Medicaid Expansion Estimates Demographics and Cost

1. Medicaid Expansion EstimatesDemographics and Cost April 24, 2013

2. Medicaid Expansion - Eligibles • Medicaid expansion under the ACA allows states to cover individuals up to 138% FPL • Household of 1 - $15,856 per year • Household of 4 - $32,499 per year (2013 FPL guidelines) • Estimate 48,564 additional people would be eligible for Medicaid if the state expands to 138%FPL • Per ACA individuals between 100% - 138% FPL can access tax subsidies to purchase insurance through the exchange • Approximately 22,000 individuals

3. The Uninsured in South Dakota • To understand the Medicaid eligibles one needs to have an understanding of the uninsured • In 2011, 71,204 (8.8%) of South Dakotans were uninsured • • Overall, the uninsured are young • • over half (56%) is between the ages of 18 and 34 • • 29% between the ages of 18 and 24 • • 27% between the ages of 25 and 34 • • 61% of the uninsured up to 138% Federal Poverty Level (FPL) are between the ages of 18 and 34 • • Among adults aged 18 to 64, 53% are male and 47% female

4. The Uninsured in South Dakota Information taken from Market Decisions Report – 2011 South Dakota Health Insurance Survey.

5. The Uninsured in South Dakota • As a group, the uninsured are poorer, and more live in poorer families • • 41% of adults aged 18 to 64 are in families whose income was less than 100% FPL (based on 2011 FPL data family of one - $10,890; family of four - $22,350- ) • • 25% of adults aged 18 to 64 live in families whose annual income is between 100% and 199% FPL • • Only 4% of adults in families earning 300% of FPL or greater were uninsured

6. The Uninsured in South Dakota Information taken from Market Decisions Report – 2011 South Dakota Health Insurance Survey.

7. The Uninsured in South Dakota • There are geographic differences among the uninsured • • Nearly six in ten uninsured adults aged 18 - 64 reside either in the West Region (30%) or the Southeast Region (27%). • • 15% of adults reside in American Indian counties • • 69% of uninsured adults are white while 27% are Native American • • 17,598 Native American adults aged 18 – 64 do not have heath insurance, but 80% (14,086) have health care coverage through Indian Health Services

8. The Uninsured in South Dakota • Information taken from Market Decisions Report – 2011 South • Dakota Health Insurance Survey.

9. The Uninsured in South Dakota • 10% of working adults aged 18 to 64 were without health insurance compared to 23% of adults aged 18 to 64 that are currently not working • • 63% of uninsured adults are employed; nearly two-thirds (65%) of uninsured adults are employed full time • • 20% work for themselves while 21% work for an employer between two and nine employees • • 60% work for a private company while 31% are self-employed or work for a family business or farm

10. Medicaid Expansion - Eligibles • Who are the new eligibles? • Adults • Without disabilities; • Single or • Parents between 49%-138% FPL

11. Medicaid Expansion - Eligibles

12. Medicaid Expansion - Services • Expansion population must be provided “Essential Health Benefits” (EHB) per the ACA • 1. Ambulatory Patient Services • 2. Emergency Services • 3. Hospitalization • 4. Maternity and Newborn Care • 5. Mental Health and Substance Use Disorder Services • 6. Prescription Drugs • 7. Rehabilitative and Habilitative Services & Devices • 8. Laboratory Services • 9. Preventive and Wellness Services and Chronic Disease • Management • 10. Pediatric services, including oral and vision care • Most EHB already covered by Medicaid • Would have to add substance use disorder services for adults

13. Medicaid Expansion - Costs • Federal government will pay an enhanced share for services to the expansion group • FMAP for services to expansion group by calendar year is • 2014-2016 100% • 2017 95% • 2018 94% • 2019 93% • 2020 90% • Administrative costs continue at current match rate- 50%

14. Medicaid Expansion - Costs • Assumptions: • Cost estimates for the expansion population based on the only current coverage group for non-disabled or non-pregnant adults • Low Income Families with children • Growth rates - cost • 5% per year - benefit costs and administrative costs • Growth rates - eligibles • Take up rates 40% SFY14, 90% SFY15, 100% SFY16 • 1% per year SFY17-SFY20 • Same services would be provided for existing population • Cost estimates are gross costs

15. Medicaid Expansion - Costs

16. Medicaid Expansion - Costs • Total annual cost • $59 million FY14 to $409 million FY20 • Total annual administrative cost- $2.4 million to $3.3 million • 39 FTE • Total annual general fund cost • $1.5 million FY14 to $36.8 million FY20

17. Medicaid Expansion - Costs • States that expand Medicaid also expect to see an increase in the number of people currently eligible but that have not yet applied – the “woodwork” effect • Estimates • 5,500 (primarily children) • $2.7 million FY14 to $16.8 million FY20 • No enhanced match rate – regular FMAP applies • Even if the state does not expand Medicaid, there will likely be some “woodwork effect” with outreach surrounding the healthcare exchanges

18. Medicaid Expansion – Costs • Savings Opportunities: • One argument for expansion is an assumption of state savings by shifting state funded programs to Medicaid • Potential savings opportunities • Public Health Programs (Breast and Cervical Cancer, Family Planning/HIV Aids) • State funded high risk pools • Uncompensated Care costs • Behavioral Health Services • Emergency medical/inpatient care for indigent inmates • s

19. Medicaid Expansion – Costs • Unlike other states, South Dakota does not have generally funded programs that could be covered by Medicaid for the expansion population • Public Health Programs (Breast and Cervical Cancer, Family Planning/HIV) • No general funds used to support these programs through Dept. of Health • Medicaid currently provides full coverage for women screened by DOH and found to have Breast and Cervical Cancer

20. Medicaid Expansion – Costs • State subsidized high risk pools • No state subsidized program in South Dakota • Uncompensated Care Costs • Savings potential at the county or provider level. No direct savings to the Medicaid program unless there is a agreement to shift savings to the state. • Behavioral Health Services • Unlike many other states, South Dakota does not currently expend 100% general funds for Behavioral Health services except those required for Maintenance of Effort for Mental Health and Substance Abuse block grants. • Criminal Justice Initiative – potential opportunity

21. Medicaid Expansion – Costs • Emergency Medical Care for Indigent Inmates: • Inmates who meet all other Medicaid requirements are eligible for Medicaid while incarcerated. However there is a prohibition from using federal funds for otherwise eligible inmates unless in a medical institution for 24 hours (hospitalized) • Currently pregnant women who are inmates and otherwise eligible for Medicaid most commonly covered expenses • Potential savings opportunity in this area • $859,000 general funds phasing down to $773,100 annually after 2020 • y to

22. Medicaid Expansion – Costs • Final Rule published March 29, 2013 outlines methodology to determine “newly eligible” for the purposes of claiming enhanced FMAP. • Need further study to assess any state savings opportunities with this new guidance

23. Thank You!