Transcript library.cppp.org

Texas Medicaid and Health Care
Reform
2010 Health Law Conference
Houston, TX - Four Seasons Hotel
April 9, 2010
Bryan Sperry, [email protected]
Children's Hospital Association of Texas (CHAT) – www.childhealthtx.org
Anne Dunkelberg, Associate Director, [email protected]
Center for Public Policy Priorities – www.cppp.org
www.texasvoiceforhealthreform.org
1
Texas Worst Among the States
U.S. average: 15.1%
Massachusetts:
4.1%
Texas:
24.1%
All Ages, 2008
2
Uninsured Texans by Age Group, 2008
65+
57% are
below
200% FPL
~2/3 are
below
200% FPL
0-18
Rate: 20% of 0-18
are uninsured
19-64
Rate: 32% of
19-64 are
Uninsured
Source: U.S. Census
3
Most Uninsured Texans are U.S. Citizens
(6.1 million Uninsured in 2008)
Uninsured by Citizenship Status, 2007-08 Average
Not a U.S.
Citizen 1.6 million (~40%
legal immigrants)
26%
Naturalized
U.S. Citizen
6%
352,000
4.1
million
U.S.-born
citizen
68%
Source: CPS Annual Social & Econ. Supplement
4
www.census.gov/hhes/www/hlthins/hlthins.html
Texas Uninsured by Income Today…
6.1 million uninsured in 2008
>400% FPL
>$88,200
682K
300-400% FPL
$66,200-$88,200
1.611
Million
622K
250-300% FPL
$55,100-$66,200
484K
1.06
Million
751K
200-250% FPL
$44,100-$55,100
<100% FPL
<$22,100/yr for
family of four
898K
150-200% FPL
$33,100-$44,100
Annual income limits given for a family of four, 2009 federal poverty level
100-150% FPL
$22,100-$33,100
5
U.S. Census, CPS
Medicaid Now
Health Insurance
Coverage
Assistance to
Medicare Beneficiaries
Long-Term Care
Assistance
31 million children & 17 million
adults in low-income families;
14 million elderly and persons
with disabilities
8.8 million aged and disabled
— 19% of Medicare
beneficiaries
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
6
Texas Medicaid: Who it Helps Today
Disabled,
359,937
January 2010, HHSC data.
Elderly,
375,375
Poor Parents,
91,838
TANF Parent,
35,158
Maternity,
96,036
Children,
2,131,511
Total enrolled 1/1/2010: 3.2 million
7
Income Caps for Texas Medicaid and CHIP, 2009
250%
200%
150%
$24,264
$33,874/yr $33,874/yr
185%
185% $24,352/yr
$18,310
100%
50%
133%
100%
$36,620
222%
200%
Long
Term
Care
CHIP
$7,884
$2,256
$3,696
12.3% 20.2%
74%
0%
Pregnant Newborns Age 1-5 Age 6-18 TANF Working SSI (aged
Women
parent of Parent of
or
2, no
2
disabled)
income
Mandatory
Optional
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
8
Estimated Medicaid Expenditures in Texas
FY 2010
Total Client Services
$22,844,035,845
Acute Care Services
$16,780,130,911
Medical
$11,742,635,487
Dental
$1,249,992,871
Drugs
$2,365,696,599
Medicare
$1,068,987,775
Long Term Services and Support
$6,063,904,934
9
Source: Health and Human Services Commission, February, 2010.
Medicaid Caseload and Cost Proportions
Texas Medicaid Beneficiaries and Expenditures, Fiscal Year 2009
100%
90%
80%
70%
Non-Disabled
Children
61%
Non-Disabled
Children
30%
Non-Disabled Adults
10%
60%
50%
40%
30%
20%
10%
Non-Disabled Adults
9%
Aged & Disability
Related
60%
Aged & Disability
Related
30%
0%
Caseload
Cost
Source: HHS Financial Services, 2009 Medicaid Expenditures, including Acute Care, Vendor Drug, and Long-Term Care. Costs and caseload for all Medicaid
payments for full beneficiaries and non-full beneficiaries (Women's Health Waiver, Emergency Services for Non-Citizens, Medicare payments) are included.
