HEALTHCARE REFORM 2014 Medicaid Expansion Overview OCTOBER 2012 - PowerPoint PPT Presentation

HEALTHCARE REFORM 2014 Medicaid Expansion Overview OCTOBER 2012 The enclosed slides are intended to provide you with an overview of the Affordable Care Act’s Medicaid expansion provision. Healthcare reform included significant federal funding for states to reduce the number of uninsured Americans by allowing more individuals to qualify for Medicaid coverage. This tool is designed to help distributors and manufacturers understand how this policy is expected to be implemented and its impact on the healthcare continuum. This is one of many healthcare reform resources HIDA has developed. For more information on healthcare reform, visit www.HIDA.org, or contact HIDA Government Affairs at 703-549-4432. DISTRIBUTION DISTRIBUTION STREAMLINING HEALTHCARE SM

The Supreme Court Decision: Breaking Down the Impact June 28, 2012, the Supreme Court ruled that the expansion of Medicaid under the Affordable Care Act (ACA) is constitutional if the federal government does not penalize states (i.e., withhold funds) that choose not to implement this expansion. 1 Expanding Medicaid in 2014 is no longer a mandate on states, but a choice. State governments continue to weigh the decision States’ Positions in FL. v. HHS Supreme Court Case of whether or not to participate • Six states plan to decline funding for a Medicaid WA MT VT ME expansion (FL, LA, MS, SC, TX and WI); Texas and ND MN OR Florida represent large numbers of uninsured NH NY ID SD MA WI WY MI RI • A total of 15 states are leaning toward rejecting the PA CT IA NE NV NJ OH IN Medicaid expansion (AL, GA, IN, IA, KS, MO, NE, NV and UT IL DE WV CO MD VA CA MO KS DC VA) KY NC TN OK • Some states believe the expansion could save them AZ SC NM AR MS GA significant amounts of money (AR, OK) AL AK TX LA • Worst case – 26 states that sued the federal FL HI government after the passage of healthcare reform could decide to opt out leaving 11-13 million uninsured n States challenging the ACA (25 states) Note: VA filed its own challenge separately and is not a party in n States both challenging and supporting the ACA (2 states) the case accepted by the Su- n States supporting the ACA (11 states) preme Court States not taking a position in the litigation (12 states) Source: http://www.kff.org/healthreform/upload/Health-Care-Reform-at-the-U-S-Supreme-Court-Presentation-Slides.pdf 1 Kaiser Family Foundation, A Guide to the Supreme Court’s Affordable Care Act Decision (July 2012), available at: http://www.kff.org/healthreform/upload/8332.pdf DISTRIBUTION DISTRIBUTION STREAMLINING HEALTHCARE SM

Expanding Medicaid Enrollment is a Key Element in Reform To help decrease the number of uninsured, the ACA gives states the opportunity to secure significant federal funding for expanding Medicaid coverage to low-income individuals. The Medicaid expansion is projected to provide health coverage to 11 million more low-income adults and children by 2022. 2 When will the Medicaid expansion go into effect? Federal Government Will Bear Nearly All January 1, 2014 however, states have the option to get an early start on Medicaid Expansion Costs Over 2014-2022 expansion. How much of the cost of the Medicaid expansion will the federal $931 billion government cover? (93%) States will receive 100% federal match for all newly eligible beneficiaries up to Federal Share $73 billion 133% federal poverty level (FPL) in 2014-2016, 95% in 2017, 94% in 2018, 93% in (7%) States’ Share 2019 and 90% federal financing for 2020 and subsequent years. 3 Source: http://www.cbpp.org/cms/index.cfm?fa=view&id=3801 2 Congressional Budget Office, Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision (July 2012), available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/43472-07-24-2012-CoverageEstimates.pdf. 3 ACA § 2001(a)(1), codified at 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII). The ACA expands coverage to 133% FPL and also provides for an income disregard of 5% FPL, effectively extending eligibility for the Medicaid expansion group to 138% FPL ($15,415 for an individual and $31,809 for a family of four in 2012). ACA § 2002(a), adding 42 U.S.C. § 1396a(e)(14)(I). DISTRIBUTION DISTRIBUTION STREAMLINING HEALTHCARE SM

State Governments Decide Fate of Medicaid To date, only seven states and the District of Columbia have begun the process to cover more adults before the 2014 expansion of the Medicaid program. 4 Benefits • Increases access to healthcare coverage • Eases cost pressures on states from uncompensated care provided to the uninsured • Increased federal funding reduces the cost to states States Getting an Early Start on the Medicaid Expansion, April 2010-May 2012 Challenges Coverage Authority Effective Date Income Limit Enrollment • Could increase overall spending by states; CA Waiver Nov 1, 2012 200% FPL 251,308 adding pressure to state budgets CT ACA Option April 1, 2010 56% FPL 74,752 • Reduces current Medicaid funding by cutting CO Waiver April 1, 2012 10% FPL 10,000 disproportionate share hospital (DSH) DC ACA Option July 1, 2012 133% FPL 40,776 payments Waiver Dec 1, 2011 200% FPL 3,411 • Woodwork effect – people who are already MN ACA Option March 1, 2010 75% FPL 80,200 Waiver August 1, 2011 250% FPL 41,811 eligible for Medicaid but aren’t currently MO Waiver July 1, 2012 133% FPL N/A enrolled will seek coverage–this population NJ Waiver April 14, 2011 23% FPL 53,490 would not be covered by the 100% federal WA Waiver Jan 3, 2011 133% FPL 50,920 match Source: http://www.kff.org/medicaid/upload/8312.pdf 4 American Medical News, Only 7 States, D.C. expand Medicaid ahead of 2014 (June 11, 2012) available at: http://www.ama-assn.org/amednews/2012/06/11/gvsb0611.htm DISTRIBUTION DISTRIBUTION STREAMLINING HEALTHCARE SM

Preventive and wellness services and • Laboratory services; • Emergency services; • Hospitalization; • Maternity and newborn care; • Mental health and substance • Prescription drugs; • Rehabilitative and habilitative • Ambulatory patient services; • Pediatric services, including oral and • Expectations for 2014 Increased patient load for providers • Doctors, hospitals and insurers are preparing for an influx of new patients • Providers are adopting “medical homes” to coordinate care • The full economic impact on providers and suppliers is unknown (e.g., potential provider and healthcare workforce shortages may complicate expansion) Expanded benchmark benefits package = increased market 2014 Medicaid expansion benchmark benefits package access to products and services Essential health benefits must include: • The ACA lists ten broad categories of “essential health benefits” for which coverage will be mandatory in the Medicaid expansion • Medicaid must provide preventive services with no cost sharing, deductibles or copays • States may choose to offer Medicaid coverage beyond federal requirements use disorder services, including behavioral health treatment; Impacts on supply chain partners services and devices; • Variations in Medicaid expansion means manufacturers and distributors must pay greater attention to state specific programs and the impact on their customer base • Healthcare providers and suppliers may continue to be faced with uninsured low- chronic disease management; and income patients and the problems of uncompensated care vision care. Source: Patient Protection and Affordable Care Act DISTRIBUTION DISTRIBUTION STREAMLINING HEALTHCARE SM