MassHealth: Dispelling Myths & Preserving Progress - PowerPoint PPT Presentation

MassHealth: Dispelling Myths & Preserving Progress Massachusetts Health Policy Forum June 5, 2002 Karen Quigley, Audrey Shelto, Nancy Turnbull Massachusetts Health Policy Forum, 2002

Successes of MassHealth • Program serves most vulnerable • State’s deliberate efforts to expand health coverage have been very successful • Expansions are a major reason for relatively low rate of uninsured in Massachusetts – 3% for children vs. 12% in US – ~6% for adults vs. 16% in US • Program is essential source of payment for many providers, particularly the safety net Massachusetts Health Policy Forum, 2002

MassHealth Enrollment Has Grown by Over 300,000 since FY97 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 FY97 FY98 FY99 FY00 FY01 FY02 Children & Families Disabled Seniors Basic Massachusetts Health Policy Forum, 2002

MassHealth Spending: FY 1996-2003p* $7,000 $6,000 State Federal $5,000 in millions $4,000 $3,000 $2,000 $1,000 $0 1995 1996 1997 1998 1999 2000 2001 2002e 2003p (estimated) (projected) Fiscal Year 1995 1996 1997 1998 1999 2000 2001 2002e 2003p State $ 1,476.7 $ 1,543.9 $ 1,657.5 $ 1,603.9 $ 1,819.9 $ 2,043.4 $ 2,140.4 $ 2,465.6 $ 2,769.9 Federal $ 2,026.6 $ 1,980.6 $ 1,939.3 $ 2,172.8 $ 2,155.3 $ 2,347.0 $ 2,623.8 $ 2,910.2 $ 3,182.1 Total Medicaid $ 3,503.3 $ 3,524.5 $ 3,596.8 $ 3,776.7 $ 3,975.2 $ 4,390.4 $ 4,764.2 $ 5,375.8 $ 5,952.0 *Excludes disproportionate share hospital payments. Source: Mass. Taxpayers Foundation Massachusetts Health Policy Forum, 2002

Less Than Half of MassHealth Spending is Paid by the State State Share Federal Share 100% 90% % of Total Expenditures 80% 54% 53% 53% 54% 54% 55% 56% 58% 58% 70% 60% 50% 40% 30% 46% 47% 47% 46% 45% 46% 44% 42% 42% 20% 10% 0% FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002e FY 2003p Fiscal Year Source: MTF and DMA slides Massachusetts Health Policy Forum, 2002

MassHealth Is A Growing Share of the State’s Budget, Both In Total and in Terms of the State Share of Spending 30% 25% % of state budget 20% 13.4% 12.6% 11.9% 12.5% 11.2% 15% 11.7% 11.0% 11.0% 11.7% 10% 11.7% 10.7% 5% 9.7% 9.7% 9.4% 9.3% 9.1% 9.1% 8.6% 0% 1995 1996 1997 1998 1999 2000 2001 2002e 2003p Fiscal Year State Share Federal Share 1995 1996 1997 1998 1999 2000 2001 2002e 2003p State Share 9.1% 9.1% 9.4% 8.6% 9.3% 9.7% 9.7% 10.7% 11.7% Federal Share 12.5% 11.7% 11.0% 11.7% 11.0% 11.2% 11.9% 12.6% 13.4% Source: MTF, 2002e based on governor’s supplemental requests to date; 2003p Medicaid based on House 1, total budget based on MTF projection of 3% growth over 2001. Massachusetts Health Policy Forum, 2002

The State’s Share of MassHealth Spending is Not Out of Line With Spending for Other Important Priorities, Such as Education and Benefits for State Employees Corrections Mental Retardation Higher Ed Debt Service Employee Benefits MassHealth: State Share Education Local Aid $0 $1,000 $2,000 $3,000 $4,000 Spending in FY 2001 (Dollars in Millions) Source: Mass. Taxpayers Foundation Massachusetts Health Policy Forum, 2002

Most MassHealth Spending Is For A Relatively Small Proportion of Members, Most of Whom are Elderly or Disabled 954,900 $4,850,000 LT Unemployed LT Unemployed 7% 5% Seniors 12% Seniors 37% Disabled 20% Disabled 34% Families 62% Families 24% Enrollees Expenditures Source: Division of Medical Assistance, enrollment as of 6/30/01 and FY 2001 estimated expenditures. Massachusetts Health Policy Forum, 2002

Services Provided to Elderly and Disabled Members Are Much More Expensive Than Those Provided to Families and Long-Term Unemployed Adults Elderly $17,515 Disabled $8,723 Long Term $3,460 Unemployed $2,743 Families $5,195 All Members $0 $5,000 $10,000 $15,000 $20,000 Expenditures Per Member: FY 2002 Source: DMA Massachusetts Health Policy Forum, 2002

Explaining The Trends in MassHealth Spending Massachusetts Health Policy Forum, 2002

Increased Membership Explains 55% of the Increase in Expenditures, and Cost Per Member Accounts for 45% FY98-01 LT Unemployed LT Unemployed Cost Per Member Caseload 4% 9% Disabled Caseload Senior Cost Per 16% Member 7% Disabled Cost Per Member Senior Caseload 23% 13% Family Cost Per Family Caseload Member 17% 11% Massachusetts Health Policy Forum, 2002

