Medicaid Expansion
Middle Atlantic Actuarial Club2013 Annual Meeting
Christopher Truffer, FSA, MAAAKathryn Rennie
September 12, 2013
2
• Started in 1965• Provides assistance for health care
for certain low-income persons• Jointly administered and funded for
by Federal and State governments– Federal government pays about 57
percent of costs (50-74 percent across states)
Brief Overview of Medicaid
• $432.0 billion for Medicaid in 2012– 1.1% increase from 2011
• Benefits: 0.3% increase from 2011– Slowdown from last several years
• Administration: 17.5% increase from 2011– Health IT bonus payments
2012 Medicaid Expenditures
• 56.7 million enrolled in Medicaid in 2012– 1.9% increase from 2011– Slowdown in enrollment growth for
children, adults• 1 in 5 persons in U.S. enrolled at
some time during 2012
2012 Medicaid Enrollment
5
• Part of the Affordable Care Act (ACA)• Medicaid eligibility extended to
persons under age 65 with household income less than 138 percent of Federal poverty level (FPL)
• Eligibility based on income only, no categorical eligibility requirements
Medicaid Expansion
6
Mandatory Populations• Children• Parents below state’s AFDC cutoffs from July 1996• Pregnant Women• Elderly and Disabled SSI beneficiaries• Certain Working Disabled• Medicare Buy-in Groups (QMB, SLMB, QI)
Optional Populations• Adult without children• Medically needy
Categorical Eligibility
7
Basis of Eligibility US Minimum
Children 0-18 Children 0-5 133% FPL Children 6-18 100% FPLAdults 19-64 Pregnant 133% FPL Disabled 75% FPL Parents 11%-68% FPL* Childless Adults n/aAged 65+ 75% FPL
Pre-ACA Minimum Eligibility Standards, 2009
*Eligibility relates to 1996 Aid to Families with Dependent Children (AFDC)rules in effect in each stateSource: 2012 Brief Summaries of Medicare and Medicaid, OACT
8
Post-ACA Medicaid Expansion Eligibility
StandardsBasis of Eligibility US Minimum
Children 0-18 Children 0-5 138% FPL Children 6-18 138% FPLAdults 19-64 Pregnant 138% FPL Disabled 138% FPL Parents 138% FPL Childless Adults 138% FPLAged 65+ 75% FPL
9
Current Income Standards• Varies state by state• Asset tests may be required
Post-ACA• Income standards based on Modified
Adjusted Gross Income (MAGI)• No asset test requirements• Applies to all under 65 except foster care
children and disabled persons
Income Definition
10
• Alternative benefit plans– Provide minimum essential health
benefits (EHB) provided through the Health Insurance Exchanges
– Requires prescription drug and mental health coverage
• Plans either based on or actuarially equivalent to 1 of 3 benchmark plans
Expansion Benefits
11
• Standard Blue Cross/Blue Shield PPO – FEHBP
• State Employee Coverage• Commercial HMO• Secretary Approved Coverage
Source: http://www.medicaid.gov/Federal-Policy-Guidance/downloads/SMD-12-003.pdf
Approved Benchmark Plans
12
• Federal government pays 100% of costs for newly eligible enrollees from 2014-2016
• Federal government share decreases starting in 2017– 2017: 95%– 2018: 94%– 2019: 93%– 2020: 90%
Federal and State Costs
13
• Income eligibility– States must expand to 138% FPL
• Maintenance of effort– States cannot enforce stricter enrollment
policies than those in place prior to March 2010
• For adults through January 1, 2014• For children under 19 through September 30, 2019
• Cost sharing and premiums– Must follow current Medicaid regulations
State Requirements for Expansion
14
• Lawsuit challenging the ACA filed by 26 States
• Medicaid expansion was ruled “unconstitutionally coercive”
• Conclusion: Medicaid expansion is not optional, however only penalty is withholding of ACA expansion funds
Supreme Court Decision
15
Expanding States• Flexibility to start, stop expansion at any time
starting January 1, 2014
Non-expanding States• Coverage “doughnut hole”• Health Insurance Exchanges can provide
subsidies for those with income over 100% FPL• Childless adults most affected
Effect of Supreme Court Decision on States
16
• Initially created fall 2012• Few States had made public decisions• For those that did, evaluated those to
determine most relevant factors• Most predictive factors
– Governor and State legislature party affiliation
– Lawsuit participant
How We Created Our Projections
17
Percentage of States projected to expand eligibility (weighted by population)• 2014: 45%• 2015 and after: 65%
