AHCCCS Update 30 Years of Medicaid Innovation Reaching across - - PowerPoint PPT Presentation

“Reaching across Arizona to provide comprehensive quality health care for those in need”

AHCCCS Update

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

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AHCCCS Today

 Largest Insurer in State  $9.0 billion Program and growing  Covers over 50% of all births  Covers two-thirds of nursing facility days  Historically provided broader coverage then

most States – childless adults – parents

 Program based on Competition and Choice

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

 Since 2007 Medicaid costs

have grown by 35%

 Includes $2.5 billion in total

fund cuts

 At full implementation the

• Prop. 204 expansion’s

unfunded costs are $256.0 million

AHCCCS Growth of GF

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30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

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100% Federal Poverty Level (2013)

$27,570 $15,510 $19,530 $11,490 $31,590 $23,550

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000

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30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

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AHCCCS Population as of July 1, 2012

1985 – 2012

144,450 456,385 508,917 318,383 1,047,982

200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000

. 30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need” 0% 50% 100% 150% 200%

Infants (0-1) Children (1-5) Children (6-19) Pregnant WomenParents Aged, Blind and Disabled Childless Adults* Exchange Subsidies Full Expansion Healthcare Reform Mandatory Prop 204 Expanded Coverage State Expanded Coverage (Non- Prop 204) *Currently frozen

~ ~ ~ ~ ~ ~

Medicaid and ACA Populations

67% 67% 67% 67% 67% 67% 85%

100 % 100 %

Medicare 400%

100-133% FPL Estimated 57,000 to enroll Percentage of costs paid by federal government

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30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

AHCCCS Coverage History



Mid 1990s – Governor Symington proposed eligibility increase to 100% - leverage state only spending



1996 Initiative approved by voters after lack of support by legislature



2000 Initiative passed by voters after state unable to implement 1996 initiative



2001 – coverage up to 100% implemented



2010 – ACA passes with coverage up to 133%



2011 – State imposes freeze – insufficient resources



2012 – US Supreme Court ruling on ACA

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30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

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Childless Adult Population

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

AHCCCS Coverage



In her State of the State Governor Brewer called for the legislature to restore Proposition 204 coverage and provide coverage up to 133%



This would provide coverage for about 300,000 statewide



Proposal would provide about $1.7 billion in federal funds to support healthcare in AZ



Circuit Breaker – proposal includes requirement that if federal funding decrease below 80% for childless adults coverage terminates



Funding Source – Executive proposal includes hospital assessment to cover state costs associated with Prop 204 – Replace City of Phoenix assessment

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30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

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Childless Adult Expenditure Data

Diagnosis Members Cost Injuries/Trauma 65,095 $163 m Heart - circulatory 53,087 $147 m Digestive system disease 52,921 $112 m Cancer 18,766 $76 m Diabetes and kidney disease 28,981 $49 m Respiratory Disease 73,047 $85 m

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

Impact of Prop 204 Coverage Elimination

Based on FFY 2011 Spend (3 months of freeze) - $1.7 B



Hospitals $720 million – 38 Non Maricopa/Pima Hospitals - $160 m



Physicians/Clinicians - $283 million - $50 m greater AZ



Behavioral Health - $125 million - $27 m greater AZ



Emergency and Non-Emergency Transportation - $80 m



Radiology and Lab - $72 m Waiver Authority Expiring 1-1-14



Hospital Uncompensated Care Funding – I.H.S Funding



Authority to cover Childless Adults

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

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“Reaching across Arizona to provide comprehensive quality health care for those in need”

Relatively Minor Tweak to Populations Already Covered by Arizona Voters

• 200,000

400,000 600,000 800,000 1,000,000 1,200,000 1,400,000

If Arizona does not expand, it may have to eliminate coverage for remaining 50,000 Childless Adults on 1/1/14 Difference- 57,000 People Prop 204 Population Full Expansion to 133%

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

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“Reaching across Arizona to provide comprehensive quality health care for those in need”

Expanding will Maintain Arizona’s Economic Competitiveness



Almost all of Arizona’s neighboring states are expanding



Not expanding will expose Arizona to uncompensated care costs that will impact the cost and quality of care



This cost will hurt Arizona in economic competition with other states



Taxes from non-expanding states will fund Medicaid growth in expanding states creating a wealth shift

Expanding Expanding Expanding Expanding Undecided

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30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

Medicaid Expansion Funding Impacts

FY 2014 FY 2015 FY 2016 State Match Increase $27 million $154 million $105 million Provider Assessment ($82 million) ($256 million) ($224 million) Increase in Existing Premium Tax ($7 million) ($34 million) ($36 million) Net Impact on GF ($62 million) ($136 million) ($155 million) Federal Match $337 million $1.556 billion $1.712 billion

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30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

Impact to Arizonans



14 County Sheriffs sent a letter on Feb 11th – “Deputies in the field are also seeing the impacts of the untreated mental health conditions among those who no longer qualify for AHCCCS/Medicaid. Formerly stable people with mild to moderate mental health disorders are taxing the resources of deputies, often unnecessarily…“Making AHCCCS/Medicaid services more accessible to more Arizonans who are struggling economically will benefit the communities as a whole, as well as public safety in general. Thus we support your proposal…”



Working Childless Adult age 55 – “I was born and raised in Arizona, lived here all my 55 years. I have worked and raised a family. I have come down with Hep C and if I don’t get treatment I will die. I can’t work full time any longer because of my illness. I can’t afford treatment. I guess I don’t have a choice but to die thanks to this state I have called home all my life. Still working part time paying into the system, just waiting to die.

