MassHealth: Dispelling Myths & Preserving Progress - - PowerPoint PPT Presentation

Massachusetts Health Policy Forum, 2002

MassHealth:

Dispelling Myths & Preserving Progress

Massachusetts Health Policy Forum June 5, 2002

Karen Quigley, Audrey Shelto, Nancy Turnbull

Massachusetts Health Policy Forum, 2002

Successes of MassHealth

• Program serves most vulnerable
• State’s deliberate efforts to expand health

coverage have been very successful

• Expansions are a major reason for relatively low

rate of uninsured in Massachusetts – 3% for children vs. 12% in US – ~6% for adults vs. 16% in US

• Program is essential source of payment for many

providers, particularly the safety net

Massachusetts Health Policy Forum, 2002

MassHealth Enrollment Has Grown by Over 300,000 since FY97

200,000 400,000 600,000 800,000 1,000,000 1,200,000 FY97 FY98 FY99 FY00 FY01 FY02

Children & Families Disabled Seniors Basic

Massachusetts Health Policy Forum, 2002

MassHealth Spending: FY 1996-2003p*

*Excludes disproportionate share hospital payments. Source: Mass. Taxpayers Foundation $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 1995 1996 1997 1998 1999 2000 2001 2002e 2003p Fiscal Year in millions

State Federal

(estimated) (projected)

1995 1996 1997 1998 1999 2000 2001 2002e 2003p State 1,476.7 $ 1,543.9 $ 1,657.5 $ 1,603.9 $ 1,819.9 $ 2,043.4 $ 2,140.4 $ 2,465.6 $ 2,769.9 $ Federal 2,026.6 $ 1,980.6 $ 1,939.3 $ 2,172.8 $ 2,155.3 $ 2,347.0 $ 2,623.8 $ 2,910.2 $ 3,182.1 $ Total Medicaid 3,503.3 $ 3,524.5 $ 3,596.8 $ 3,776.7 $ 3,975.2 $ 4,390.4 $ 4,764.2 $ 5,375.8 $ 5,952.0 $

Massachusetts Health Policy Forum, 2002

Less Than Half of MassHealth Spending is Paid by the State

42% 44% 46% 42% 46% 47% 45% 46% 47% 58% 56% 54% 58% 54% 53% 55% 54% 53%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002e FY 2003p

Fiscal Year % of Total Expenditures

State Share Federal Share

Source: MTF and DMA slides

Massachusetts Health Policy Forum, 2002

MassHealth Is A Growing Share of the State’s Budget, Both In Total and in Terms of the State Share

• f Spending

Source: MTF, 2002e based on governor’s supplemental requests to date; 2003p Medicaid based on House 1, total budget based on MTF projection of 3% growth over 2001.

9.1% 9.1% 9.4% 8.6% 9.3% 9.7% 9.7% 10.7% 11.7% 12.5% 11.7% 11.0% 11.7% 11.0% 11.2% 11.9% 12.6% 13.4%

0% 5% 10% 15% 20% 25% 30% 1995 1996 1997 1998 1999 2000 2001 2002e 2003p Fiscal Year % of state budget State Share Federal Share

1995 1996 1997 1998 1999 2000 2001 2002e 2003p State Share 9.1% 9.1% 9.4% 8.6% 9.3% 9.7% 9.7% 10.7% 11.7% Federal Share 12.5% 11.7% 11.0% 11.7% 11.0% 11.2% 11.9% 12.6% 13.4%

Massachusetts Health Policy Forum, 2002

The State’s Share of MassHealth Spending is Not Out of Line With Spending for Other Important Priorities, Such as Education and Benefits for State Employees

Source: Mass. Taxpayers Foundation

$0 $1,000 $2,000 $3,000 $4,000

MassHealth: State Share Employee Benefits Debt Service Higher Ed Mental Retardation Corrections

Spending in FY 2001 (Dollars in Millions)

Education Local Aid

Massachusetts Health Policy Forum, 2002

Most MassHealth Spending Is For A Relatively Small Proportion of Members, Most of Whom are Elderly or Disabled

Enrollees Expenditures

954,900

Source: Division of Medical Assistance, enrollment as of 6/30/01 and FY 2001 estimated expenditures.