Expansion Accounts for 11% of Total MassHealth Costs in FY01 and 33% of Increases from FY97-02 Medicaid Expenditures: Expansion and Non-Expansion Populations ($ millions) $6,000 11.7 % 11% 10% $5,000 8% 4% $4,000 $3,000 $2,000 $1,000 $0 1997 1998 1999 2000 2001 2002 est $166 $322 $436 $547 $629 Expansion $3,570 $3,608 $3,652 $3,982 $4,236 $4,747 Non-expansion Source: Massachusetts Taxpayers Foundation. 2002. Massachusetts Health Policy Forum, 2002

Uncompensated Care Costs Went Down During the Initial Period of MassHealth Expansion ($ millions ) $500 $450 $400 $75 $77 $81 $350 $78 $70 $300 $250 $200 $356 $345 $322 $309 $305 $150 $100 $50 $0 1998 1999 2000 2001 2002 (est) Emergency Bad Debt Free Care Source: DHCFP Massachusetts Health Policy Forum, 2002

Distribution of MassHealth Fee for Service Payments, FY 01 Medicare Crossover Ancillary/Support Payment Services Long Term Care 5.0% 3.5% Facilities Professional Services 37.5% 6.8% Community Based Care 12.1% Acute Care Hospitals Pharmacy 16.3% 18.8% Massachusetts Health Policy Forum, 2002

Total Spending on Pharmacy is Growing Twice as Fast as Spending for Any Other Service Average Annual Percent Increases in Total Spending*, FY98 – FY01 Total 8.9% Long Term Care Facilities 3.6% Medicare Crossover Payments 4.5% Professional Services 9.6% Ancillary/Support Services 10.3% Community Based Care 11.6% Acute Care Hospitals 11.8% Pharmacy 19.9% 0% 5% 10% 15% 20% 25% *Total spending reflect the effect of changes in membership, member mix, utilization and rates of payment Massachusetts Health Policy Forum, 2002

Causes of PMPM Cost Increases Vary by Group 100% 80% 60% 40% 20% 0% -20% Non Disabled Disabled LT Seniors Children and Adults and Unemployed 20% 51% 51% -0.7% Pharmacy 25% 9% -2% 24% Acute Hospital -1% 13% 44% -0.6% Comm LTC Percent Contribution of Three Services to PMPM Expense Increases by Enrollment Group, FY98 - FY01 Massachusetts Health Policy Forum, 2002

Cost per Prescription is Driving Pharmacy Costs PMPM % Change from FY00 – FY01 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Disabled Adults and Non-Disabled Adults Seniors Basic Children and Children 12.3% 13.8% 11.3% 9.0% % Change in Total Pharmacy Cost PMPM 6.8% 10.0% 7.7% 6.5% % Change in Cost/Script % Change in Scripts/Member 5.2% 3.4% 3.3% 2.4% Source: DMA, FY00 – FY01 Change, Data through 3/30/02 Massachusetts Health Policy Forum, 2002

Putting MassHealth in Perspective Massachusetts Health Policy Forum, 2002

Recent MassHealth Spending Growth is Lower than Trends for Private Health Insurance Premiums MassHealth FY 2001 PMPM Growth Compared to Average Premium Growth 19% 20% 18% 15% 16% 14% 11% 12% 8% 10% 8% 6% 4% 2% 0% MassHealth Mass: Mass: National Individual Family Plan Average- Plan Employers Source: DMA; Division of Health Care Finance and Policy, 2001 Employer Health Insurance Survey ; Kaiser Family Foundation, Trends and Indicators in the Changing Health Insurance Marketplace, 2002. Massachusetts Health Policy Forum, 2002

Administrative Costs for MassHealth Are Far Lower Than For Commercial Health Plans 12.0% 10.0% 12.0% 9.0% 10.0% 8.0% 6.0% 3.2% 4.0% 2.0% 0.0% MassHealth Blue Cross Harvard Tufts Health Blue Shield Pilgrim Plan Administrative Costs as a Percent of Expenditures, 2001 Source: DMA and health plan 2001 financial reports. MassHealth inclues administrative costs included in contracts with managed care plans and contract with UMass Medical School Massachusetts Health Policy Forum, 2002

The Percent of Massachusetts State Expenditures Going to the Medicaid Budget is Average Compared to Peer States Total Medicaid Expenditures as a Percent of Total State Expenditures, FY01 40% 35% 30% 25% 20% 15% 10% 5% 0% MA CA CO CT DE IL MD MN NH NJ NY WA State Source: National Association of State Budget Officers Massachusetts Health Policy Forum, 2002

MassHealth Income Standards Are Generally Consistent With, And In Many Cases More Stringent, Than Those in Peer States How Much Can A Working Parent with Two Children Earn and Still Be Eligible for Support? $40,224 Annual Income Eligibility $40,000 $29,256 $29,260 $30,000 Threshold $22,966 $21,942 $19,452 $20,000 $15,708 $15,708$14,628 $14,628 $6,288 $10,000 $6,132 $0 MA CA CO CT De IL MD MN NH NJ NY WA States with 50% FMAP Source: Center on Budget and Policy Priorities, July 2001. Massachusetts Health Policy Forum, 2002

Average Medicaid Expenditure Per Member, FY98 $10,000 $8,356 Average expenditure $8,000 $7,126 $6,857 $6,323 $5,715 $6,000 $5,601 $4,852 $4,395 $4,361 $4,111 $3,939 $4,000 $2,328 $2,040 $2,000 $0 NH MA CA CT DE MD MN NJ NY WA US CO IL State CMS "A Profile of Medicaid: 2000. Figures exclude DSH Massachusetts Health Policy Forum, 2002