Understanding Medicaid: A Comprehensive Overview

1. Medicaid 101 Joan Alker Executive Director Center for Children and Families

2. Medicaid is a Federal-State Program • State participation is voluntary; all states have been in since 1982 • States get federal matching funds for the costs of the program (61-62% on average, per CBO April 2018) • States run the program day-to-day within federal rules but have lots of discretion • “If you’ve seen one Medicaid program, you’ve seen one Medicaid program”

3. Medicaid: Federal-State Partnership

4. Medicaid is the Nation’s 2nd Largest Health Care Program • This year, Medicaid is projected to cover 75 million Americans at a cost of about $400 billion to the federal government and $245 billion to the states (CBO April 2018) • 33 million children • 27 million parents and other adults • 9 million individuals with disabilities • 7 million seniors

5. Seven in Ten Americans Say They Have Ever Had a Connection to Medicaid Source: Kaiser Family Foundation Health Tracking Poll (conducted February 15-20, 2018).

6. Medicaid’s Role for Selected Populations Sources: Kaiser Commission on Medicaid and the Uninsured (KCMU) analysis of 2016 CPS/ASEC Supplement; Birth data - Kaiser Family Foundation Medicaid Budget Survey, 2016 (median rate shown); Medicare data - Medicare Payment Advisory Commission, Data Book: Beneficiaries Dually Eligible for Medicare and Medicaid (January 2016), 2011 data; Disabilities - KCMU Analysis of 2015 NHIS data; Nonelderly with HIV - 2009 CDC MMP; Nursing Home Residents - 2012 OSCAR data.

7. Majority of the Public Holds Favorable Views of Medicaid Note: Don’t know/Refused responses not shown Source: Kaiser Family Foundation Health Tracking Poll (conducted February 15-20, 2018

8. Medicaid Covers a Population with High Rates of Disease and Disability Source: Kaiser Family Foundation analysis of 2015 NHIS data.

9. Income Eligibility Levels for Children in Medicaid/CHIP, January 2019 Source: Based on results from a national survey conducted by the Kaiser Family Foundation and the Georgetown University Center for Children and Families, 2019

10. Current Status of State Medicaid Expansion Decisions Source: Kaiser Family Foundation.

11. There is a Coverage Gap in States that Have Not Expanded Medicaid

12. Medicaid is the Primary Payer for Long-Term Services and Supports Source: Kaiser Family Foundation estimates based on 2015 National Health Expenditure Accounts data from CMS, Office of the Actuary.

13. The 65 and Over Population Will More than Double, the 85 and Over Population Will More than Triple by 2050 Source: A. Houser, W. Fox-Grage, and K. Ujvari. “Across the States 2013: Profiles of Long-Term Services and Supports” (Washington: AARP Public Policy Institute, September 2012).

14. Distribution of Medicaid Spending by Eligibility Group, FY 2014 Source: KFF estimates based on analysis of data from the FFY 2014 Medicaid Statistical Information System (MSIS) and CMS-64 reports. Because FFY 2014 data was missing for some or all quarters for some states, data was adjusted using secondary data to represent a full fiscal year of enrollment.

15. Medicaid is Both a Spending Item and a Federal Revenue Source for States Source: Kaiser Program on Medicaid and the Uninsured estimates based on the NASBO’s November 2016 State Expenditure Report (data for Actual FY 2015).

16. CHIP: Background • Enacted in 1997 to encourage states to expand coverage to uninsured children • Reauthorized in 2009 - 2013 (CHIPRA) with additional state options • Funding extension through 2015 (ACA) with additional federal match (23 percentage point bump) and requirement to maintain eligibility (MOE) • Funding extended through 2017 (MACRA) but reduced state ability to carry over more than 2/3’s of unspent allotment • Block grant with capped annual allotments • No entitlement to coverage

17. Children

18. Nation’s Progress on Children’s HealthCoverage Reverses Course Source: J. Alker and O. Pham, “Nation’s Progress on Children’s Coverage Reverses Course” (Washington: Georgetown University Center for Children and Families, November 2018), available at https://ccf.georgetown.edu/2018/11/21/nations-progress-on-childrens-health-coverage-reverses-course/. * Change is significant at the 90% confidence level

19. State Options for CHIP Program Design • Separate CHIP program • Choice of Benchmark Plan: • State employee plan • Federal employee plan • Largest HMO in state • Secretary approved • Medicaid • Expansion • All Medicaid rules apply except children must be uninsured • States can use Medicaid funds to cover children with other coverage • Combination Program • Medicaid expansion for certain children based on age or income • Separate CHIP program for other children

20. What is Section 1115? • Reference to the Social Security Act – applies to Medicaid and CHIP. • Gives Secretary of HHS broad authority to allow states to implement “experimental, pilot or demonstration projects” that promote the objectives of the program. • Permit states to use federal program funds in ways not otherwise permitted. • i.e. populations or services not otherwise allowed. • Certain Medicaid requirements (but not all) may be waived if in the Secretary’s judgment they meet the above criteria. • Other waivers exist in Medicaid - 1915 b and c.

