Medicaid: Current and Future Challenges...(2012) –40% for dual eligibles –Federal share = 50% to...
Transcript of Medicaid: Current and Future Challenges...(2012) –40% for dual eligibles –Federal share = 50% to...
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Medicaid: Current and Future Challenges
for the
19th Princeton Conference Council on Health Care Economics and P0licy
Princeton, New Jersey May 23, 2012
Kathleen D. Gifford
Health Management Associates
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Medicaid Today: America’s Largest Health Program
– Average enrollment (person-year equivalents): 57 Million (2012)
– 68 million “ever enrolled”; 1 in 5 Americans annually
– Projected total spending: $457 billion (2012)
– 40% for dual eligibles
– Federal share = 50% to 74%
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Sources: HMA projections, based on: CBO, Medicaid Baseline, March 2011; and CMS, Office of the Actuary, August 2011.
Sources: CBO, Medicaid Baseline, 2012; and CMS Office of the Actuary, “2011 Actuarial Report on the Financial Outlook for
Medicaid,” March 2012.
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Primary Issues for Medicaid Now
• Unrelenting fiscal pressure: Continuous search for new options to control spending growth. • “Medicaid growth is simply unsustainable and threatens to consume the core
functions of state government.”
• AZ Gov. Jan Brewer signing MOE waiver request to cut Medicaid adults.
• “ We must act quickly to save the entire Medicaid system from collapse, and protect providers and the millions of Illinois residents that depend upon Medicaid for their healthcare.. . ”
• IL Gov. Pat Quinn announcing $2.7 billion Medicaid cost containment plan (4/19/12)
• Quality improvement: Making Medicaid a more effective, higher value program
• Health reform: Preparing for a significant role in an uncertain political environment.
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SOURCE: Vernon Smith, Kathy Gifford, Eileen s, Robin Rudowitz and Laura Snyder, “Moving Ahead Amid Fiscal Challenges: A Look at Medicaid
Spending, Coverage and Policy Trends,” The Kaiser Commission on Medicaid and the Uninsured, October 2011. http://www.kff.org/medicaid/8248.cfm
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Medicaid has been unsustainable for a long time . . .
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
17.4%
8.4%
SOURCE: NASBO State Expenditure Reports, 1988, 2001 and 2011.
Medicaid as a Percent of State General Fund Budgets, FY 1988 – FY 2011
— 23.6% of Total State Expenditures (K-12=20.1%) — Largest source of federal funds (42.3% in FY 2010)
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Total Medicaid Spending Growth Rates, All Funds, FFYs 2007 - 2020
5.4% 5.9%
7.6% 6.0%
7.6%
5.9% 7.2%
14.8%
9.0% 8.0%
7.2% 6.7% 7.1%
7.4%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
SOURCE: HMA based on CMS Office of the Actuary, “2011 Actuarial Report on the Financial Outlook for Medicaid,” March 2012. .
Average Annual Rate of Growth State Costs 2015 to 2020 = 7.6%
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State Share of Medicaid Spending Growth Rates, FFYs 2007 - 2020
5.4 5.9
-12.8
-0.5
20.9 23.4
5.8 6.6 7.1 7.0 7.6
6.9 7.3 8.5
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Average Annual Rate of Growth State Costs 2015 to 2020 = 7.4%
Calendar Years
SOURCE: HMA based on CMS Office of Actuary, March 2012. 2011–2020 are projections.
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States Continue to Look for New Ways to Slow Medicaid Cost Growth, But …
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• Easy actions have been taken
• Eligibility reductions currently restricted by ACA MOE
• Provider reimbursement cuts could jeopardize access; disproportionately impact safety-net providers
• Optional benefit cuts may shift utilization to higher cost mandatory services/settings
Also:
• Medicaid patients are sicker
• Medicaid costs are already lower than other payers’
• Medicaid cost growth has been lower
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Can Medicaid Absorb the New Enrollment Expected in 2014 and Beyond?
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53.9 56.1 57.0 57.3
72.0
78.7 81.4 82.8 83.8 84.4 85.1
0
10
20
30
40
50
60
70
80
90
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Millions of U.S. Medicaid Beneficiaries during year. Unduplicated, person-year equivalents annually.
SOURCE: CMS Office of the Actuary, “2011 Actuarial Report on the Financial Outlook for Medicaid,” March 2012.
— 25.7% enrollment increase expected in 2014
• Medicaid added 19.2M enrollees between 2001 and 2011 (+52%) — Health Care Reform Will Add 15M in 2014
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State Implementations Enrollees
2011
Mississippi Expansion 52,500 South Carolina Expansion of current contracts 80,000
Illinois ABD Expansion 40,000 California ABD Expansion 380,000
Arizona LTC Rebid 25,000 Kentucky Rebid/Expansion 460,000
2012
Virginia Expansion 68,000 Texas Rebid/Expansion 3,200,000
New York LTC Rebid/Expansion 200,000 Louisiana Expansion 870,000
Washington Rebid/Expansion 800,000 Nebraska Expansion 75,000
Missouri Rebid 425,000 New Hampshire Expansion 130,000
Hawaii Rebid 225,000 Pennsylvania New West Zone – Expansion 175,000
Managed Care to the Rescue?
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Recent Upsurge in Medicaid MCO RFP Activity
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State Implementations Enrollees
2013 Kansas Rebid/Expansion 313,000
Ohio Rebid 1,650,000
Pennsylvania New East Zone – Expansion 290,000
Florida LTC Rebid/Expansion 90,000
2014 Georgia RFP Release Expected July/August 2012 – Rebid/Expansion
1,500,000
Arizona
Florida
Acute Care RFP Release Expected November 2012 — Rebid TANF/CHIP RFP Release Expected 1/1/13 – Rebid/Expansion
1,100,000
2,800,000
More expected in 2013 and 2014
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States Turning to Other Care Management, Delivery System and Payment Reforms
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• Patient-Centered Medical Home Initiatives
• ACA Health Homes for Persons with Chronic Conditions
• New Integrated Delivery System Models (ACOs, etc.)
• P4P/Other Reimbursement Reforms
• Dual Eligible Integration Initiatives
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Conclusion: Historic but Uncertain Time for Medicaid
– Significant state and federal budget issue • Extended economic downturn and rising health care costs add to
challenge
– Primary health reform coverage expansion vehicle • States face major system, financial, administrative resource and
political challenges
– Medicaid will increasingly rely on managed care • Helps to assure access, quality, cost savings
• Focus now is on innovations and quality in serving dual eligibles, persons with disabilities, long term care
– Future is clouded by political uncertainty
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