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

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“Reaching across Arizona to provide comprehensive quality health care for those in need”

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AHCCCS Prop 204 Restoration and Medicaid Coverage



Honor the will of the Voters – twice have approved coverage for low income Arizonans – up to 100%



Keeps Arizona Economically competitive – Arizona families and businesses have to support uncompensated care – states that expand Medicaid have competitive advantage



Protect rural, safety net and healthcare infrastructure - AHCCCS is an integrated system and the impact of a continued freeze will be dramatic on the delivery system all Arizonans enjoy



AHCCCS part of sustainability solution – Healthcare financing is a national policy dilemma that requires a federal solution – AHCCCS is nationally recognized system and similar efficiency levels should be achieved elsewhere



Achieve healthier Arizona – New England Journal of Medicine found AHCCCS expansion saved lives and coverage also supports lower costs of care for patients

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

AHCCCS is part of the Solution



Conservative managed care principles based on competition and choice



“Gold Standard” for managed care



Error rates well below national average



Quality performance measures above national averages



#1 ranking nationally for Medicaid Developmentally Disabled program – United Cerebral Palsy 2012 Report



High member satisfaction – less than 3% switch plans



Strong Competition to participate in the program



One of the highest rates of community placement nationally for those at risk of institutionalization



National leader in Integrated delivery system for Dual eligible



Very strong provider participation rates

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

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“Reaching across Arizona to provide comprehensive quality health care for those in need”

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Health Care Reform

 PPACA expanded Medicaid to 133% of the federal poverty

limit on January 1, 2014.

 Nationally Medicaid is estimated to grow by 16 million

lives

 Create Health Exchange  provide tax credit subsidy for individuals from 100% to

400%

 Nationally Exchanges are expected to cover 24 million lives

by 2019

 State needs to determine who will operate Exchange  Made a number of commercial insurance reforms –

Guaranteed Issue and Community rating

 Established Individual Mandate

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

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Exchange Timeframes

 September 2012: Essential Benefits decision –

State Employee package

 December 2012: Governor deferred to Federal

Exchange – 25 states in this model

 July 2013: Systems Readiness Testing  October 2013: Exchange enrollment begins  January 2014: Exchange coverage begins

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

FPL Level 2009 Single Premium as Percent of Income Annual Up to 133% $14,844 2% $297 133% $14,845 3% $445 150% $16,742 4% $670 200% $22,322 6.3% $1,406 250% $27,902 8.05% $2,246 300% $33,483 9.5% $3,181 350% $39,063 9.5% $3,711 400% $44,644 9.5% $4,241

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30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

Employers



Greater than 50 FTE - Must offer “minimum essential coverage that is affordable or pay tax



Coverage must meet 60% actuarial value



Must be offered to 95% or workforce



Must limit employee cost to 9.5% of household income



If requirements are not met employer pays penalty – equal to lesser of



$2,000 for employee over 30 full time



$3,000 for each employee receiving tax credit on exchange

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

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“Reaching across Arizona to provide comprehensive quality health care for those in need”

Health Care Cost Trends

 Good News – Cost Trends Down  Bad News – Market needs to wrestle with

tremendous uncertainty

 Long Term – Change is a must

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

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“Reaching across Arizona to provide comprehensive quality health care for those in need”

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• 4.0
• 2.0

0.0 2.0 4.0 6.0 8.0 10.0 12.0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

NHE GDP

Growth in National Health Expenditures and Gross Domestic Product (GDP), 1985-2011

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group, U.S Department of Commerce, Bureau of Economic Analysis and National Bureau of Economic Research, Inc.

Annual Percent change

July 1990- March 1991 Recession March 2001- November 2001 Recession

Cal alendar Year Years

December 2007- June 2009 Recession 30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

• $850.6 billion in 2011
• Slower Growth in 2011

– A slowdown in price

growth and low growth in utilization

– Slower growth in

Medicaid

• Acceleration in Private

Health Insurance and Medicare

Hospital Spending, Annual Growth, 2000 - 2011

31%

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group. 24 6.7 4.9 4.3 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

Physician and Clinical Services Spending, Annual Growth, 2000 - 2011

• $541.4 billion in 2011
• Acceleration in 2011

–

Increase in growth in use and intensity of services; slower growth in prices



Clinical services’ spending increasing faster than physician services’ spending



Acceleration in Private Health Insurance and Medicare

20%

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group. 25

3.5 3.1 4.3

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

Retail Prescription Drugs Spending, Annual Growth, 2000- 2011

10%

SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group. 26



$263.0 billion in 2011



Faster growth in 2011



Brand name and specialty drug price accelerated



Increased spending on new brands

5.0 0.4 2.9 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

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30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

“Reaching across Arizona to provide comprehensive quality health care for those in need”

Market Uncertainty



What will Arizona do with AHCCCS and costs of uncompensated Care?



What will impact be to insurers and risk for community rating and guaranteed issue?



What is impact of having minimum Medical Loss Ratio?



Will people come into the coverage pool or pay the tax? (starts at $285 per family 2014 – 2016 $2,085 for family)



What will businesses do with existing coverage?



How many policies will need to have substantive benefit increase to meet EHB standards?



How will Reinsurance and Risk Adjustment work?



Short Term – uncertainty and risk will drive premiums



Restoration of AHCCCS very important piece of puzzle

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

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“Reaching across Arizona to provide comprehensive quality health care for those in need”

30 Years of Medicaid Innovation Our first care is your health care Arizona Health Care Cost Containment System

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