Changing Demographics and Funding Trends

Leadership Institute June 25, 2012 Nancy Thaler National Association of State Directors of Developmental Disabilities Services NASDDDS

Aging Baby Boomers Driving Entitlements

2

Baby Boomer Tsunami Every day 10,000 Baby Boomers qualify for Social Security

3

Current Policies Are Not Fiscally Sustainable: Change is Coming No Matter Who Wins the Next Election

3

Ryan Plan

Replaces Medicaid with a block grant

Grows each year with inflation and U.S. population growth but at more than 3.5 percentage points less than current projected annual growth in Medicaid.

States get expansive new flexibility in areas such as eligibility and benefits. States could cap enrollment, charge significant premiums, offer vouchers to purchase private insurance, and cut some currently required services

CBO has estimated that by 2050, combined federal funding for Medicaid, the Children’s Health Insurance Program (CHIP), and federal subsidies provided through ACA would be cut by more than 75 percent

Toomey Plan

Similar block grant structure to Ryan proposal

Reduces Medicaid by about $990 billion over the next ten years — $180 billion more than under the Ryan budget

President’s Proposal

Cuts more than $50 billion from Medicaid

$17 billion over 10 years by establishing a “blended rate” for Medicaid and CHIP in 2017

Blends FMAP, CHIP match, and Medicaid expansion match into one number, and reduces it by as much as 5 percent.

Would increase automatically if an economic downturn forced enrollment to rise and state costs to increase

States Can’t Make UP the Difference

8

Baby Boomers - Not Enough Workers to Take Care of the Baby Boomers

15,000,000

30,000,000

45,000,000

60,000,000

75,000,000

2000 2005 2010 2015 2020 2025 2030

Source: U.S. Census Bureau, Populat ion Division, Interim State Populat ion Project ions, 2005

Females aged 25-44 Individuals 65 and older

Larson, Edelstein, 2006

Confronting Reality

The Waiting List

Growth in public funding will slow

Workforce will not keep pace with demand

People Waiting

For Services

Residential

Capacity

Growth

Needed

155,059 Lakin

240,000 Kaiser 466,809 24.6%

15,000,000

30,000,000

45,000,000

60,000,000

75,000,000

2000 2005 2010 2015 2020 2025 2030

Source: U.S. Census Bureau, Populat ion Division, Interim State Populat ion Project ions, 2005

Females aged 25-44 Individuals 65 and older

State Responses to the Challenge In the worst times, service reductions

When there is time for thought:

1. Focus on rebalancing

2. Focus on sustainability Supporting Families Getting people a job

3. Focus on Equity Individual Budget Allocation

4. Managed care

Rebalancing

Focus on Where the Big Bucks Are

States are Rebalancing

@29,000

2011

Source: UMN RTC/ICI

12 States Have No Public Institutions >16

Closure Date State General

Population

1 1991 New Hampshire 1,315,000

2 1991 District of Columbia 582,000

3 1993 Vermont 624,000

4 1994 Rhode Island 1,068,000

5 1996 Maine 1,322,000

6 1997 Alaska 670,000

7 1997 New Mexico 1,955,000

8 1998 West Virginia 1,818,000

9 1999 Hawaii 1,285,000

10 2009 Oregon 3,641,000

11 2010 Michigan 10,079,985

12 2011 Alabama 4,779,736

UMinn RISP Rpt. 2010

States are Rebalancing

State Popula

tion

1 Texas 4,207 x

2 New Jersey 2,703 x

3 Illinois 2,111 x

4 Calif. 2,070 x

5 New York 1,981

6 North Carolina 1,598

7 Virginia 1,153 x

8 Ohio 1,329 x

9 Mississippi 1,324 DOJ

10 Pennsylvania 1,189

11 Louisiana 1,124 x

12 Arkansas 1,052

State Popul

ation

1 Alaska 173

2 Arizona 115

3 Colorado 67

4. Delaware 70

5 Idaho 62

6 Indiana 192

7 Kentucky 169

8 Maryland 144

9 Minnesota 29

10 Montana 55

11 Nebraska 173

12 Nevada 47

13 North Dakota 115

14 Rhode island 17

15 South Dakota 144

16 Wyoming 83 Source: UMN RTC/ICI

16 States have <200 people in large facilities

12 states have over 1,000 people in large facilities

x downsizing initiatives

UMinn. RISP Rpt. 2010

Thinking for the Long Term About Cost

Sustainability depends on how good we are at supporting families and getting

people jobs.

Highest Cost

Lowest Cost

People with Developmental Disabilities

(1% of the population)

Big House State Op

ICF-MRs

Community

ICF-MRs

HCBS Waivers

Comprehensive &

Specialty Waivers

Supports

Waivers

State Funded

Family Support

Services

DEMAND

Nudging the System

Source: John Agosta

Human Services Research Institute

The idea is to nudge a system down the incline to reduce per person expenditures.

The idea is to nudge a system

to be person-centered, to

support families, and involve

people in their community.

