaid expansion opportunity.
• For the adult expansion and the children’ s Medicaid
coverage growth, that’s $9 federal match for every $1
state contribution. (Compared to current federal match for Texas
Medicaid of $1.45 in fed funds per every $1 GR.)
• The current 1115 Medicaid “Transformation” waiver has a
budget cap (October 2011 to September 2016) of $29
billion–
– @ standard match rate so state share about 40%:
– So, state is struggling to find $12 billion in local matching
dollars , so we can raise about $17 b fed match
27
Expert Opinion on What Court said &
What it means…
• The SC decision did not alter:
– any other aspects of the ACA; or
– The federal Medicaid law in any other respect.
• States that expand must abide by all Medicaid
provisions of the ACA in order to get the enhanced
fed $ for the expansion.
– Federal Medicaid could choose to allow states to phase
in over time, or cover lower income level, but they are
not obligated to.
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2014: ACA Provides Public Support Fitted to Income
Family Income
>$89,400 for a
family of four;
>400% of FPL
 Job-based coverage, or
 Full-cost coverage in the exchange
$67,100-$89,400;
300-400% of FPL
 Job-based coverage, or
 Subsidized exchange coverage: premiums capped
at 9.5% of income
$44,700-$67,100;
200-300% of FPL
 Job-based coverage, or
 Subsidized exchange coverage: premiums capped
at 6.3 – 9.5% of income
$29,700-$44,700;
133-200% of FPL
CHIP
• Job-based coverage, or
• Subsidized exchange coverage:
premiums capped at 3% - 6.3%
of income
<$29,700 for a
family of four;
< 133% FPL
Medicaid
???Medicaid???
Children
Family income based on 2011 federal poverty income levels for a family of four
Adults
(non-disabled adults,
not eligible for Medicare)
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
32
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
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If Texas Opts Out
• ACA makes sliding-scale premium assistance available only to
persons above 100% FPL (exception: legal immigrants excluded
from Medicaid) , so:
– 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.
34
Romney and Ryan Budget
Proposals, Federal Deficit
Reduction and Medicaid
35
Romney Budget basics
• Proposal: Cap total federal spending at 20 percent of gross domestic
product (GDP); boost defense spending to 4 percent of GDP
• To achieve this would require very large cuts in both entitlements and
discretionary programs.
– If ACA repealed (per Romney plan)
– but exempted Social Security from cuts, (per Romney plan), and
– cut Medicare, Medicaid, and all other entitlement and discretionary programs equally
(by the same percentage) to meet Romney’s 20% GDP spending cap and 4% GDP
defense spending target, then
– Would have to cut non-defense programs (other than Social Security) by 22 percent in
2016 and 34 percent in 2022 (see Figure 1).
– Or, if exempted Medicare from cuts for this period, the cuts in other programs would
have to be even more dramatic — 32 percent in 2016 and 53 percent in 2022.
• By 2022, the cuts under Governor Romney’s budget proposals would
shrink nondefense discretionary spending — which, over the past 50
years, has averaged 3.9 percent of GDP and never fallen below 3.2 percent
— to 1.8 percent of GDP if Medicare shares in the cuts, and to 1.3 percent
of GDP if it does not.
36
Romney budget, continued
• Over the coming decade, Romney’s cap would require cuts in programs
other than core defense of $6.1 trillion, compared with $5.0 trillion in cuts
under the House-passed budget plan.
• To the extent that policymakers also spared other programs from these
cuts — for example, veterans’ benefits, military and civilian service
retirement, the FBI, or air traffic control — the cuts in all remaining
programs would have to be still deeper.
• These cuts would be noticeably deeper than those required under the
austere House-passed budget plan authored by Budget Committee
Chairman Paul Ryan (R-WI).
– (Romney’s nondefense cuts are deeper because his proposal increases core defense
spending — the defense budget other than war costs and some relatively small items
such as military family housing — to 4 percent of GDP, while the Ryan budget does not.)
37
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
38
Ryan Proposals, Big Picture
• House Budget Committee Chairman Paul Ryan’s proposal to convert
Medicaid to a block grant, which the House passed Spring 2012 as part of
Chairman Ryan’s overall budget plan, would have cut federal Medicaid
funds to most states by more than 35 percent by 2010 — and to several
of them by more than 50 percent — if it had been in effect starting in
2001.
• Medicaid cost growth largely mirrors health care cost growth systemwide, and slowing Medicaid costs over the long run requires controlling
costs throughout the U.S. health care system.
• The Affordable Care Act takes significant initial steps toward achieving
this goal; and over time, significant further steps will be needed.
• But trying to address Medicaid in isolation from the rest of the health
care system, by converting it to a block grant or imposing a per capita
cap, would sharply shift costs and risks to states, beneficiaries, and
providers.
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Top Concerns: Block Grants, per-capita Cap
• Block grant, PCC would lock Texas into our
historically low Medicaid spending, far below
national average.
• Both result of low provider fees and minimal
coverage of parents.
• Also locks in recent rate cuts, like physician fees
and “Medicare Equalization”
• Does not provide for cost surges due to medical
advances; (recent example, use of anti-retrovirals)
• Does not provide for natural disaster or recession
surges in enrollment
• Rewards states that have not attempted to
economize with a higher cap.
• Texas would either have to spend more state
funds on Medicaid, or significantly shrink our
Medicaid spending on a per-beneficiary basis.
40
Texas Well and Healthy
Texas Coalitions &
Campaigns Working on ACA
Implementation and/or
Medicaid-CHIP Support
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