Florida's Medicaid Choice: Looking at Implications Jack Hoadley, Ph.D. Georgetown University Health...
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![Page 1: Florida's Medicaid Choice: Looking at Implications Jack Hoadley, Ph.D. Georgetown University Health Policy Institute Medicaid Expansion Forum January 28,](https://reader035.fdocuments.in/reader035/viewer/2022062314/56649e195503460f94b0550f/html5/thumbnails/1.jpg)
Florida's Medicaid Choice:
Looking at Implications
Jack Hoadley, Ph.D.Georgetown University Health Policy Institute
Medicaid Expansion ForumJanuary 28, 2013
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Acknowledgments
o Project support:o Jessie Ball duPont FundoWinter Park Health Foundation
o Co-investigator:o Joan Alker, Georgetown University
o Travel support:oHealth Foundation of South Florida
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Quick review of ACA structure
o Two principal means to achieve near universal coverageo Federal premium tax credits from 100%
to 400% FPL (~ $19K-$76K, family of 3) to be used in state or federal exchangeoCBO estimate: 20-25 million persons
coveredoMedicaid expansion to 133% FPL (~
$25K) for parents and childless adultsoCBO estimate: 16-17 million persons
covered
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Florida Medicaid eligibility levels
New ACA Level133%
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What did the Supreme Court say?
o The entire law was upheld with one exception – the mandatory nature of the Medicaid expansion
o Court’s language was clear that existing Medicaid was not touched – the decision only touched the “newly eligible” group
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What does the Supreme Court decision mean?
o Other parts of the ACA relating to Medicaid remain intact, including:o “Maintenance of effort,” which prohibits
states from rolling back eligibility for adults until 2014 and children until 2019. o Includes prohibition on proposals to make it
harder for people to enroll, such as premiums or other ways in which a state might add “red tape.”
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What does the Supreme Court decision mean?
o Important outcome: Extension of Medicaid is optional – states must make a choice.
o Federal government has made clear:o State can come in or out at any time simply by
submitting a state plan amendment.o States cannot do partial expansions
o FL legislature has key role to playo States still have option to pursue waivers
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Who will remain uncovered without broader Medicaid
coverage?
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WHAT IS AT STAKE IN FLORIDA’S CHOICE?
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Florida has 8% of U.S. uninsured
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Source: 2011 American Community Survey
Total Population Children Non-elderly Adults0%
5%
10%
15%
20%
25%
30%
35%
21%
12%
30%
15%
8%
18%
Florida U.S.
Rate of uninsured in Florida compared to the United States
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Uninsured children in Florida
Percent of
Uninsured
Children
2011 State Ranking in Percent of Uninsured Children
Number of
Uninsured
Children
2011 State Ranking in Number of Uninsured Children
National 7.5% -- 5,528,000 --
Florida 11.9% #48 475,000 #49
Alabama 5.3% #18 58,000
Georgia 9.5% #43 233,000
Louisiana 5.8% #23 64,000
South Carolina 8.4% #38 90,000
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How many Floridians would gain coverage?
o We estimate that 815,000 to 1,270,000 adults and children would gain coverage if the state extended Medicaid to parents and other adults below 133% FPL.o Estimated: 150,000 to 225,000 in Miami-
Dadeo Participation rates are likely to go up
even without Medicaid extension because of new “culture of coverage”
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Adults newly
eligible for Medicaid
Adults currently
eligible for Medicaid
Children currently
eligible for Medicaid
Total
Total uninsured 1,295,000 257,000 500,000 2,052,000Projected take-up rate (low assumption)
57% 10% 10%
Number projected to gain Medicaid coverage (low assumption)
740,000 25,000 50,000 815,000
Projected take-up rate (high assumption)
75% 40% 40%
Number projected to gain Medicaid coverage (high assumption)
970,000 100,000 200,000 1,270,000
New Medicaid enrollment if changes occur
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Why would children get coverage?
o Coverage is being extended for parents and adults – the “newly eligible”
o But we know that more current eligibles will get enrolled as a result of the “welcome mat” effect. Most of these “eligible but unenrolled” will be children.
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Medicaid coverage saves lives
o Well documented that Medicaid improves access and improves health
o Mortality declined by more than 6% for newly covered adults in Medicaid
o Recent Oregon study found improvement in financial security, health status, access to regular source of care, access to prescription drugs
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WHAT’S AT STAKE FOR FLORIDA’S HOSPITALS?
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Florida’s hospitals at risko ACA: significant cuts to Medicaid and
Medicare Disproportionate Share Hospital (DSH) funding.oDSH programs provide funds to hospitals that
serve many low-income patients and thus provide a high level of uncompensated care.
o ACA assumed much uncompensated care would go away due to increased coverage.oFL: $1.2 billion reduction over 10 years (Urban
Inst.)
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Medicaid DSH cutso Florida: current federal allocation for
Medicaid DSH ~$200 million/yearo Between FY2014-FY2022 national
Medicaid DSH allocations are reduced by up to nearly 50% (especially FY 2018 on).
o Details on implementation forthcomingo DSH reductions are not affected directly
by Court decision - but could be indirectly
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Medicare DSH cutso Medicare DSH: Add-on to Medicare
payments for hospitals treating high share of low-income patients
o ACA: 75% DSH reductions as of FY2014o Some funds shifted to new uncompensated
care pool to pay hospitalsoMedicare savings if uninsured rate declineso Impact on hospitals will vary
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Florida Low Income Pool
o Florida’s Medicaid 1115 five-county waiver includes a fund of $2 billion federal dollars known as the “Low Income Pool” (LIP).
o LIP funds go to providers (mainly hospitals and health centers) serving large numbers of uninsured persons.
o LIP and the waiver due to expire June 30, 2014.