10
Number and Percent* of Texas Children
Enrolled in Medicaid and CHIP by Age Group
June 2009
= 100,000 Texas Children
Enrolled in Medicaid & CHIP
All Others
Infants and Toddlers
0-1 Years – 800,000 Children
Public Insurance - 400,000 (50%)
Preschool
2-4 Years – 1,200,000 Children
Elementary School 5-11 Years –
2,500,000 Children
Public Insurance - 600,000 (50%)
Public Insurance - 1,100,000 (44%)
Junior High School
12-14 Years – 1,000,000 Children
Public Insurance - 400,000 (40%)
High School 15-18 Years
1,400,000 Children
Public Insurance - 400,000 (29%)
*Numbers rounded to nearest 100,000; percentages based off of rounded number.
Source: Medicaid 8th Month Eligibility File (final eligibility count) & Maximus A010 CHIP Enrollment File; Research Team, Strategic Decision Support; HHSC. 2009 Population Projections by
Age: 2000-2040, Texas State Data Center, Texas Population Estimates & Projections Program; University of Texas at San Antonio, February 2009.
The Individual Mandate
• Requires citizens and legal residents to have coverage,
enforced through tax penalties (effective 2014)
• Penalties begin at $95 in 2014 and increase to $695 by
2016 (or up to 2.5% of income); penalties for children are
half the adult amount
• Penalties are about 1/6 of the cost of insurance
• Does not apply to most Medicaid-Eligible persons, but will
apply in CHIP income range
– Exemptions for all persons w/income below the tax
filing threshold ($9,350 for singles and $18,700 for
couples);
– If premiums > 8% of income;
– Other “financial hardship”, and more.
12
Health Reform Implementation
Timeline: Medicaid Focus
Effective NOW
•MOE requirements
•State OPTION to
expand coverage to
133% FPL at normal
match rate
Takes Effect in 2013
• Increase Primary
care E&M fees to
Medicare levels, 100%
Fed Funded
•State Exchange must
meet readiness test,
or Feds will operate
Implement in 2014
Later Implementation
• Medicaid Eligibility up
to 133 % FPL, with
benchmark benefits,
100% fed funds
• No Medicaid assets
limits (except MEPD)
• Texas CHIP kids
below 133% move to
Medicaid
• Sliding-scale premium
assistance up to 400 %
FPL
• Out-of-Pocket
subsidies (to reduce
out-of-pocket costs)
• Out-of-Pocket caps for
ALL persons with high
medical expenses
• Ban annual benefit
limits in all plans
• Individual Mandate
• Employer
Responsibility
•January 2015: CHIP
fed share increases to
~95% for Texas. CHIP
must be reauthorized
by Congress.
• January 2015: How
is Primary Care rate
increase funded?
•January 2016: first
benefits for
community supports
under CLASS Act
•January 2017: 5%
State share of adult
Medicaid expansion
13
Medicaid Eligibility
Eligibility
Expands coverage to nonelderly persons up to 133% FPL ($29,000 for a family of 4), effective
Expansion
2014. Provides federal funds at 100% in 2014, 2015 and 2016; 95% in 2017; 94% in 2018; 93%
in 2019; and 90% in subsequent years (for the newly eligible). States that previously expanded
eligibility to childless adults receive enhanced funding starting at 50% in 2014, rising to 90% by
2020. Requires states to provide coverage to individuals who have been in foster care at least
6 months up to age 25 (effective 1/1/14).
Income
Requires states to use modified adjusted gross income in determining eligibility and eliminate
Criteria
asset tests (other than for aged and disabled persons) and use a standard 5% adjustment to FPL
In lieu of income disregards, effective 1/1/14.
