Joan Alker and Jack Hoadley Georgetown University Health Policy Institute November 15 2012 Quick review of ACA structure Two principal means to achieve near universal coverage Federal premium tax credits from 100400 FPL to be used in state or federal exchange CBO 2025 million pers ID: 550928
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Slide1
Florida's Medicaid Choice: What Does the Supreme Court Ruling Mean?
Joan
Alker
and Jack
Hoadley
Georgetown University Health Policy Institute
November 15, 2012Slide2
Quick review of ACA structure
Two principal means to achieve near universal coverage
Federal premium tax credits from 100-400% FPL to be used in state or federal exchange; CBO = 20-25 million persons covered
Medicaid expansion to 133% FPL for parents and childless adults; CBO = 16-17 million persons covered
2Slide3
Current Medicaid eligibility l
evels in FloridaSlide4
What did the Supreme Court decision say?
The entire law was upheld with one exception – the mandatory nature of the Medicaid expansion
Language of decision was clear that existing Medicaid was not touched – the decision only touched the “newly eligible” group
4Slide5
What does the Supreme Court decision mean?
Other parts of the ACA which relate to Medicaid remain intact
There are many but one worth noting is the “maintenance of effort” which prohibits states from rolling back eligibility for adults until 2014; children 2019. This includes proposals to make it harder for people to enroll such as premiums or other ways in which a state might add “red tape.”
5Slide6
What does the Supreme Court decision mean?
Important outcome is that extension of Medicaid is optional – states must make a choice.
Fed
government has made clear that state can come in or out at any time simply by submitting a state plan amendment.
FL legislature has key role to playMight states pursue waivers?
6Slide7
Who will remain uncovered without broader Medicaid coverage?Slide8
What is at stake in florida’s choice?Slide9
Florida has a lot of uninsured people
9Slide10
Rate of
uninsured
in Florida
compared
to the United States
Source: 2011 American Community Survey
10Slide11
How many Floridians would gain coverage?
We estimate that 815,000 to 1,270,000 adults and children would gain coverage if the state extended Medicaid to parents and other adults below 133% FPL.
11Slide12
Why would children get coverage?
Coverage is being extended for parents and adults – the “newly eligible”
But we know that more current
eligibles will get enrolled as a result of the “welcome mat” effect. Most of these “eligible but
unenrolled” will be children.
12Slide13
Different federal matching rates apply
“Newly eligible” are funded at 100% federal cost for FY2014-2016; tapers down to 90% over the next seven years;
Current
eligibles get regular Medicaid match rate (58%) or CHIP match rate (71%)Participation rates are likely to go up even without Medicaid extension because of new “culture of coverage”
13Slide14
Uninsured children in Florida
Percent of Uninsured Children
2011
State Ranking in Percent of Uninsured Children
Number of Uninsured Children
2011
State Ranking in Number of Uninsured Children
Florida
11.9%
48th
475,112
49th
National
7.5%
--
5,527,657
--
14Slide15
Florida vs. neighboring states: Rate of uninsured children in 2011
Florida
11.9%
Alabama
5.3%
Georgia
9.5%
Louisiana
5.8%
South Carolina
8.4%
15Slide16
Adults newly eligible for Medicaid
Adults currently eligible for Medicaid
Children currently eligible for Medicaid
Total
Total uninsured
1,295,000
257,000
500,000
2,052,000
Projected take-up rate
(
low assumption)
57%
10%
10%
Number projected to gain Medicaid coverage
(
low assumption)
740,000
25,000
50,000
815,000
Projected take-up rate (high assumption)
75%
40%
40%
Number projected to gain Medicaid coverage
(
high assumption)
970,000
100,000
200,000
1,270,000
New Medicaid
enrollment
if
changes occur
16Slide17
Medicaid coverage saves lives
Well documented that Medicaid improves access and improves health
M
ortality declined by more than 6% for newly covered adults in MedicaidNewish Oregon study found health status, access to regular source of care/prescription
drugs improved as did financial security
17Slide18
What’s at Stake for Florida’s hospitals?Slide19
Florida’s hospitals are at risk
The ACA includes significant cuts to Medicaid and Medicare Disproportionate Share Hospital (DSH) programs.
These programs provide funds to hospitals who provide a high level of uncompensated care.
ACA assumed much uncompensated care would go away b/c of Medicaid expansion.
