Medicaid’s 3 Big Changes: Consequences for Consumers

1. Presentation for Consumer Providers Association of New Jersey Tom Pyle, Advisor August 2013 Medicaid’s 3 Big Changes: Consequences for Consumers

2. What’s coming…

3. What’s coming…

4. Topic Fee for service  Managed care… Integration of PH and BH… Medicaid expansion… Health insurance exchanges… Evidence-based practices..Community integration… Medical model  Recovery model… The biggest change in 50 years… How will our loved ones be affected?

5. Medicaid’s 3 Big Changes • Reform • “Innovations” (ACOs) • “Benchmark” plans • Expansion • 25% increase • Managed care • BH  ASO • Grant  FFS  Case Capitated

6. Outcomes Access Availability Quality Cost Innovation

7. What is Medicaid? • Big funder of… • Health care for poor, disabled • Safety-net hospitals, LT care • Federal-state partnership • FMAP: 50% to 83% • NJ: 50%

8. What is “FMAP”? • Federal Medical Assistance Percentages (FMAP): the percentage rates that determine the matching funds allocated annually to Medicaid.

9. Medicaid: Expenditures FY 2010 (Centers for Medicare and Medicaid, 2012) Total = $404.1 billion

10. Medicaid as % of…(Foster, 2012) GDP: 2.8% Health spending: 15% 15%

11. MH Funding: Only 1 Component (Smith, Kennedy, Knipper & O’Brien, 2005)

12. Segments % paid by Medicaid (Foster, 2012)

13. Medicaid: Acute/LT Care 2009(Kaiser Commission on Medicaid and the Uninsured)

14. Waste, Fraud, Abuse(Kaiser Commission on Medicaid and the Uninsured, 2012) • Overtreatment • Failure of care coordination • Failure of care process (Tx) • Administration complexity • Failure of pricing • Fraud and abuse At least 20% of costs

15. Enrollment & Shares, 2010(Centers for Medicare and Medicaid et al., 2012) ~ 60 mm

16. Overview: Role in state budgets • Counter-cyclical to economy • Largest source of federal revenue ( jobs) • Biggest target for state cost controls

17. Overview: Role in federal budget • 3rd largest domestic program • Exempt from automatic budget reductions

18. Overview: Medicaid role in ACA • Coverage base for the poor (< 133% FPL) • Insurer of 17 mm currently uninsured • Funder of experimental models being tested

19. Health insurance coverage Medicaid: Components(Kaiser Commission on Medicaid and the Uninsured) • Long-term care assistance • Funding for state capacity • Health insurance coverage • 31 mm children; 16 mm adults; 16 mm E&D • Long-term care assistance • 1.6 mm institutionals; 2.8 mm community-based • Assistance to Medicare beneficiaries • 9.4 mm E&D (20% of Medicare enrollees) • Safety net & system funding • 16% national health funding; 35% safety net hospitals • Funding for state capacity • FMAP • Safety net & system funding • Assistance to Medicare beneficiaries

20. Thinking about Medicaid…

21. Eligibility (3 kinds)

22. 1. Category Eligibility • Children • Pregnant women • Parents • Seniors • Individuals with disabilities

23. 2. Financial Eligibility 2013 Federal Poverty Limit (FPL) Family of 1: $11,490 x 133% = $15,282 Family of 4: $23,550 x 133% = $31,322

24. Eligibility: FPL by Class (US)(Kaiser Commission on Medicaid and the Uninsured)

25. Eligibility: FPL by Class (NJ)(Kaiser Commission on Medicaid and the Uninsured)

26. Eligibility: FPL (After ACA)(Kaiser Commission on Medicaid and the Uninsured; Tate, 2012))

27. 3. Resource Eligibility (SSI) < +

28. Eligibility: ACA’s effect(et al., 2013)

29. Eligibility: Overlap!(Blahous, 2013) • Medicaid: < 138% FPL. • Exchanges: > 100% FPL.

30. Enrollment (et al., 2013)

31. Enrollment FY 2010(Centers for Medicare and Medicaid et al., 2012) 62 mm (53 mm PYEs)

32. Expenditures by Enrollment 2010(Centers for Medicare and Medicaid et al., 2012)

33. Medicaid: Dual Eligibles 2009(Kaiser Commission on Medicaid and the Uninsured)

34. Today’s enrollee demographics(Kenen, 2012) • Poor families with children • 2/3rd of enrollees • 1/3rd of spending • Elderly and disabled • 1/3rd of enrollees • (including 70% of those in nursing homes) • 2/3rd of spending

35. Medicaid: Enrollment after ACA(Tate, 2012) • New eligibles • 9 mm old eligibles not yet enrolled  57%

36. Enrollment demographics(Sommers & Epstein, 2010) • Eligibles: Nearly 1 in 3 not enrolled! • Enrolled eligibles: Highly variable by state OK 44% MA 80%

37. Enrollment demographics(Sommers & Epstein, 2010) • Eligibles: Nearly 1 in 3 not enrolled! • Enrolled eligibles: Highly variable by state OK 44% MA 80% NJ 53%

38. Current vs. Future Eligibles(Sommers & Epstein, 2010)

39. Currently Enrolled by Groups(Kaiser Commission on Medicaid and the Uninsured)

40. NJ: Total Uninsured Since 2000(Castro, 2012)

41. ACA Effects: NJ Beneficiaries(Castro, 2012)

42. ACA Effects: Federal Funding NJ(Castro, 2012)

43. Coverage

44. Coverage(Garfield, Lave, & Donohue, 2010)

45. Challenge: Less Coverage?(Garfield, Lave, & Donohue, 2010) “Benchmark” Essential Benefits coverage under ACA Excludable for newbies under ACA

46. Medicaid: Benefits (Centers for Medicare and Medicaid, 2013) • Doctor visits • Emergency care • Hospital care • Prescription drugs • Long-term care • Vaccinations • Hearing • Vision • Preventative care for children

47. Medicaid: Styles • Classic Fee for service • Managed care Comprehensive set of contractually-defined covered services for an enrolled population in a closed network paid by capitation premiums

48. Rates

49. Managed Care: Elements • Enrollment • Benefits • Usage • Cost sharing (co-pays) • Access • Quality • Accountability

50. Managed Care: 3 Plan Types • Risk-based managed care orgs/plans (MCO) • Capitation • Who takes the risk? State or vendor? • Primary care case mgt plans (PCCM) • Case management fee • Limited plans • In-patient • Ambulatory