$4,850,000

Families 24% Disabled 34% Seniors 37% LT Unemployed 5% Families 62% Disabled 20% Seniors 12% LT Unemployed 7%

Massachusetts Health Policy Forum, 2002

Services Provided to Elderly and Disabled Members Are Much More Expensive Than Those Provided to Families and Long-Term Unemployed Adults

$5,195 $2,743 $3,460 $8,723 $17,515 $0 $5,000 $10,000 $15,000 $20,000

All Members Families Long Term Unemployed Disabled Elderly

Expenditures Per Member: FY 2002

Source: DMA

Massachusetts Health Policy Forum, 2002

Explaining The Trends in MassHealth Spending

Massachusetts Health Policy Forum, 2002

Increased Membership Explains 55% of the Increase in Expenditures, and Cost Per Member Accounts for 45% FY98-01

Family Cost Per Member 11% LT Unemployed Caseload 9% Senior Cost Per Member 7% Senior Caseload 13% Family Caseload 17% Disabled Cost Per Member 23% Disabled Caseload 16% LT Unemployed Cost Per Member 4%

Massachusetts Health Policy Forum, 2002

Expansion Accounts for 11% of Total MassHealth Costs in FY01 and 33% of Increases from FY97-02

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

Expansion $166 $322 $436 $547 $629 Non-expansion $3,570 $3,608 $3,652 $3,982 $4,236 $4,747

1997 1998 1999 2000 2001 2002 est

Source: Massachusetts Taxpayers Foundation. 2002.

Medicaid Expenditures: Expansion and Non-Expansion Populations ($ millions)

11.7 % 11% 10% 8% 4%

Massachusetts Health Policy Forum, 2002

Uncompensated Care Costs Went Down During the Initial Period of MassHealth Expansion

($ millions) $322 $309 $305 $345 $356 $81 $78 $70 $77 $75 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 1998 1999 2000 2001 2002 (est) Emergency Bad Debt Free Care

Source: DHCFP

Massachusetts Health Policy Forum, 2002

Distribution of MassHealth Fee for Service Payments, FY 01

Community Based Care 12.1% Pharmacy 18.8% Acute Care Hospitals 16.3% Long Term Care Facilities 37.5% Professional Services 6.8% Ancillary/Support Services 3.5% Medicare Crossover Payment 5.0%

Massachusetts Health Policy Forum, 2002

Total Spending on Pharmacy is Growing Twice as Fast as Spending for Any Other Service

19.9% 11.8% 11.6% 10.3% 9.6% 4.5% 3.6% 8.9% 0% 5% 10% 15% 20% 25% Pharmacy Acute Care Hospitals Community Based Care Ancillary/Support Services Professional Services Medicare Crossover Payments Long Term Care Facilities Total

Average Annual Percent Increases in Total Spending*, FY98 – FY01

*Total spending reflect the effect of changes in membership, member mix, utilization and rates of payment

Massachusetts Health Policy Forum, 2002

Causes of PMPM Cost Increases Vary by Group

• 20%

0% 20% 40% 60% 80% 100% Pharmacy 20% 51% 51%

• 0.7%

Acute Hospital 25% 9%

• 2%

24% Comm LTC

• 1%

13% 44%

• 0.6%

Non Disabled Children and Disabled Adults and Seniors LT Unemployed Percent Contribution of Three Services to PMPM Expense Increases by Enrollment Group, FY98 - FY01

Massachusetts Health Policy Forum, 2002

Cost per Prescription is Driving Pharmacy Costs PMPM

% Change in Total Pharmacy Cost PMPM 12.3% 13.8% 11.3% 9.0% % Change in Cost/Script 6.8% 10.0% 7.7% 6.5% % Change in Scripts/Member 5.2% 3.4% 3.3% 2.4% Disabled Adults and Children Non-Disabled Adults and Children Seniors Basic

Source: DMA, FY00 – FY01 Change, Data through 3/30/02

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% % Change from FY00 – FY01

Massachusetts Health Policy Forum, 2002

Putting MassHealth in Perspective

Massachusetts Health Policy Forum, 2002

Recent MassHealth Spending Growth is Lower than Trends for Private Health Insurance Premiums

8% 19% 15% 11% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% MassHealth Mass: Individual Plan Mass: Family Plan National Average- Employers

MassHealth FY 2001 PMPM Growth Compared to Average Premium Growth

Source: DMA; Division of Health Care Finance and Policy, 2001 Employer Health Insurance Survey; Kaiser Family Foundation, Trends and Indicators in the Changing Health Insurance Marketplace, 2002.

