Jennifer VermeerIowa Medicaid Director

Iowa Department of Human ServicesNovember 11, 2010

Implementing the Affordable Care Act in Iowa:

Iowa Medicaid Perspectives

Key Impacts for Iowa Medicaid

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Eligibility:Expansion to 133% of the Federal Poverty

Level $14,400 for family of 1 person or $19,400 for family

of 2New income standard “Modified Adjusted

Gross Income”Integration of Medicaid within the Benefits

Exchange / “Eligibility Gateway” / seamlessness

Benchmark benefit plan for new eligiblesOther opportunities

Medicaid in Iowa today

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In FY 2010, Medicaid covered 549,093 Iowans (approximately 18% of Iowans).

Total Expenditures (all funds) were $3.0 billion, State share $719 million.

Paid over 23 million claims in an average of 6.6 days.

Contracts with over 38,000 health providers.

Administrative cost of less than 5%.Per person cost growth flat

Iowa Profile

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Recent expansions for childrenExpansion to 300% FPL in Medicaid and CHIP (hawk-i)Expansion to 300% FPL for pregnant womenEfforts to streamline – ‘express lane’, presumptive

eligibility.Significant growth in Medicaid over past 2

years due to recession (approx. 60,000)70-80% of growth is in number of children

Coverage of adults limited to parents (less than 28% FPL) and disabled (less than 75% FPL), some other small categories.

Medicaid Expansion – 1/1/2014

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The ACA removes the categorical restriction in Federal law and mandates Medicaid coverage for ALL individuals up to 133% FPL.

Financing – “Newly eligible” enrollees 2014 to 2016 -100% federal funds 2017 to 2020 – rate decreases on a schedule to 90%

Expansion will increase Iowa Medicaid enrollment by estimated 80,000 to 100,000 adults (25%)Parents (currently covered at 28% FPL)Some disabled (SSI group is at 75% FPL) Iowa covers 40,000 non-disabled single adults, childless

couples up to 200% FPL under an 1115 waiver called IowaCare. IowaCare is very limited coverage.

Eligibility Policy Options/Opportunities

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Current Medicaid coverage goes above 133% FPL for some groups

Do we continue those groups?Enact option to create a Basic Health Plan between

133% FPL to 200% FPL?Move to the Exchange?Move some, not all?Wraparound?

IowaCare planned phase-out

Policy decisions for lawmakers

Eligibility Policy Options/Opportunities

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ACA significantly restructures ‘how’ Medicaid eligibility will be done

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Dramatically different way of counting income: “Modified Adjusted Gross Income” (MAGI)Iowa Today = gross household income from which

various deductions and disregards are appliedMAGI is based on income tax guidelines (it is very

different)New requirements for streamlining eligibility

procedures:No asset/resource tests for newly eligible and

current adult and children groups

Coordination of Enrollment

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Eligibility Gateway: ACA requires integration of eligibility and enrollment for Medicaid and the Exchange

Common web-based application for Medicaid, CHIP, tax creditsExchange must screen applicants for Medicaid and CHIP and

Medicaid/CHIP must accept referral without further reviewMedicaid must ensure referral to exchange for those found

ineligible for Medicaid and CHIP

Exchange may contract with Medicaid to determine eligibility for tax credit subsidies

Potential for large duplication of effort, financial disputes between Medicaid eligibility processes and Exchange without an integrated approach

Operational Challenge: Transforming the Eligibility Process

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Current mainframe eligibility system is 30 year old system that has “hardening of the arteries” and uses a dead language *

Paper applicationsLabor-intensive reviews and work flowOff-system calculations and “work-arounds” Very inflexible, expensive to maintain and operate

* Thanks to Andy Allison, KHPA Executive Director

Operational Challenge: Transforming the Eligibility Process

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Operational Challenge: Time

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Building eligibility systems and re-engineering processing across the state to wholly new methods and structures is very complex and takes a lot of time – 3 years is not a lot of time

DHS is beginning to research system and redesign options and planning

Plan to provide options, budget estimates for the Governor and Legislature for FY 12 budget consideration

Appears significant federal financing will be available for IT

Medicaid Expansion Benchmark Plan

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ACA mandates that ‘new eligibles’ (those added under the expansion to 133% FPL) have at least a ‘Benchmark’ Benefit Plan

o 100% Federal funds 2014-2016, phases down to 90% match

States have flexibility to design the plan What will we cover?

o Mental Health benefits? Opportunity to leverage higher Medicaid match rate to save on services currently 100% state and county funded, and impact MH populations in prisons and jails

Other Impacts

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Challenge of size – managing the size and complexity of implementation and ensuring collaboration with other agencies, at a time of state budget shortages.

Challenge of unknowns – designing programs and processes at the same time the federal rules/guidance not available or are still being developed.

IME operations: Workload volume – claims, medical review, member/provider

assistance Prospect for new claims processing IT system at the same time

Medicaid provider network capacity – will there be enough providers?

Primary care workforceCost containment

Fiscal Impact

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Many “unknowns” remain; much yet to be determined

Potential for increased costs to state: Mandatory Medicaid expansion Costs associated with developing and operating the “Exchanges” Changes to eligibility systems & interoperability with “Exchanges” Restructuring of drug rebate programs Reduction in Disproportionate Share Hospitals (DSH) payments

Potential for decreased costs to state: Enhanced FFP Shifting current Medicaid populations in part or in whole to the

Exchange Long Term Care options at enhanced federal match New Medicaid coverage at enhanced federal match, possibly

replacing state-only or county-only funded programs

Opportunities

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The ACA includes provisions that are not mandatory, but include those that could assist states to implement improvements or re-balancing, such as:New State Plan optionsImprovements in health care programs

Mental Health Long Term Care Early Childhood Programs

Demonstration grantsPayment reform initiativesIntegration of Other Transformation

Initiatives Medical Home Health Information Technology (HIT) ICD-10 conversion

Questions?

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