21. Want to Learn More? • Visit our website ccf.georgetown.edu and sign up for our newsletter! • Twitter: @GeorgetownCCF • Facebook: Georgetown University Center for Children and Families • Center for Children and Families, State Health Care Coverage Facts, https://ccf.georgetown.edu/state-childrens-health-facts/

22. Fundamentals of Medicaid National Coalition on Health Care MaryBeth Musumeci Associate Director Program on Medicaid and the Uninsured

23. Overview • Affordable Care Act Medicaid expansion after NFIB v. Sebelius • Section 1115 waivers • Work/reporting requirements • Premiums/other eligibility and enrollment restrictions • “Partial expansion” with enhanced federal matching funds • Behavioral health/institution for mental disease payment

24. There is a coverage gap for adults in states that do not adopt the ACA’s Medicaid expansion. Limited to Specific Low-Income Groups 0% FPL Childless Adults 43% FPL $8,935 for Parents in a Family of Three 100% FPL $12,140 for an Individual 400% FPL $48,560 for an Individual Median Medicaid Eligibility Limits as of January 2018

25. 37 states (including DC) have adopted the Medicaid expansion. ME VT WA NH MT ND MN OR MA NY WI SD ID ◊ MI RI CT WY PA NJ IA NE ◊ OH DE IN IL NV MD CO UT ◊ WV VA CA DC KS MO KY NC TN AZ SC OK AR NM GA AL MS LA TX AK FL HI Adopted (37 States including DC) Not Adopting At This Time (14 States) NOTES: Current status for each state is based on KFF tracking and analysis of state activity. ◊Expansion is adopted but not yet implemented in ID, NE, and UT. (See link below for additional state-specific notes). SOURCE: “Status of State Action on the Medicaid Expansion Decision,” KFF State Health Facts, updated April 9, 2019. https://www.kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/

26. Evidence from over 200 studies suggests that the Medicaid expansion has positive effects for beneficiaries and states. Reduction in the Number of Uninsured Increased Access to Care and Service Utilization ↑ Affordability and Financial Security + Federal + State Funds Increased Economic Activity ↑ General fund revenue and GDP ↑ or neutral effects on employment Increased State Savings ↓ Uncompensated care costs ↓ State-funded health programs (e.g. behavioral health and corrections) SOURCE: L. Antonisse, R. Garfield, R. Rudowitz, and S. Artiga, The Effects of Medicaid Expansion under the ACA: Updated Findings from a Literature Review (Washington, DC: Kaiser Family Foundation, March 2018), https://www.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-march-2018/

27. Section 1115 of the Social Security Act authorizes Medicaid waivers. • The HHS Secretary can waive certain Medicaid provisions to implement “experimental, pilot or demonstration projects” that are “likely to assist in promoting the objectives of the Medicaid program” • Budget neutral to the federal government and subject to state and federal public notice and comment periods • The Trump Administration has issued waiver guidance in November 2017 (waiver approval criteria) and January 2018 (work / community engagement) • Each Administration has some discretion over which waivers to approve and encourage; however, that discretion is not unlimited. • DC federal district court invalidated Secretary’s approval of KY and AR waivers in March 2019, citing failure to consider impact on providing affordable coverage. • Litigation ongoing challenging NH waiver • Other provisions not approved to date include partial expansion (MA and AR); closed formulary (MA); time limit on coverage (KS) • Secretary has not yet acted on work requirement waiver requests in non-expansion states

28. There are 47 approved Section 1115 demonstration waivers in 39 states as of April 1, 2019. NOTES: Some states have multiple approved and/or multiple pending waivers, and many waivers are comprehensive and may fall into a few different areas. Therefore, the total number of pending or approved waivers across states cannot be calculated by summing counts of waivers in each category. Pending waiver applications are not included here until they are officially accepted by CMS and posted on Medicaid.gov. For more detailed information on each Section 1115 waiver, download the detailed approved and pending waiver tables posted on the tracker page. “MLTSS” = Managed long-term services and supports.

