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Impact of the Affordable Care Act in Missouri and Economic UPDATE ADA SAC August 1, 2012

Impact of the Affordable Care Act in Missouri and Economic UPDATE ADA SAC August 1, 2012. Steve Reeves Dep Director, Divisions of CPS and AD A. The Supreme Court Ruling on the Affordable Care Act (ACA). Individual Insurance Mandate Stands Health Insurance Subsidies and Tax Credits Stand

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Impact of the Affordable Care Act in Missouri and Economic UPDATE ADA SAC August 1, 2012

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  1. Impact of the Affordable Care Act in Missouri and Economic UPDATEADA SACAugust 1, 2012 Steve Reeves Dep Director, Divisions of CPS and ADA

  2. The Supreme Court Ruling on the Affordable Care Act (ACA) • Individual Insurance Mandate Stands • Health Insurance Subsidies and Tax Credits Stand • Federal Grants to Establish Insurance Exchanges Stand • Private Market Rules (e.g., Guaranteed Issue) Stand • Delivery System Reform Demonstrations Stand • Limits on Remedy for Medicaid Expansion • The Bottom Line: -- The ACA is Upheld (Mostly). -- Decision Time for the States.

  3. Medicaid Ruling • States may opt out of Medicaid expansion without a penalty. • Fear of future state economic burden and uncertainty about the outcome of the November presidential election will hold some states back. • Pressure from stakeholders (including hospitals) will push the other direction. • Places governors and state legislatures in a difficult political and economic predicament.

  4. Provider Funding Concerns • Hospitals and other providers expressing major concern about financing for care in states that do not opt into the Medicaid Expansion. • Deep cuts to Disproportionate Share Hospital (DSH) payments in the ACA. -- Assumption was that states would be required to expand Medicaid leading to fewer uninsured. -- Cuts scheduled to begin in FY 2014. • The Catch: In states that do not opt for Medicaid expansion, uncompensated care remains, but with dramatically reduced federal funding. Worst of all worlds for hospitals.

  5. The Million(s) Dollar Question: Will States Expand Medicaid Even Without the Stick? YearFMAP for Newly Eligible Parents Childless Adults, Others • 2014 100% • 2015 100% • 2016 100% • 2017 95% • 2018 94% • 2019 93% • 2020 & beyond 90%

  6. What Does ACA Mean for Behavioral Health? • Recognizes that BH is essential to overall health. • MH/SA services are part of the EHB package at parity with other services. • Forbids the exclusion of people with pre-existing illness from medical coverage. • Removes stingy annual and lifetime caps on coverage for MH/SA services, higher deductibles--or simply no coverage at all.

  7. What Does ACA Mean for Behavioral Health?

  8. What Does ACA Mean for Behavioral Health?

  9. What Does ACA Mean for Behavioral Health? • Est. 410,000 new Medicaid enrollees in MO • 7% with SMI = 28,700 • 14.9% with psychological distress = 61,090 • 14.2% with SUD = 58,220

  10. Nationwide Political Pressures • Statewide BH advocacy groups/associations and medical interests will lobby hard for Medicaid expansion and protection from uncompensated care. • Hospital associations may lobby even harder. • Managed care organizations will recognize the potential for growth in Medicaid managed care. • Chambers of Commerce will recognize that billions of federal dollars could flow into their states. As Medicaid expands so do healthcare sector jobs, lab services, imaging, transportation, food services, property tax revenues and many other economic indicators. • Depending on the state, public citizen groups that lobby at the grass-roots level for Medicaid expansion will become more energized and organized during elections. --Source: NASMHPD, 2012

  11. More Good News: “The Fiscal Cliff” • Bush tax cuts expire on January 1. • The temporary fix to the alternative minimum tax (AMT) expires at year-end. • The 2% payroll tax holiday is set to expire at year-end. • The temporary fix to the Medicare physician sustainable growth rate (SGR) formula expires at year-end--without a fix, docs are up for about a 30% cut in their Medicare fees on January 1. • Sequestration is scheduled to begin January 1, which could mean a $46 million cut (nearly 10%) to the mental health Block Grant. • Global economy is in jeopardy.

  12. The Future • Continued tough economy • Healthcare reform one way or another • Workforce challenges--including within DMH • Things will never, ever slow down • Will the political process get better or worse?

  13. The Future • A Few DMH Strategic Priorities: • Employment for people with SMI • Continued movement of people with SMI out of institutions and into integrated community settings • Improved access to MH/SUD community services • Collaboration with emergency rooms and law enforcement for early intervention and diversion • Better health outcomes for people with SMI (health homes, tobacco cessation, etc.)

  14. The Future: Two Outs and Three Ins • We want the people we serve to be-- • OUT of restrictive, congregate settings—jails, prisons, and state hospitals • IN stable housing • IN good jobs • IN good health • OUT of risk for bigger problems through prevention and early intervention

  15. The Future • Continued consolidation of the CPS and ADA divisions within the Department of Mental Health (“Name That Division”) Thank You! steve.reeves@dmh.mo.gov

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