March, 2017 Brian Colby, Special Projects Director bcolby@mobudget.org
FY 2017 State Budget
FY 2018 State Budget General Revenue $9.489 billion
Medicaid Makes Sense **Eligibility limits shown as a percent of the Federal Poverty Level
1000000 1200000 200000 400000 600000 800000 0 Feb-2008 Primary Driver for Enrollment Jun-2008 Oct-2008 Feb-2009 Jun-2009 Oct-2009 Feb-2010 Jun-2010 Oct-2010 Growth is Kids Feb-2011 Jun-2011 Oct-2011 Feb-2012 Jun-2012 Oct-2012 Feb-2013 Jun-2013 Oct-2013 Feb-2014 Jun-2014 Oct-2014 Feb-2015 Jun-2015 Oct-2015 Feb-2016 Jun-2016 Oct-2016 Persons with Disabilities Elderly Custodial Parents Children Pregnant Women
Medicaid Makes Sense
Medicaid Makes Sense
American Health Care Act • It does not repeal the ACA but changes it. • Budget Reconciliation only allows items dealing with the budget • Budget Reconciliation is necessary to move through the Senate with 51 votes • It still fundamentally changes the Medicaid program from an entitlement program to something different.
What the AHCA does not change • covering preexisting conditions; • guaranteeing availability and renewability of coverage; • covering adult children up to age 26; • capping out-of-pocket expenditures
Protections Remain The ACA’s prohibitions against • health status underwriting; • lifetime and annual limits; and • discrimination on the basis of race, nationality, disability, age, or sex are still in place.
What is Repealed for Private Individual Market Requirements? • They do repeal the ACA’s actuarial value requirements • And replaces the ACA’s three to one age ratio limit with a five-to-one ratio.
CBO Estimate • Federal Medicaid spending cut by $880 billion or 17.6 percent over the next ten years, • reduction in federal funding for the Medicaid expansion and conversion of Medicaid to a per capita cap. • By 2026, the annual cut in federal spending would rise to $155 billion, a reduction of 24.8 percent, relative to current law. • the number of Medicaid beneficiaries would fall by 14 million in 2026. Most of those losing Medicaid would likely end up uninsured.
Enhanced Match Phased Out • 90% matched rolled back to standard match rate increasing costs to state for expansion population • 7 states will drop expansion automatically due to triggers in their expansion legislation
Reinsurance and Market Stabilization • The bill includes a complicated reinsurance funding program for the states. • It is funded with Federal funds that are distributed on the basis of aggregated claims data. • It is optional to the states • The funding mechanism phases out over time to require a 50% state match by 2027 to maintain the program. • This could have a significant impact on insurance rates especially for Missourians 50-64 years old.
Replacing The Individual Mandate With A Continuous Coverage Requirement • The individual mandate penalties eliminated • The employer mandate penalties eliminated • Individuals must prove that they did not have a gap in creditable coverage of at least 63 continuous days during the 12 months preceding coverage; • A 30% premium surcharge as a penalty is assessed if you lapsed coverage • Individuals aging out of dependent coverage must prove that they enrolled during the first open enrollment period after which dependent coverage ceased.
Tax Credit vs Subsidy • The bill creates a new age-adjusted tax credit available for individuals purchasing insurance in the individual market beginning in 2020. • the tax credit is refundable and advanceable on a monthly basis to pay for individual market premiums.
The new plan proposes: • The annual tax credit amount is established at: • $2,000 for an individual under 30, • $2500 for those age 30 to 39, • $3,000 for those age 40 to 49; • $3,500 for those age 50 to 59, • $4,000 for those age 60 and over. • The tax credit begins to phase out when a taxpayer’s modified adjusted gross income reaches $75,000 ($150,000 for joint filers) adjusted annually by the consumer price index plus one percentage point for inflation after 2020
Cost Sharing Reduction • The bill repeals the ACA’s cost-sharing reduction provisions after 2019. These provisions currently reduce out-of-pocket limits and increase the actuarial value of coverage for individuals with incomes below 250 percent of the federal poverty level. The repeal of these provisions would result in dramatically higher deductibles and other cost-sharing for these low-income individuals.
Repeals Revenue • The bill repeals revenues on high income earners and corporations that paid for the ACA. • The ACA was paid for by taxes on the health care industry, high income earners and savings to the Medicare program. • Most of those revenues are repealed and replaced with reductions in coverage
Questions about Kids Coverage • By 2026, CBO projects that 36 million children will be enrolled in Medicaid. Here are some questions that need to be answered for America’s children before this proposal moves further: • How much of the $880 billion in Medicaid cuts will fall on children and the providers that now treat them? • What will happen to high-cost children with disabilities? • What effect will the cap have on their EPSDT benefits? • How will it affect the amount states pay their providers for furnishing covered services?
More Questions • How will states be able to absorb price shocks from necessary drugs like EpiPen if federal Medicaid funding is capped? • Will children’s hospitals and other centers of excellence be able to continue to serve their all children in their communities? • How would the $880 billion in Medicaid cuts be distributed among the states? • Would some states and their residents be hit harder than others? • What happens to children in states with low per capita spending in 2016? • Are those states locked into their low spending base in perpetuity?
What about Medically Complex Kids Today, Medicaid covers 10.2 million adults and children with serious illnesses or disabilities whose health needs create significant financial burden for patients and their families. For example: • Medicaid pays for physical therapy, occupational therapy and speech therapy that children with cerebral palsy and other developmental disabilities may receive through school. • Medicaid covers private-duty nursing and assistive technology — such as ventilators, feedings tubes and communication devices — that children with disabilities may need to attend school and avoid placement in institutional settings. • Medicaid frequently fills in coverage gaps for privately insured children with disabilities since over one-third of insured children with disabilities report inadequate coverage.
Opposing the New Proposal • American Medical Association, AMA • AARP • American Hospital Association
Get Involved Connect with organizations working on your issues: • Visit websites – information • Sign up for email updates – action alerts • Connect on Social Media /MOBUDGET @MISSOURIBUDGET
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