April 20 2017 David M Goldfarb JD Senior Public Policy Manager Contents American Health Care Act Targeted Medicaid Reform 1115 Waivers Other items tax SS Medicare ect Discussion ID: 757878
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Federal Policy UpdateColorado Elder Law Section
April 20, 2017
David M. Goldfarb, J.D.
Senior Public Policy ManagerSlide2
Contents
American Health Care Act
Targeted Medicaid Reform
1115 Waivers
Other items (tax, SS, Medicare,
ect
.)
DiscussionSlide3
American Health Care Act (AHCA)
AHCA contained
Health insurance reform
Tax cuts
Per-capita
cap Medicaid with block grant option
Ended Medicaid expansion
Targeted Medicaid Changes
Congressional Budget Office (CBO) analysis
24 million would lose coverage over ten years
$880 billion dollar cut to Medicaid
Tax cuts about equal to Medicaid cutsSlide4
AHCA: Health Insurance Reform
Continuous coverage requirement
Age-ratio increase with state flexibility
Tax support based on age with income phase-out
$100bn fund for states to use for reinsurance and other purposes
No individual or employer mandates
Actuarial value gone
Essential Health Benefits up to statesSlide5
Key Tax Cuts
Medical Expense Deduction
. Reduces the qualifying adjusted gross income threshold from 10 percent to 5.8 percent. Deduction was 7.5 percent pre-ACA.
Withdrawals from Health Savings Accounts
: Lowers non-medical expense withdrawal penalty from 20 percent to 10 percent — the amount before the 2010 law was passed.
Ends limits on Flexible Spending Accounts:
The ACA set a $2,500 cap, adjusted for inflation. The legislation would lift the cap.
End of Medicare Taxes for wealthy:
individuals earning more than $200,000 or $250,000 for couples pay a surtax of 0.9 percent.
Net investment tax of 3.8% above MAGI 200k/250k.Slide6
AHCA: Medicaid Reform
Current system
Based on a state-federal matching rate (FMAP).
Range varies from 1 extra dollar per dollar spent to 3 extra dollars per dollar spent.
Colorado is 1:1Slide7
AHCA: Medicaid Structural Reform
Per Capita Cap Overview
Caps federal contribution at a fixed dollar amount per beneficiary based on FY 2016 numbers by category.
Elderly and Disabled Categories after amended would grow at medical inflation plus one percent;
Other populations at medical inflation.
Block grant option only for non-disabled adults and children at inflation.Slide8
AHCA: Medicaid Structural Reform
Per Capita Cap Mechanics
Calculation run, essentially: $ per beneficiary * # of beneficiaries= total allowable federal contribution.
E.,g
: 5ths per beneficiary * 10ths beneficiaries= 50 million dollars federal cap
State spends using current FMAP.
Year1: spends 50 million gets 50 million
If state exceeds cap: Feds recoup payments on a quarterly basis following year
Year 1: 55 million + 55 million= 110 million; year 2= 55 million + 45 million (55 million minus 10 million);
If state spends under cap: no savings
Year 1: 45 million + 45 million= 90 million. Year 2: No free 5 million extra.Slide9
Per-Capita Cap Concerns
Change in state financial incentives
Cut in services and quality
Medicaid is mostly optional
Mandatory population: SSI
Mandatory NH vs. Optional HCBS: Optional
Medically needy pathway options
Eligibility changes inevitable
Easily “dial-able.”
Doesn’t address demographic shiftsSlide10
Medicaid: Coverage vs. SpendingSlide11
Targeted Medicaid ReformsSlide12
Lotto winnings under MAGI
Count certain lump-sum distributions as income over time for MAGI Medicaid
Proposal has gotten refined over time, AHCA just lotto winnings and inheritances.
$80,000 threshold before application.
Amortized at 10,000 a month thereafter.Slide13
CALM Act
½ of a community spouse annuity made available to the institutionalized spouse
Includes non-IRA retirement account
annuitization
within 5 year look back.
Approved by subcommittee, not included in AHCASlide14
CALM Act Cont.
Concerns
Overbroad: includes retirement accounts
Overbroad: hurts working/middle class not just high dollar annuities.
Incentivizes divorce.