Maintenance
Requires states to maintain eligibility standards, methodologies and procedures from 1/1/14
of Effort
through 9/30/19 for children and until the exchange is fully operational for adults. Between 1/1/11
and 12/31/13, states with budget deficits may reduce eligibility for nonpregnant, nondisabled,
nonwaiver persons with income exceeding 133% FPL.
14
CHIP
Eligibility
Extends authorization for CHIP through 2015. If federal CHIP allotments are inadequate, states
must assure coverage is available through the exchange. Allows children of state and local public
employees to enroll if the state's premiums and cost-sharing exceed 5% of family income and if
premium contributions have not declined below 1997 levels (adjusted for inflation).
Income
Requires states to use modified adjusted gross income in determining eligibility, effective 1/1/14.
Criteria
Requires states to enroll children into CHIP who are ineligible for Medicaid due to elimination of
income disregards.
Maintenance
Requires states to maintain CHIP eligibility standards, methodologies and procedures from
of Effort
enactment through 9/30/19.
Enhanced
FMAP
Increases each state's federal match rate by 23 percentage points, effective 10/1/13 to 10/1/19.
Benefits
Requires the Secretary to study benefits and cost-sharing protections and certify exchange plans
that are comparable to CHIP by 4/1/15.
15
Current & Future Medicaid/CHIP Eligibility
200%
CHIP
200% FPL
CHIP
200% FPL
CHIP
200% FPL
CHIP
200% FPL
175%
150%
133%
125%
100%
NEW
Medicaid
133% FPL
Current
Medicaid
185% FPL
Current
Medicaid
133% FPL
75%
Current
Medicaid
185% FPL
Current
Medicaid
100% FPL
No
Change
NEW
Medicaid
133% FPL
NEW
Medicaid
133% FPL
Current
Medicaid
74% FPL
50%
25%
14% FPL
0%
Newborns
Children
Age 1-5
Source: Texas Health & Human Services Commission
Children
Age 6-18
Pregnant
Women
SSI, Aged,
Disabled
Parents
Childless
Adults
Who Gains Coverage in Texas
>400% FPL
6.1 million
Uninsured 2008
<100% FPL
682K
1.611
Million
622K
250-300% FPL
484K
751K
200-250% FPL
CBO: 92% of under 65, or 95% of <
65 excluding undocumented covered
in 2019.
•
300-400% FPL
1.6 Million
898K
100-150% FPL
150-200% FPL
Medicaid, based on current Texas uninsured:
• ~1 million uninsured US citizen adults
would qualify for expansion to 133% FPL
(adults)
•~500K already-eligible kids (100-200K more
CHIP)
• Using latest Texas uninsured data,
this would mean the number of
uninsured would be reduced by 4.3 to
4.6 million (from 6.1 million)
•Of course, population AND uninsured
will increase between now and 20142019.
In Exchange
• About 2.5 million 133-400% FPL
qualify for help w/premiums, out-ofpocket (citizens & legal residents)
• Another 680,000 >400% FPL qualify
for full-cost coverage thru Exchange.
•HHSC numbers to date only provide average UNKNOWN: How quickly, what % of
increase over the 2014-2023 period (no neareligible persons enroll. CBO and
term estimates yet)
HHSC assumptions VERY far apart. 17
CBO Projected Shifts in Insurance Coverage of Non-Elderly Populations
Current Law and Final Health Care Reform Bill
Year 2019 (U.S.)
Uninsured
54 million
Nongroup
& Other
19%
Medicaid/
CHIP
35 million
Uninsured
Private
Thru
Exchanges
12%
8%
25 million
30 million
11%
23 million
Employer
9%
162 million
Nongroup & Other
58%
25 million
Medicaid/CHIP
50 million
18%
9%
Employer
Current Law - 2019
157 million
56%
Under Reform - 2019
- The Nongroup & Other category includes Medicare. Bill provisions affect Nongroup coverages, which consists of those that purchase policies outside of group or employer coverage
- Undocumented immigrants and people who are eligible for, but not enrolled in Medicaid are included in the uninsured category.
