*PRELIMINARY Estimates*2 Sept 2010 Page 1MAFA

Federal Health Reform in AlaskaPreliminary Considerations for

Providers

Prepared for: Federal Health Care Forum

Sponsored by: Rasmuson Foundation/Providence

UAA Student Union BuildingBy: Mark A. Foster, MAFA

September 2, 2010

*PRELIMINARY Estimates*2 Sept 2010 Page 2MAFA

Caveats/Limitations of Preliminary Analysis• The analysis presented here have been independently developed and does not

necessarily reflect the view of any MAFA clients or the sponsors of the forum. Mark Foster is the sole author of this analysis and remains responsible for any errors. Please send any questions, comments or concerns to mafa@alaska.net

• These are preliminary *reconnaissance-level* estimates based on readily available public data and analysis, including the Center for Medicare/Medicaid Services (CMS) Office of the Actuary, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) and cross checked against other public estimates, e.g., RAND that have been scaled to Alaska and adjusted to reflect Alaska market considerations.

• The federal health reform package involves a large change in health insurance and health care sectors over the course of the next decade. These preliminary estimates of impacts on Alaska contain significant uncertainty, but nonetheless reflect current best reconnaissance-level estimates for magnitude and direction of the economic impact of reform for Alaska.

• Mr. Foster would like to express his appreciation to ISER (Heather Hudson, Rosyland Frazier, Scott Goldsmith, Linda Leask, Matt Berman, Steve Colt, Stephanie Martin) for their support of health policy research in Alaska and to the sponsors of today’s forum (Rasmuson Foundation, Providence) for supporting public discussions of health care issues in Alaska.

*PRELIMINARY Estimates*2 Sept 2010 Page 3MAFA

Overview

• Changes in Health Coverage - Alaska• Change in Overall Health Care Spending in

Alaska• Demographic Trend Considerations• Changes in Medicare Spending• Challenges for Alaska Providers

*PRELIMINARY Estimates*2 Sept 2010 Page 4MAFA

Preliminary Estimate of Coverage Changes - AlaskaAlaska - Changes in Sources of Coverage

(2019)

-80

-60

-40

-20

0

20

40

60

80

Medicaid EmployerCoverage

OtherPrivate

Exchanges Uninsured

Th

ou

san

ds

*PRELIMINARY Estimates*2 Sept 2010 Page 5MAFA

Factors Contributing to the Net Increase in Health Expenditures in Alaska under Federal Reform

Factors Contributing to Federal Health Reform Related Change in Alaska Health Care Expenditures, 2019

MAFA Preliminary Estimate

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Ne

t C

ha

ng

e in

Sp

en

din

g f

or

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alth

Se

rvic

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Ch

an

ge

in u

tiliz

atio

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r n

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ly in

sure

d

Ch

an

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in u

tiliz

atio

nd

ue

to

imp

rove

dco

vera

ge

Ch

an

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in u

tiliz

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to

exc

ise

ta

xes

Insu

ran

ce &

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vid

er

dis

cou

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imp

ose

d/n

eg

otia

ted

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t M

ed

ica

reS

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s

Pc

t o

f A

las

ka

He

alt

h C

are

Ex

pe

nd

itu

res

= + + + +

*PRELIMINARY Estimates*2 Sept 2010 Page 6MAFA

Change in Alaska Population By Age Group (2010-2020)

*PRELIMINARY Estimates*2 Sept 2010 Page 7MAFA

Changes in Medicare Payments in Alaska (2019)

*PRELIMINARY Estimates*2 Sept 2010 Page 8MAFA

Reductions in Payments for Medicare in Alaska, 2019

not SGR related

*PRELIMINARY Estimates*2 Sept 2010 Page 9MAFA

Challenges for Alaska Providers• Whether/how to attract/retain people (and invest in

associated support facilities) to serve the increased demand from newly insured slated to ramp up in 2014

• How to manage the “queue” of existing and newly insured patients and associated referrals

• How to estimate and manage revenue and contribution margin by payer (Employer-Sponsored Health Insurance, Medicaid, TRICARE, New Exchanges, Medicare)

• How to assess the implications of the increase in the proportion of health care funded by federal sources (Medicaid, Exchange subsidies)