29. 7 states have approved Medicaid work requirement waivers, as of April 1, 2019. ME VT WA NH MT ND MN OR MA NY WI SD ID MI RI CT WY PA NJ IA NE OH DE IN IL NV MD CO UT WV VA CA DC KS MO KY NC TN AZ SC OK AR NM GA AL MS LA TX AK FL HI Approved (7 states) Pending (6 states) Set aside by court (2 states) N/A (36 states) NOTES: Pending waivers include new applications, amendments to existing waivers, and renewal/extension requests. Pending waiver applications are not included in this tracker until they are officially accepted by CMS and posted on Medicaid.gov. SOURCE: KFF, Medicaid Waiver Tracker (April 1, 2019).

30. The large majority of Medicaid adults are working or face barriers to work. Total = 23.5 million Non-SSI, Non-Dual Eligible, Nonelderly Medicaid Adults NOTES: “Not Working for Other Reason” includes retired, could not find work, or other reason. Working Full-Time is based on total number of hours worked per week (at least 35 hours). Full-time workers may be simultaneously working more than one job. SOURCE: Kaiser Family Foundation analysis of March 2017 Current Population Survey.

31. Occupations with the largest number of workers covered by Medicaidare low paying jobs without benefits. SOURCE: Kaiser Family Foundation analysis of 2016 American Community Survey.

32. Complex policies in recent waivers run counter to simplified ACA eligibility and enrollment rules. Pre-ACA Post-ACA Future? Apply in person Multiple options to apply More documentation (e.g. work) Paperwork and asset test requirements Electronic verification and no asset tests Premiums Frequent reporting and documentation Wait for eligibility determination Real-time determination Frequent renewals requiring paperwork and documentation Annual automated renewals Lock-out periods SOURCE: KFF, Implications of Emerging Waivers on Streamlined Medicaid Eligibility and Renewal Processes (Feb. 2018).

33. Most Medicaid adults could lose coverage under work requirements due to problems with reporting. Low (5%) Low (25%) Low (5%) High (50%) High (15%) Low (25%) High (15%) High (50%) Assumed Disenrollment Rate: Already Working or Exempt Subject to Work Requirement Total Number Losing Coverage 1.4 M 1.7 M 3.7 M 4.0 M NOTE: Components may not sum to totals due to rounding. SOURCE: KFF, Implications of a Medicaid Work Requirement: National Estimates of Potential Coverage Losses (June 2018).

34. 11% of enrollees who lost coverage in 2018 due to work and reporting requirements have regained coverage in 2019. Total enrollees who lost coverage in 2018 due to work and reporting requirements = 18,164 89% of enrollees who lost coverage in 2018 remain unenrolled in 2019. NOTE: *Of the 1,910 enrollees who regained coverage in 2019, 1,889 did so through AR Works, and 21 did so through other pathways. SOURCE: Ark. Dep’t of Human Services, Feb. 2019 Report(data as of March 7, released on March 15, 2019).

35. AR Works enrollees face multiple barriers to work and monthly reporting. SOURCE: Medicaid Work Requirements in Arkansas: Experience and Perspectives of Enrollees, Kaiser Family Foundation, December 2018. https://www.kff.org/medicaid/issue-brief/medicaid-work-requirements-in-arkansas-experience-and-perspectives-of-enrollees/

36. CMS has approved waiver provisions to impose other eligibility and enrollment restrictions. • Premiums / monthly contributions (approved AR, AZ, IA, IN, MI, MT, NM, WI, pending VA, set aside by court KY) • Waivers of reasonable promptness (so coverage is not effective until first premium are paid instead of date of eligibility determination) (approved IN, NM, pending VA, set aside by court KY) • Waivers of retroactive eligibility (approved AZ, FL, IA, IN, NH, NM, UT, set aside by court AR, KY) • Coverage lock-outs (approved IN, MI, MT, NM, WI, pending VA, set aside by court KY) • Mandatory health risk assessments (approved MI, WI) • Enrollment cap (approved UT)

37. Research shows negative effects of premiums and cost-sharing policies for low-income populations. • Decreased enrollment and coverage renewals • Largest effects on those with lowest income • Many become uninsured and face increased barriers to care and financial burdens New/increased cost-sharing New/increased premiums • Even small levels ($1-$5) decrease use of needed services • Increased use of more expensive services (e.g., ER) • Negative effects on health outcomes • Increased financial burdens for families Rx • States savings are limited • Offset by disenrollment, increased costs in other areas, and administrative expenses SOURCE: Kaiser Family Foundation, The Effects of Premiums and Cost Sharing on Low-Income Populations: Updated Review of Research Findings, (June 2017).