Women most harmed.Slide15
End option for home equity limits
Ends option for a state to expand home equity limit for “single individuals” above 560k up to 840k (inflation adj.)
Also a bill- H.R. 1082, Medicaid Home Improvement Act.
Issues:
No guarantee of reverse
mtg
/line of credit; could cause forced sale;
If institutionalized: in some states becomes an available resource or in others family must maintain and deal with potential estate recovery; and
Counteracts HCBS
HCBS is cheaper because it does not pay for room and board.
Liquidation means no home to come back too if institutionalized.Slide16
End of 3 month retroactive coverage
Moved three month retroactive eligibility only to month of application.
Also a bill- H.R. 180.
Lose-Lose for Providers and Families:
Providers don’t get paid.
Families could get sued or not admit family member at appropriate time without Medicaid guarantee.Slide17
Community First Choice
Affordable Care Act created Community First Choice (CFC), a state plan option that provides personal attendant services without a waitlist. States got 6% FMAP boost in exchange.
Low income threshold (150% SSI)
AHCA sought to end 6% FMAP, potentially ending CFC as a viable option.Slide18
Money Follows the Person
Demo that:
Supports Medicaid enrollees who want to transition from nursing facilities back to community-based settings;
Helps states develop infrastructure to promote and enhance access to HCBS.
Expired last year (some funds remain).
Colorado Choice Transitions (CCT)Slide19
Arising issue: 1115 WaiversSlide20
Mar. 14 Price-Verma Letter
“Ushering in new era” where states have
more freedom to design plans
State plan amendments-
more fast-tracking
and approval of demos done in another state and review MCO regulations
HCBS settings- allow more time
and more state involvement in compliance
Wyden/Pallone
raise concern
about use of 1115 for work-requirements, cost-sharing, and other issues for NDE beneficiariesSlide21
1115 Waivers Basics
Negotiated with CMS
Notice and comment requirements
“Experimental, pilot, or demonstration project,
” meaning a state must be using the authority to test some hypothesis
Likely to assist in promoting the objectives of the Medicaid program.
Can waive Medicaid requirements
under 42 U.S.C 1396a
Budget neutral
comprehensive or narrowSlide22
Medicare, Social Security, and TaxationSlide23
Medicare
Big Medicare reforms not presently on agenda.
Chronic Care work in Senate Finance Committee
Working to end “observation status.”
Labeling prevents Medicare Part B SNF coverage
Therapy Cap exception expires Dec. 31, 2017.
Limits: Physical and Speech combined $1940.00; Occupational $1940.00
Automatic exception when beneficiary requires continued skilled therapy to achieve their prior functional status or maximum expected functional status within a reasonable amount of time
Exception for after $3700, subject to RAC reviewSlide24
Social Security
Good news: SS Retirement/SSDI cannot be done via reconciliation per rules!
Bad news: SSI can be reformed via reconciliation
SSI for Children
in Speaker Ryan’s Better Way
Expresses concern about number of Children on SSI
The individuals stay on SSI on average 26.7 years
30 percent of older teens on SSI dropout of H.S.
Solution: end or limit cash assistance and replace with services
, such as mental or physical therapies or SPED services in school.
Rep Payee Issues:
Bipartisan interest, hearing held on Feb. 7, NAELA participating in CCD recommendations.Slide25
Speaker Ryan’s Tax Proposal
Move towards elimination of deductions
No more AMT
lower rates on pass through and small businesses (topped at 25% bracket)
Capital gains get deducted by 50%, so taxed at either 6%, 12.5%, or 16.5%
Consolidate standard deduction, personal exemptions, and child tax credit
Consolidate education benefits (529,
ect
.)
End estate and generation skipping taxesSlide26
Tax Reform: Other Issues
ABLE Act
Improvements
529 Rollover
Increase by FPL ($11,400) if working
Age increase to 46
Elder care/ child care tax deductions/credits (Trump stated priority)
AHCA demise makes tax reform harder
Revenue-neutral or not? What can change via reconciliation? Disagreement on boarder adjustment tax.Slide27
Other Items
“Deconstruction of Admin state” and legal reforms.
Discretionary items, such as Senior Health Insurance Program (SHIP).
CHIP Expires Sept. 30, 2017
Could be vehicle for Medicaid eligibility cutsSlide28
Discussion