Increased participation among currently-eligible persons (“woodwork” effect)• Expanding States: 70%• Non-expanding States: 56%
Note: 55% 2014 expansion rate in figures/tables
State Expansion Projections
18
• Office of the Actuary Health Reform Model (OHRM)– Models Medicaid expansion, Health
Insurance Exchanges, other ACA changes
– Based on Medical Expenditure Panel Survey (MEPS), National Health Expenditure (NHE) Accounts and Projections
Expansion Estimates
19
Kaiser Predicted State Decisions 2014
Source: http://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/#map
• All Medicaid ACA Expenditures– $514 billion (2012-2021), 9% increase– $468 billion Federal Share (91%), 15% increase
• Expansion Expenditures– $448 billion (2012-2021), 87% of total ACA
impact– $388 billion Federal share (87%), 83% of
Federal ACA impact• Enrollment
– 18.3 million (2021), 31% increase
Medicaid Expansion Impacts
Source: 2012 Actuarial Report on the Financial Outlook for Medicaid
21
• Expanding States generally had higher eligibility levels prior to 2014 than non-expanding States
• California estimated to account for about ¼ of all newly eligible enrollees in 2014
Medicaid Expansion Impacts
Medicaid Enrollment by Category, 2000-2021
Aged
AdultsExpansion Children
Territories
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 20210
10
20
30
40
50
60
70
80
90
TerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritoriesTerritories
AgedAged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged Aged
Blind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/DisabledBlind/Disabled
Children
ChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenChildrenAdultsAdultsAdults
Adults Adults Adults Adults Adults AdultsAdults
AdultsAdults Adults Adults
Adults Adults Adults Adults Adults Adults Adults Adults
Fiscal Year
Enro
llmen
t (m
illio
ns)
Actual Projected
Expansion Adult
Expansion Children
Medicaid Enrollment under Different Expansion Scenarios, 2000-2021
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 20210
10
20
30
40
50
60
70
80
90
Fiscal Year
Enro
llmen
t (in
mill
ions
)
Actual Projected
Full Expansion
Baseline
No Expansion
Medicaid Expenditures under Different Expansion Scenarios, 2000-2021
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
Fiscal Year
Expe
nditu
res (
in b
illio
ns)
Actual Projected
Full Expansion
Baseline
No Expansion
25
• 2021 Statistics– 3.2% GDP1
– 8.8% Federal Budget2
– Medicaid would be 20th largest country (Germany 19th)3
– Medicaid would be 22nd largest economy (Sweden 21st, Norway 22nd)4
Medicaid Projections in Context
Sources: 1 CMS, 2012 Actuarial Report on the Financial Outlook for Medicaid; 2 President’s FY 2014 Budget; 3 United States Census Bureau, International Data Base; 4 PwC, The World in 2050.
26
• Per enrollee costs estimated to be less than current enrollees’ costs– Age, gender, health status
• Health care utilization– Greater share of costs for physician services,
prescription drugs– Lower share of costs for hospital services, long-
term care• Most newly eligible enrollees expected to be
covered under managed care
Newly Eligible Enrollees
Medicaid Expenditures per Enrollee by Category, 2000-2021
2000
2001
2002
2003
2004
2005
2006
2006
.01 2007
2008
2009
2010
2011
2012
2013
2014
2014
.01 2015
2016
2017
2018
2019
2020
2021
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Fiscal Year
Actual Projected
Children
Adults
Expansion Adults
Expansion Children
28
1. Move Medicaid enrollees to Exchanges (Arkansas, Iowa, others)2. Require higher cost sharing or premiums (Michigan, others)3. Expand only to 100% FPL (Indiana, Ohio, others)
State Proposals for Expansion
29
• State expansion decisions• Enrollment and participation rate• Health care utilization and costs• Costs to Federal government and
States
Future of Medicaid Expansion
• http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Financing-and-Reimbursement/Downloads/medicaid-actuarial-report-2012.pdf
2012 Actuarial Report
31
2012 Brief Summaries of Medicare and Medicaid:http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/downloads/MedicareMedicaidSummaries2012.pdf
Benchmark Plan Information:http://www.medicaid.gov/Federal-Policy-Guidance/downloads/SMD-12-003.pdf
Kaiser Medicaid Expansion Map:http://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/#map
Other Sources
Top Related