Employment

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Family Home 325,6 355,1 391,8 446,2 482,4 500,0 503,6 533,0 569,0 552,5 588,5 599,1

Own/Host Home 90,79 96,89 110,5 120,9 128,9 136,3 147,0 136,5 139,6 152,6 154,1 162,8

1-6 Community 108,8 114,5 124,4 135,3 135,5 135,5 142,9 156,6 157,0 157,7 160,4 158,6

7+ and Nursing Homes 78,08 78,66 85,01 89,50 88,08 89,35 83,67 83,03 88,75 84,93 79,50 88,05

16 + PRF 52,45 50,03 47,32 45,94 44,06 42,83 41,65 39,09 38,17 36,65 35,03 32,90

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000R

es

ide

nts

wit

h I

DD

Year

Residence of all IDD Service Recipients 1998 to 2009

Sustainability Means Supporting Families

Arizona 86% Calif. 71% Florida 70% Idaho 75% S.C. 72%

Nevada 69% Delaware 68% NJ 68% Wash 67% Louisiana 66% Hawaii 65% Mass. 62% NY 62% West Virg.60%

57.5%

Lakin et.al. RISP 2009 –UMinn.

States are Focusing on Employment

0%

20%

40%

60%

80%

100%

2009 –UMass Boston ICI ID/DD Agency Survey

Success in employment varies widely 2009

Washington State (88 %)

Oklahoma (60%)

Connecticut (54%)

Louisiana (47%)

New Hampshire (46%)

Sustainability depends on how good we are at supporting families and getting

people jobs.

Individual Resource

Allocation

Searching for Equity and Fairness - Individual Allocations with Consumer-Directed Options

Individual Resource Allocation Equity and Fairness Predictable costs

Consumer-Directed Services Hire and Fire Staff Hire relatives Control a budget

Thirteen states offered individual budgets and consumer control statewide for at least some individuals in Jan. 2009

Colorado** R.I.

Oregon** New Mexico

LA.** North Dakota

Georgia** Maine

Conn.** N.C.

Wyoming** Virginia

NJ** Maryland

Arkansas** DC

Indiana** New York*

Florida

Mississippi

Managed Care

Managed Health Care Brings Opportunities

Opportunities:

Reduce reliance on facility based services

Integration with medical, behavioral and long term care services and supports

Control costs

Address the waiting list

Innovation

Better transitions in ages and stages

Medicaid Managed Long Term Care -does not include all the states that have acute managed care

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Arizona -1115 Michigan-B/C counties Vermont-1115 Wisconsin-B/C counties Texas Star Plus-B/C North Carolina - B/C counties New York-1115 New Hampshire

Kansas ?

Kentucky ?

Illinois -1115 delayed

New Jersey -1115 delayed

Managed Care for the Duals

Dual Eligibles

Individuals dually eligible for Medicare and Medicaid

The most vulnerable, highest-need, and highest cost beneficiaries in the US health care system

Dual eligible beneficiaries account for

21% of Medicare enrollees but 36 percent of the expenditures

15% of Medicaid enrollees but 40% of the expenditures

(Kaiser Foundation)

Dual Eligibles as a Percent of Medicare and Medicaid Enrollment and Spending, 2006/2007

Medicare Medicaid

People People Cost Cost

State Demonstrations to Integrate Care for Dual Eligible Individuals

Test different delivery system and payment models that integrate care for dual eligibles

15 states received $1 million contracts to design new systems but 20 + additional states expressed interest

State proposals must cover the full range of health care services, the entire dual eligible population, and are administered statewide

The state can propose a new model, expand existing pilots, or a combination of both

Demonstration Requirements

Funding models

Capitated Model: A State, CMS, and a health plan enter into a three-way contract that will provide a new savings opportunity for both States and the Federal government.”

Managed Fee-for-Service Model: A State and CMS enter into an agreement by which the State would be eligible to benefit from savings

*Map Courtesy of National Senior Citizens Law Center

• Green-15 State Demo • Maroon – Financial Alignment

State Expressed Initial Interest in Dual Eligibles Integration Models

The Dual Eligibles in Managed Care

Medicare Eligibles

Developmental

Disabilities

Medicaid

Eligibles

State Responses to the Challenge

1. Focus on rebalancing – reducing reliance on facility based programs

2. Focus on sustainability Supporting Families Getting people a job

3. Focus on Equity Individual Budget Allocation

4. Managed care

What Does it Mean to Focus on Families as Our Core Service?

Can we reach out rather than wait for crisis?

Can we start early and continue on the journey

rather than try to make a life plan?

Do support coordinators have the skills?

Do we know how to help them navigate the world beyond the public system?

Do support agencies have the skills?

Do we know what families need?

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Does Everyone Have to Live with Their Family to Have a Sustainable System?

No. It means we have to maximize the extent to which as many people as possible can live great lives without 24 hours of paid supports using RELATIONSHIP BASED OPTIONS

Family

Extended Family

Friends

Shared Living

Independently or with a friend

Paid Companion

Nuclear Family

Aunts &

Uncles

Siblings

Cousins

Shared Living

It doesn’t matter with whom people live, the supports should match what they need so that…………………………...

Own Home/ Roommate/ Companion

$ Job And a

Does Everyone Have to Live with Their Family to Have a Sustainable System?

37

Nancy Thaler

National Association of State Directors of Developmental Disabilities Services

113 Oronoco Street Alexandria, VA 22314

703-683-4202 nthaler@nasddds.org