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Florida hospitals in double jeopardy
o Industry estimate: Florida hospitals could face annual cuts of about $650 million
o LIP funding could be reduced or eliminated
o Other possible cuts from Medicare as federal budget negotiations continue
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WHAT’S AT STAKE FOR FLORIDA’S BUDGET?
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Federal financial support
o Generous federal matching funds available for those newly eligible for Medicaid:o 100% federal funding from 2014 to 2016o 95%, 94%, 93% in 2017, 2018, 2019o 90% in 2020 and beyond
o Potential for ~ $26 billion in new federal dollars over 10 years
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Federal financial support
o Normal federal matching funds available for eligible for not enrolledoMedicaid: 58% in FY 2013oCHIP: 71% in FY 2013
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Does everyone eligible enroll?
o Current enrollment rate for children, among those eligibleo FL: 77% oUS: 85%
o Current enrollment for adults, among those eligibleo FL: 45%oUS: 65%
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Projecting new enrollment rates
Newly Eligible Individuals
Currently Eligible but Not Enrolled Individuals
Initial State Assumption
100% 100%
Current State Assumption
80% No official assumption
High Urban Institute Assumption
75% 40%
Low Urban Institute Assumption
57% 10%
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Translating enrollment to costs
o Primary source for cost of Medicaid enrollees:o FL Social Services Estimating Conference
o Important considerationso Overall per-person costs are lower for newly
eligible population (current TANF adults: $333/month
o SSEC Assumption for newly eligible: $306/month
o For eligible but not enrolled: $254/month
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Translating enrollment to costs
o Modifications to Estimating Conferenceo Include assumption for rate of
enrollment for “eligible but not enrolled”oAdd costs to continue some higher
payments to physicians for primary care services
o Include accounting for offsetting savings
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Offsetting savings in estimate
o State support for safety-net institutions (public hospitals, health centers)
o State services for people with mental health issues, substance abuse problems, HIV/AIDS
o Medicaid eligibility changes due to health insurance exchange availabilityoMedically needy populationoOthers (e.g., pregnant women)
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Other potential offsets not modeled
o Some other state-funded serviceso Local government indigent care
fundingo Lower premiums in insurance
exchangeo 15%, based on analysis in other states
o Alternative source of coverage for employees of small firms
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BEST ESTIMATE
NEW STATE COSTS PER YEAR Cost of Medicaid Coverage for Newly Eligible Population
$300 million
Cost of Medicaid Coverage for New Enrollment by Currently Eligible Population
$100 million
Cost of Continuing Higher Primary Care Payment Rates for Physicians
$200 million
TOTAL NEW STATE COSTS PER YEAR $600 millionOFFSETTING STATE SAVINGS PER YEAR State Support for Safety Net Providers $200 millionState Mental Health, Substance Abuse Programs
$250 million
Medicaid Eligibility Changes, e.g., Medically Needy Program
$250 million
TOTAL OFFSETTING STATE SAVINGS PER YEAR
$700 million
NET STATE SAVINGS PER YEAR $100 millionNote: Estimates are based on a single year after 100% federal funding is phased out. New state costs will be lower in earlier years, especially from 2014 through 2016.
Projecting future state costs (2020)
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BEST ESTIMATE
NEW STATE COSTS PER YEAR Cost of Medicaid Coverage for Newly Eligible Population
$0 million
Cost of Medicaid Coverage for New Enrollment by Currently Eligible Population
$100 million
Cost of Continuing Higher Primary Care Payment Rates for Physicians
$0 million
TOTAL NEW STATE COSTS PER YEAR $100 millionOFFSETTING STATE SAVINGS PER YEAR State Support for Safety Net Providers $100 millionState Mental Health, Substance Abuse Programs
$150 million
Medicaid Eligibility Changes, e.g., Medically Needy Program
$150 million
TOTAL OFFSETTING STATE SAVINGS PER YEAR
$400 million
NET STATE SAVINGS PER YEAR $300 million
Projecting future state costs (2014)
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Economic impact studieso Theory: change in federal dollars, e.g.,
new Medicaid matching funds, has direct and indirect effects on local economiesoDirect: payments to providers, planso Indirect (multiplier) effects:
oPurchases from health care and other vendorsoNew employment for health care, other workersoSpending by newly employed personsoAdditional taxes collected
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Economic impact studies: limitations
o Although effects are real, magnitude estimates are highly uncertain
o Many moving parts operating in the health system as a whole
o Impacts may diminish as the economy recovers
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Economic impact
o U of Florida study for FHA: Impact of new federal dollars coming to the state via the ACA on the state economy (using 2020-21 as an example)oNew federal dollars: $2.3 billiono Value added in FL to GDP: $4.2 billiono Labor income: $2.9 billiono Employment: 56,000 jobs
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Bottom line
o Florida incurs few costs for adults newly eligible for Medicaid, slightly higher costs for new enrollment by those already eligible
o But savings due to more coverage should more than offset costs
o New coverage has positive effects for health and quality of life
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For more information
o The Georgetown University project websiteo http://hpi.georgetown.edu/floridamedica
id