Massachusetts Health Policy Forum, 2002

Administrative Costs for MassHealth Are Far Lower Than For Commercial Health Plans

Source: DMA and health plan 2001 financial reports. MassHealth inclues administrative costs included in contracts with managed care plans and contract with UMass Medical School

3.2% 12.0% 9.0% 10.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% MassHealth Blue Cross Blue Shield Harvard Pilgrim Tufts Health Plan Administrative Costs as a Percent of Expenditures, 2001

Massachusetts Health Policy Forum, 2002

Total Medicaid Expenditures as a Percent of Total State Expenditures, FY01

0% 5% 10% 15% 20% 25% 30% 35% 40% MA CA CO CT DE IL MD MN NH NJ NY WA State

Source: National Association of State Budget Officers

The Percent of Massachusetts State Expenditures Going to the Medicaid Budget is Average Compared to Peer States

Massachusetts Health Policy Forum, 2002

How Much Can A Working Parent with Two Children Earn and Still Be Eligible for Support?

$19,452 $15,708 $6,132 $22,966 $15,708$14,628 $6,288 $40,224 $14,628 $29,260 $21,942 $29,256 $0 $10,000 $20,000 $30,000 $40,000

Annual Income Eligibility Threshold

MA CA CO CT De IL MD MN NH NJ NY WA

Source: Center on Budget and Policy Priorities, July 2001.

MassHealth Income Standards Are Generally Consistent With, And In Many Cases More Stringent, Than Those in Peer States

States with 50% FMAP

Massachusetts Health Policy Forum, 2002

Average Medicaid Expenditure Per Member, FY98

$6,323 $2,040 $4,395 $6,857 $4,361 $4,111 $4,852 $5,715 $7,126 $5,601 $8,356 $2,328 $3,939

$0 $2,000 $4,000 $6,000 $8,000 $10,000 MA CA CO CT DE IL MD MN NH NJ NY WA US State Average expenditure

CMS "A Profile of Medicaid: 2000. Figures exclude DSH

Massachusetts Health Policy Forum, 2002

A Larger Proportion of MassHealth Members are Elderly, Disabled and/or in Nursing Homes Than in Other States

Source: Kaiser Family Foundation, State Health Facts

Indicator MA Rank

• f 13 states

Medicaid Spending Per Member #4 Medicaid Spending Per State Population #2 Percent of State Population on Medicaid #3 Elderly and Disabled as % Medicaid Members #1 Percent of state population 65+ On Medicaid #3 LTC spending as % total Medicaid spending #4 #6 State Health Spending/Capita #1 Percent of Medicaid Members in Nursing Homes

Massachusetts Health Policy Forum, 2002

What More Can Be Done?

Massachusetts Health Policy Forum, 2002

Broad Program Cuts are Not the Answer

• “Penny wise and pound foolish”
• Impact on UCP
• Loss of federal revenues
• Effect on poorest and most vulnerable
• Need is growing with economic downturn
• Potential consequences for financial condition of

many providers

Massachusetts Health Policy Forum, 2002

Focus on Major Spending Areas

• Institutional long-term care

– Senior Care Options – Major reform of long-term care financing and delivery

• Prescription Drugs

– Drug lists, drug price reductions

• Acute care hospital services

– Care management and disease management – Initiatives to encourage community-based care

Massachusetts Health Policy Forum, 2002

Other Priorities

• Federal revenue maximization
• Reform of Uncompensated Care Pool
• Longer-term approach to planning and financing

MassHealth (e.g.,ensure on-going health of Trust Fund)

• On-going mechanism for independent analysis and

public discussion of MassHealth