Finalizing the Roadmap

1. Finalizing the Roadmap Long-Term Care Financing Advisory Committee June 4, 2010 Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

2. Overview of presentation • New visuals: distribution of total incurred LTSS costs by individuals v. government (2010, 2030 status quo, Phase I, Phase II, Phase III) • Critical outstanding questions from Section III • Other high-level comments on draft of Sections III, IV and V • Committee business

3. Reminder: Principles for reforming the LTSS system • Ensure a strong public safety net for the poor and most vulnerable. • Assure quality of care and cost efficiency. • Limit financial pressure on the state financing system to preserve state funds for those most in need. • Encourage personal planning for financing LTSS. • Enable middle-income people to access LTSS without becoming impoverished. • Support informal caregivers.

4. Reminder: High-level view of roadmap strategiesVehicles for achieving universal LTSS coverage in MA

5. Reminder: Current MA LTSS cost estimate = $18 billion; more than half is informal care Projected MA LTSS Spending / Cost in 2010 (in millions)(based on MA data and national averages) Currently, approximately $9.5B of LTSS is informally provided - Informal care and unmet need $9,578 (53%) - Out-of-pocket $1,435 (8%) - Out-of-pocket $1,435 (16%) - Private insurance - Private insurance $793 (9%) $793 (4%) - Other State of MA - Other State of MA $906 (11%) $906 (5%) - Medicaid $3,878 (45%) $3,878 (21%) - Medicaid - Medicare - Medicare $1,618 (19%) $1,618 (9%) Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

6. Reminder: In the absence of state intervention, total LTSS costs in MA will increase by at least 50% in the next 20 years; Medicaid costs will more than double Projected total LTSS cost in MA (in millions)(assumes no changes to current MA financing of LTSS other than CLASS implementation) Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

7. In 2010, 64% of total LTSS cost is borne by individuals and families (mostly through informal caregivers at the time of need); while MA pays approximately 16% of total LTSS costs Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

8. In 2030, absent changes other than CLASS, MA’s portion of total LTSS costs will increase to over 21%; although the portion borne by individuals and families will decline to 52%, advanced planning by individuals increases Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

9. With Phase I strategies, advanced planning by individuals continues to increase (from 14% of total LTSS cost in status quo to 17%); MA portion of total LTSS costs increases slightly to 22% Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

10. With Phase II strategies, MA portion of total LTSS costs increases slightly to 23%; individual out-of-pocket spending increases slightly due to state buy-in program Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

11. With Phase III strategies, advanced planning by individuals increases significantly to 46% of total LTSS costs; MA portion of total LTSS costs decreases significantly to 17% Medicaid expansion cost estimates were developed specifically for this presentation, and should not be used for other purposes.

12. Critical outstanding questions in Section III • Sufficiency of language on universal coverage / mandate and links to the strategies for achieving it • Necessity (and cost) of state buy-in program (Strategy 2.2) • See notes for discussion on following two slides • Areas where Advisory Committee statements should be stronger • E.g., Role of the state as employer in incentivizing employee uptake of / participation in various strategies; strengthen language within strategies or have it be its own strategy? • Clarity and message of visuals

13. Notes for state buy-in program discussion • Original purpose: • Option for elders with immediate LTSS needs to purchase coverage at time of need (like CommonHealth for non-elderly) • Opportunity to buy into an integrated care and financing system; organized way to “spend-down” to Medicaid eligibility • Potential bridge to state contribution program that covers elders • Concerns remain: • Significant potential for adverse selection • Could discourage advance planning for LTSS needs • Extremely expensive for those who buy-in without state subsidy (although may be able to use LTSS insurance/CLASS cash benefits to help pay premium)

14. Notes for state buy-in program discussion (2) • Concerns remain (continued from previous slide): • Additional cost of $300M to MassHealth is large • Cost is from subsidies for those < 300% FPL / $50K in assets (including federal match) and from people spending-down to Medicaid faster due to cost of program • Providers concerned about increase in Medicaid payer mix (lower rates than private pay) • Other options re: state buy-in • Eliminate this strategy • Change strategy to be one-time public grants or seed money to encourage private sector to build these integrated care / financing systems

15. Other high-level comments on draft of Sections III, IV and V • ?

16. Committee business • Review and editing of revised merged report • Production of report • Release of report