38. Data from Indiana show confusion about the payment process was the second top reason for failure to pay premiums. 59% of Never Members surveyed as of Nov. 2016 were uninsured NOTES: Weighted percentages reported. “Confusion about payment process” includes unsure how much to pay, when to pay, where to pay. “Another reason” includes got insurance from another source, income increase resulted in ineligibility, some other reason, moved out of state, became eligible for Medicare or another Medicaid coverage group, did not want HIP coverage, don’t know. Survey data from individuals disenrolled or not enrolled as of Nov. 2016. SOURCE: Lewin, Healthy Indiana Plan 2.0: POWER Account Contribution Assessment, Leaver and Never Member Survey data for Dec. 2016-Jan. 2017 (March 31, 2017).

39. Utah is moving ahead with a more limited Medicaid expansion compared to the voter approved ballot initiative. • Utah voters approved a full expansion to 138% FPL • The ballot had an April 1, 2019 implementation date, and a sales tax increase to fund the state’s share of expansion costs.  • Legislation was enacted to significantly change and limit the expansion as passed by the voters through a series of waivers. • CMS approved a Section 1115 waiver in Utah to: • Expand Medicaid to adults with incomes up to 100% FPL beginning on April 1, 2019 using the state’s regular Medicaid match rate • Impose an enrollment cap if costs exceed state appropriations • Impose a work requirement • The state plans to submit subsequent waiver proposals to receive the 90/10 ACA enhanced match for coverage up to 100% FPL (partial expansion) with an enrollment cap and per capita cap limit on federal financing • If the other plans are not approved by July 1, 2020, the state will adopt the full Medicaid expansion

40. What are the implications of “partial” expansion waivers? SOURCE: “Partial Medicaid Expansion” with ACA Enhanced Matching Funds: Implications for Financing and Coverage. https://www.kff.org/medicaid/issue-brief/partial-medicaid-expansion-with-aca-enhanced-matching-funds-implications-for-financing-and-coverage/. February 2019. To date, CMS has allowed states to receive the ACA enhanced Medicaid matching funds only if the entire expansion group is covered • CMS has not approved waiver requests for partial expansion with enhanced matching funds in AR or MA Partial expansion could result in less coverage overall • Fewer in the 100-138% FPL range are likely to enroll in coverage due to higher out of pocket costs and fewer benefits relative to full expansion Partial expansion could result in higher federal costs compared to full expansion • State and federal spending for Medicaid would be lower and Marketplace spending could be higher (federal government pays full costs of subsidies in the Marketplace) States will be watching for developments in Utah as well as additional guidance from CMS, particularly related to how partial expansion may be tied to broader aggregate financing caps in Medicaid

41. Over half of states have an approved or pending Section 1115 Medicaid IMD payment waiver. ME VT* WA NH MT ND MN OR MA NY WI SD ID MI RI CT WY PA NJ IA NE OH DE IN IL NV MD CO UT WV VA CA DC KS MO KY NC TN AZ SC OK AR NM GA AL MS LA TX AK FL HI Approved IMD waiver (21 states) Pending IMD waiver (6 states) No IMD waiver (23 states + DC) NOTES: IMD = institution for mental disease. *Approved or pending waiver authority includes IMD payment for both substance use disorder (SUD) and mental health services; other states have authority for SUD services only. SOURCE: KFF, Medicaid Waiver Tracker: Approved and Pending Section 1115 Waivers by State (April 1, 2019).

42. CMS’s Section 1115 IMD waiver guidance has evolved over time. SOURCE: CMS, SMD #15-003, New Service Delivery Opportunities for Individuals with a Substance Use Disorder (July 27, 2015); CMS, SMD #17-003, Strategies to Address the Opioid Epidemic (Nov. 1, 2017); CMS, SMD #18-011, Opportunities to Design Innovative Service Delivery Systems for Adults with a Serious Mental Illness or Children with a Serious Emotional Disturbance (Nov. 13, 2018).

43. Key Questions Looking Ahead: • What will happen with Medicaid work requirement waivers? • What will the rulings in pending litigation in KY and AR mean for other states seeking or with approved waivers for work requirements? • Will non-expansion states be granted waivers to impose work requirements on traditional populations? • What effect will new these policies have on enrollment and coverage? Do those who lose coverage understand the new requirements? What are the barriers to compliance? • More broadly, what is the effect of coverage loss from waiver provisions on enrollees, providers and plans? • Will CMS approve waivers for partial expansion or Medicaid block grants? • What will we learn about administrative costs (to states and plans) to implement complex requirements? • Will waiver evaluations be timely and adequate? What data and reporting will be available prior to the completion of formal evaluations?