Source: Congressional Budget Office and the Joint Committee on Taxation
Eligibility and Enrollment Issues
• Improved potential for continuous coverage
• Potential for greater continuity in medical care
BUT
• Capacity of state eligibility system?
–
–
–
–
Must accommodate both expansion & increased participation
Smooth interface with HIE system
HIE may pay state to do income eligibility for subsidies
MUST offer online, in person, telephone and mail application
options.
• Transitions between programs?
– ”No Wrong Door” coordination between Exchange and Medicaid
required, including joint application and enrollment website that
functions for Medicaid, Exchange, and CHIP.
• Take-up rate?
19
Data from Texas Children’s Health Plan indicates
that the longer a child is enrolled, the lower the
medical costs
INPATIENT HOSPITAL CARE - Source: Texas Children’s Health Plan: “CHIP Study June 2000 – June 2004” –
Texas Children’s Health Plan
Total Claims Dollars by Enrollment Month
Per M ember Per M onth
$80
$75
$70
$65
$60
$55
$50
Month Month Month Month Month Month Month Month Month Month Month Month
1
2
3
4
5
6
7
8
9
10
11
12
20
Medicaid Benefits and Rates
Benefits
Provides a one percentage point increase in the FMAP for preventative services and
recommended immunizations (effective 1/1/11).
Requires states to establish benchmark or benchmark equivalent coverage (federal Blue
preferred provider plan, state employee plan, plan of the largest HMO or other Secretary
approved plan) for newly mandated Medicaid adults.
Provider Rates
Requires states to pay at least 100% of Medicare rates in 2013 and 2014 for evaluation
and management services, as well as services related to immunization administration for
vaccines and toxoids, furnished by a physician with primary specialty designation of family
medicine, general internal medicine, or pediatric medicine. Provides 100% federal funds for
the difference in payment above the state’s rate for these services in place on 1/1/09.
Disproportionate
Reduces DSH funding by a total of $18.1 billion: 2014: $500 million; 2015: $600 million;
Share Hospital
2016: $600 million; 2017: $1.8 billion; 2018: $5 billion; 2019: $5.6 billion; 2020: $4 billion.
(DSH) Funding
The largest DSH cuts will be imposed on states with the lowest percentage of uninsured
individuals and states that do not target DSH funds to hospitals with high volumes of
Medicaid inpatients and uncompensated care.
21
Ratio of General Pediatricians Per 100,000
Children 0-18 Years of Age
Selected Years, Texas and U.S., 1996-2008
Ratio per 100,000 children 0-18 years
80
70
59.3
est.
U.S.
60
65.3
53.2
49.3
50
49.5
40
42.8
39.2
30
30.1
TEXAS
20
10
0
1996
2000
2004
2008
- While the Texas general pediatrician to pediatric population
ratio has increased by 65% between 1996 and 2008, it
consistently remains lower than the national average.
Sources: The 2008 ratios are based on the number of ABP-Certified General Pediatrics Diplomates located at:
https://www.abp.org/abpwebsite/stats/wrkfrc/workforce08.pdf . The 2000 ratios were obtained from "Highlights: The Supply of
Pediatricians in Texas - 2006," Center for Health Statistics, Health Professions Resource Center, Statewide Health Coordinating
Council, located at: http://www.dshs.state.tx.us/chs/hprc/pedrep.pdf. The 1996 ratios and the 2004 Texas ratio were obtained
from the Health Professions Resource Center, DSHS. The 2004 U.S. ratio was unavailable and is estimated.