19Slide20
Hospital DSH cuts are severe
Between FY2014-FY2022 Medicaid DSH nationally is reduced by approximately 50%.
Medicare DSH is reduced by approximately 75% starting in FY2014.
Secretary of HHS hasn’t issued rules yet on how cuts will be allocated.Florida hospitals could face annual cuts of c. $640 million.
20Slide21
Florida hospitals are in double jeopardy
Florida’s Medicaid 1115 five county waiver includes a fund of $2 billion federal dollars known as the “Low Income Pool.”
These funds go to providers, mainly hospitals, serving large numbers of uninsured persons.
The LIP and the waiver expire on June 30, 2014.
21Slide22
What’s at Stake for Florida’s budget?Slide23
Facts to consider
Generous federal funds available for those newly eligible for Medicaid:
100% federal funding from 2014 to 2016
90% or higher federal funding thereafterNormal federal funding for “eligible for not enrolled”
58% in FY 2013
23Slide24
Does everyone eligible enroll?
Current enrollment rate for children, among those eligible
FL: 77%
US: 85%Current enrollment for adults, among those eligible
FL: 45%US: 65%
24Slide25
Projecting new enrollment rates
Newly Eligible
Individuals
Currently Eligible but Not Enrolled Individuals
Initial State Assumption
100%
100%
Revised State Assumption
80%
No official assumption
High Urban Institute
Assumption
75%
40%
Low Urban Institute Assumption
57%
10%
25Slide26
Translating enrollment to costs
Primary source for cost of Medicaid enrollees:
FL Social Services Estimating Conference
ModificationsLower assumption for rate of enrollment for “eligible but not enrolled”
Add costs for higher payments to physicians for primary care servicesAccount for offsetting
savings
26Slide27
Sources of offsetting savings
State support for safety-net institutions (public hospitals, health centers)
State services for people with mental health issues, substance abuse problems, HIV/AIDS
Medicaid eligibility changes due to health insurance exchange availability
Medically needy populationOthers (e.g., pregnant women)
27Slide28
BEST ESTIMATE
NEW
STATE COSTS
PER YEAR
Cost of Medicaid Coverage for Newly Eligible Population
$300 million
Cost of Medicaid Coverage for New Enrollment by Currently Eligible Population
$100 million
Cost of Continuing Higher Primary Care Payment Rates for Physicians
$200
million
TOTAL NEW STATE COSTS PER YEAR
$600
million
OFFSETTING
STATE SAVINGS
PER YEAR
State Support for Safety
Net Providers
$200 million
State Mental Health, Substance Abuse Programs
$250 million
Medicaid Eligibility Changes, e.g., Medically
Needy Program
$250
million
TOTAL OFFSETTING
STATE SAVINGS PER YEAR
$700
million
NET
STATE SAVINGS
PER YEAR
$100
million
Note: Estimates are based on a single year after 100 percent federal funding is phased out. New state costs will be lower in earlier years, especially from 2014 through 2016.
Projecting future state costs (2020)
28Slide29
BEST ESTIMATE
NEW
STATE COSTS
PER YEAR
Cost of Medicaid Coverage for Newly Eligible Population
$0
million
Cost of Medicaid Coverage for New Enrollment by Currently Eligible Population
$100 million
Cost of Continuing Higher Primary Care Payment Rates for Physicians
$0
million
TOTAL NEW STATE COSTS PER YEAR
$100
million
OFFSETTING
STATE SAVINGS
PER YEAR
State Support for Safety
Net Providers
$100
million
State Mental Health, Substance Abuse Programs
$150
million
Medicaid Eligibility Changes, e.g., Medically
Needy Program
$150
million
TOTAL OFFSETTING
STATE SAVINGS PER YEAR
$400
million
NET
STATE SAVINGS
PER YEAR
$300
million
Projecting future state costs, (2014)
29Slide30
Bottom line
Florida incurs few costs for adults newly eligible for Medicaid, slightly higher costs for new enrollment by those already eligible
But savings due to more coverage should more than offset costs
New coverage has positive effects for health and quality of life
30Slide31
For more information
Visit the Jessie Ball
duPont
Fund websitehttp://www.dupontfund.org
Visit the Winter Park Health Foundation websitehttp://
www.wphf.org
T
he Georgetown University project website
http://
hpi.georgetown.edu
/
floridamedicaid
31