HEALTHCARE REFORM 2014 Medicaid Expansion Overview OCTOBER 2012 - - PowerPoint PPT Presentation

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HEALTHCARE REFORM

2014 Medicaid Expansion Overview

OCTOBER 2012

The enclosed slides are intended to provide you with an overview of the Affordable Care Act’s Medicaid expansion provision. Healthcare reform included significant federal funding for states to reduce the number of uninsured Americans by allowing more individuals to qualify for Medicaid coverage. This tool is designed to help distributors and manufacturers understand how this policy is expected to be implemented and its impact on the healthcare continuum. This is one of many healthcare reform resources HIDA has developed. For more information on healthcare reform, visit www.HIDA.org, or contact HIDA Government Affairs at 703-549-4432.

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June 28, 2012, the Supreme Court ruled that the expansion of Medicaid under the Affordable Care Act (ACA) is constitutional if the federal government does not penalize states (i.e., withhold funds) that choose not to implement this expansion. 1

Expanding Medicaid in 2014 is no longer a mandate on states, but a choice.

State governments continue to weigh the decision

• f whether or not to participate
• Six states plan to decline funding for a Medicaid

expansion (FL, LA, MS, SC, TX and WI); Texas and Florida represent large numbers of uninsured

• A total of 15 states are leaning toward rejecting the

Medicaid expansion (AL, GA, IN, IA, KS, MO, NE, NV and VA)

• Some states believe the expansion could save them

significant amounts of money (AR, OK)

• Worst case – 26 states that sued the federal

government after the passage of healthcare reform could decide to opt out leaving 11-13 million uninsured

1 Kaiser Family Foundation, A Guide to the Supreme Court’s Affordable Care Act Decision (July 2012), available at: http://www.kff.org/healthreform/upload/8332.pdf n States challenging the ACA (25 states) n States both challenging and supporting the ACA (2 states) n States supporting the ACA (11 states) States not taking a position in the litigation (12 states)

MI IN OH WA OR ID SD IA IL KY NC SC GA AL LA AR OK KS CO AK WV PA ME MA NH RI CT NJ DE MD DC MS TX NM AZ HI UT WY NE MT ND WI VA FL NV MO TN MN CA NY VT

States’ Positions in FL. v. HHS Supreme Court Case

Source: http://www.kff.org/healthreform/upload/Health-Care-Reform-at-the-U-S-Supreme-Court-Presentation-Slides.pdf

Note: VA filed its own challenge separately and is not a party in the case accepted by the Su- preme Court

The Supreme Court Decision: Breaking Down the Impact

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To help decrease the number of uninsured, the ACA gives states the opportunity to secure significant federal funding for expanding Medicaid coverage to low-income individuals.

The Medicaid expansion is projected to provide health coverage to 11 million more low-income adults and children by 2022.2

When will the Medicaid expansion go into effect?

January 1, 2014 however, states have the option to get an early start on expansion.

How much of the cost of the Medicaid expansion will the federal government cover?

States will receive 100% federal match for all newly eligible beneficiaries up to 133% federal poverty level (FPL) in 2014-2016, 95% in 2017, 94% in 2018, 93% in 2019 and 90% federal financing for 2020 and subsequent years.3

2 Congressional Budget Office, Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision (July 2012), available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/43472-07-24-2012-CoverageEstimates.pdf. 3 ACA § 2001(a)(1), codified at 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII). The ACA expands coverage to 133% FPL and also provides for an income disregard of 5% FPL, effectively extending eligibility for the Medicaid expansion group to 138% FPL ($15,415 for an individual and $31,809 for a family of four in 2012). ACA § 2002(a), adding 42 U.S.C. § 1396a(e)(14)(I).

$931 billion (93%)

Federal Share

$73 billion (7%)

States’ Share

Federal Government Will Bear Nearly All Medicaid Expansion Costs Over 2014-2022

Source: http://www.cbpp.org/cms/index.cfm?fa=view&id=3801

Expanding Medicaid Enrollment is a Key Element in Reform

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To date, only seven states and the District of Columbia have begun the process to cover more adults before the 2014 expansion of the Medicaid program. 4

Benefits

• Increases access to healthcare coverage
• Eases cost pressures on states from uncompensated care provided to the uninsured
• Increased federal funding reduces the cost to states

Challenges

• Could increase overall spending by states;

adding pressure to state budgets

• Reduces current Medicaid funding by cutting

disproportionate share hospital (DSH) payments

• Woodwork effect – people who are already

eligible for Medicaid but aren’t currently enrolled will seek coverage–this population would not be covered by the 100% federal match

4 American Medical News, Only 7 States, D.C. expand Medicaid ahead of 2014 (June 11, 2012) available at: http://www.ama-assn.org/amednews/2012/06/11/gvsb0611.htm

States Getting an Early Start on the Medicaid Expansion, April 2010-May 2012

Coverage Authority Effective Date Income Limit Enrollment CA Waiver Nov 1, 2012 200% FPL 251,308 CT ACA Option April 1, 2010 56% FPL 74,752 CO Waiver April 1, 2012 10% FPL 10,000 DC ACA Option Waiver July 1, 2012 Dec 1, 2011 133% FPL 200% FPL 40,776 3,411 MN ACA Option Waiver March 1, 2010 August 1, 2011 75% FPL 250% FPL 80,200 41,811 MO Waiver July 1, 2012 133% FPL N/A NJ Waiver April 14, 2011 23% FPL 53,490 WA Waiver Jan 3, 2011 133% FPL 50,920

Source: http://www.kff.org/medicaid/upload/8312.pdf

State Governments Decide Fate of Medicaid

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Expectations for 2014

Increased patient load for providers

• Doctors, hospitals and insurers are preparing for an influx of new patients
• Providers are adopting “medical homes” to coordinate care
• The full economic impact on providers and suppliers is unknown (e.g., potential provider and healthcare workforce

shortages may complicate expansion)

Expanded benchmark benefits package = increased market access to products and services

• The ACA lists ten broad categories of “essential health benefits” for which coverage

will be mandatory in the Medicaid expansion

• Medicaid must provide preventive services with no cost sharing, deductibles or

copays

• States may choose to offer Medicaid coverage beyond federal requirements

Impacts on supply chain partners

• Variations in Medicaid expansion means manufacturers and distributors must pay

greater attention to state specific programs and the impact on their customer base

• Healthcare providers and suppliers may continue to be faced with uninsured low-

income patients and the problems of uncompensated care

2014 Medicaid expansion benchmark benefits package Essential health benefits must include:

• Ambulatory patient services;
• Emergency services;
• Hospitalization;
• Maternity and newborn care;
• Mental health and substance

use disorder services, including behavioral health treatment;

• Prescription drugs;
• Rehabilitative and habilitative

services and devices;

• Laboratory services;
• Preventive and wellness services and

chronic disease management; and

• Pediatric services, including oral and

vision care.

Source: Patient Protection and Affordable Care Act