22
Percent of Texas physicians who will
accept all new Medicaid patients
Source: TMA biennial survey
23
Medicaid DSH
• Given Texas’ relatively large share of both uninsured U.S. citizens and
undocumented residents (the latter ineligible for Medicaid, CHIP, or
premium subsidies), Texas is likely continue to have one of the highest
uninsured rates relative to other states.
• Worst case: If cuts are allocated in proportion to a state’s share of the
total federal DSH funding, then Texas’ share would be reduced by $35
million in 2014, $52 million in 2015, $156 million in 2016, $434 million in
2017; $487 million in 2018; and $348 million in 2019.
• Because DSH cuts are targeted to states with the lowest uninsured
rates, Texas should expect smaller cuts than this.
• DSH revenue today is small relative to hospitals’ uncompensated care
burden; substantial gains in coverage should substantially increase
patient revenues for most hospitals.
24
Medicaid System Reforms
Creates a Center for Medicare and Medicaid Innovation by 1/1/11 to pursue payment and
Payment
Reform
delivery reform, while improving quality and efficiency. Creates a new demonstration project to
make bundled payments for episodes of care that include hospitalizations (effective 1/1/12
through 12/31/16).
HospitalAcquired
Conditions
Prohibits Medicaid payment for hospital-acquired conditions, effective 7/1/11.
Offers a state option to provide coordinated care through a health home for individuals with
Medical
Home
chronic conditions. Makes available up to $25 million for state planning grants and provides
Enhanced FMAP (90%) for medical assistance for 2 years, effective 1/1/11.
Accountable
Care
Organizations
Creates a five-year pilot program allowing pediatric providers to share in savings through
Care coordination and quality initiatives (beginning in 2012).
Coordination
& Oversight
New CMS office to coordinate for dual eligibles (2010). Medicaid and CHIP Payment & Access
Commission will add oversight of services for adults.
25
Fiscal Benefit/Cost of
Health Reform to State
•
Feds pay 100% of costs of adult expansion for 3 years: 2014, 2015, 2016. In
2017 the Texas would pay 5%, in 2018 Texas would pay 6%; in 2019 7%, and in
2020 and thereafter, Texas would pay 10%.
• TO ILLUSTRATE, IF covering 1 million adults at an all-funds cost of $3.7
billion:
–
–
–
–
–
•
2014, 2015, 2016: (100%) $3.7 Billion federal, $0 state
2017: feds $3.515 Billion (95%) , state $185 million (5% share)
2018: feds 94% $3.478 Billion; state $222 million (6% share)
2019: feds 93% $3.441 Billon; state $259 million (7% share)
2020 and thereafter: feds 90% $3.33 Billion; state $370 million (10% share)
Feds pay 100% of Medicaid primary care provider rate increase in 2013 and
2014, but not thereafter. Unless Congress changes this, additional costs to state
Medicaid budget– or rates get reduced again.
26
Fiscal Benefit/Cost of Medicaid,
Exchange Coverage to State
•
“Welcome Mat” effect
–
–
–
–
–
•
Based on other states’ experiences, over time more currently-eligible Texas children will enroll
in Medicaid.
(Because Texas has very limited eligibility for adults today, there will be very little welcome mat effect
for adults.)
State will be responsible for standard Medicaid share of just under 40% for welcome mat enrollment by
already-eligible uninsured Texas children, adding another significant cost to the state budget.
To illustrate, covering 400,000 more kids could cost about $1 billion for a year, and the state would pay
$400 million of that.
These costs start affecting budget 2014, though will take time to ramp up.
Economic multiplier of 3.25 per Dr. Ray Perryman, other economists. (↑State
tax revenues + ↓Local taxes avoided) nearly = GR costs
•
Texas economy will also benefit from federal premium assistance and out-ofpocket cost help to families from 133-400% FPL, which will not require any
state budget contribution at all.
27
Fiscal Benefit/Cost of Medicaid,
Exchange Coverage to State
• Admin costs for state of expanded enrollment presumably @ 50%;
financing of Exchange interface costs unclear but may also be 25%
to 50% state
• Some increased costs of doing business passed through in
Medicaid rates.
• Medicaid expansion, while not “free” for Texas, will yield substantial
economic benefits, but require new sources of revenue to fund state
share.
• Even HHSC preliminary cost estimate thru 2023 shows 6:1 ratio of
federal dollars to state costs.
• Medicaid cost share --even if offset 6-to-1 with federal funds--must
be funded in state budget to some degree as soon as 2014, and in
context of a severe structural deficit in our state tax system and
current leadership unfavorable to increasing revenue capacity.
28
HHSC’s Preliminary Model
•
•
•
•
•
The 10-year state General Revenue (GR) cost from 2014 to 2023 is estimated at $27 billion.
The 10-year state GR cost for 2010 to 2019 is estimated at $9.2 billion.
On average (2014-2023), annual Medicaid enrollment will grow by 2,276,000 people 1,709,000 due
to the Medicaid expansion and 567,000 children currently eligible, but not enrolled.
CHIP enrollment over this time period will drop by 149,000 children (237,000 transferred to
Medicaid, offset by 88,000 currently eligible, not enrolled).
Of the $27.0 billion GR,
–
–
–
–
•
•
$13.1 billion is attributable to currently eligible, but not enrolled;
$13.1 billion is due to the Medicaid expansion;
$7.1 billion is for administration (e.g., eligibility determination);
Savings are expected from CHIP ($2.0 billion) and increased drug rebates ($4.3 billion).
The Federal Funds gain is $164.2 billion, or more than 6 times the state dollar (GR) cost.
Costs for replacing federal Disproportionate Share Hospital reductions were not included (as they
had been in the older estimate).
•
HHSC assumed that the primary care physician rate increase would continue beyond two years AT
STATES’ EXPENSE (as a necessary step to address capacity), but did not assume the rates would
be extended to CHIP or that other procedure codes would get a similar increase.
Caveats:
•
Assumes 95% take-up rate
•
Not same period as CBO scores, so don’t compare them (CBO scores run 2010-2019, then 20202029)
•
Assumes favorable FMAPs disappear in 2020
•
Year-by year impact estimates have not been released yet (expected soon)
29
Illustration: How Adult Expansion Could
Change Texas Medicaid Budget
If Covered 1.0 million
new adults; 400K
kids, @ Current costs
and demographics
Baseline = Texas Medicaid Services
Spending, 2008 (Texas HHSC)
Fed Share
2008
$10.8 Billion
State Share
Welcome Mat
Kids: $400
million
Fed Share
Welcome Mat
Kids : $600
million
State Share
Expansion
Adults
$370 million
Likely 2+ years to enroll this many
additional
State Share
2008
$7.0 Billion
Fed Share
Expansion
Adults
$3.33 Billion
Note: this does NOT model increased
admin costs.
30
Medicaid in 2012-2013 TX Budget
•
NO health reform expansion costs, but admin costs at TDI & HHSC
•
Revenue shortfall numbers make it obvious: without more revenue,
there WILL be deep cuts.
•
In 2003, Provider Rates were the largest category of cut. After partial
restorations, the total projected reduction in Medicaid and CHIP rates was
about $599 million.
•
Federal law Medicaid and CHIP maintenance of effort requirements
mean provider rates are the largest program area that states can cut.
Health reform MOEs: no eligibility cuts for Medicaid adults until Exchange
opens in 2014; no cuts for children in Medicaid and CHIP through 2019.
•
“Optional” adult benefits may also be cut
– 2003 Lawmakers rejected certain cuts: cutting off community care and
nursing home care; eliminating Rx coverage for aged, disabled, and
adult clients
– They DID eliminate services of LPCs, SWs, psychologists, LMFTs,
podiatrists, and chiropractors; and adult eyeglasses and hearing aids.
(Restored in 2005)
31
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32