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  • 1. Making the Investments Work: Implementing Health Reform in Florida Leda M. Perez, Vice President of Health Initiatives, Collins Center Jack Meyer, Principal, Health Management Associates Sharon Silow-Carroll, Principal, Health Management Associates February 17, 2011
  • 2. Welcome and introduction Page  The Collins Center for Public Policy finds smart solutions to important issues facing the people of Florida and the nation. We are independent, non-partisan, non-profit and passionately committed to lasting results. Health Management Associates is a consulting firm specializing in the fields of health system restructuring, health care program development, health economics and finance, program evaluation, and data analysis, with a special concentration on addressing the needs of the medically indigent and underserved people and assessing the new health reform legislation.
  • 3. Commissioning the study Page 
    • Foundation to Promote an Open Society (in partnership with the Open Society Institute) funds Collins Center in December 2009
      • - Collins establishes the Florida Stimulus Program, creating an online community
      • Reports on American Reinvestment and Recovery Act (ARRA) spending in Florida
  • 4. Authors Jack Meyer and Sharon Silow-Carroll Page 
  • 5. Page 
  • 6. Goals of the report Page 
    • Present the key features of national health reform in objective, clear terms
    • Determine the potential benefits to Florida
    • Explain the main challenges involved in implementing the law
    • Provide recommendations to address these challenges and maximize the benefits
  • 7. Should Florida maintain the status quo? Page 
    • Florida has over 4 million uninsured , and this number has been steadily rising
    • The state unemployment rate is well above the national average
    • Employers, particularly small firms, are under great pressure, and many may drop coverage
    • Florida Medicaid has very low eligibility standards , so decline in employer coverage means more uninsured
  • 8. Should Florida maintain the status quo? Page 
    • Going without insurance has direct costs (e.g. uncompensated care, cost-shift to privately insured) and indirect costs (e.g. work and school absenteeism, lower productivity, premature deaths); indirect costs valued at approx. $8-17billion/year
  • 9. Key components of health reform
    • Medicaid Expansion
    • Health Insurance Exchanges
    • Insurance Market Reforms
    • Requirements on individuals and employers
    • Financing measures
    • Grant opportunities
  • 10. Medicaid expansion
    • Florida would add about 1.0 to 1.4 million enrollees to Medicaid by 2019
      • — about 0.7 to 1.1 million of these would be newly insured
    • The additional cost to the state is about $1.2-$2.5 billion over the period of 2014-2019 (over $66.3 billion baseline)
    • But the state would draw in $20-24 billion , or at least $10 from federal government for each dollar it spends
    • For the newly eligible people, Florida would get $25 in federal funds for each state dollar
    • Source: John Holahan and Irene Headen. Urban Institute. May 2010.
  • 11. Medicaid expansion
    • Hospitals should realize at least $1 billion in savings from reduced uncompensated care; physicians/other providers will also benefit from less “free care”
    • Indirect savings will emerge from fewer absences from school and jobs, greater productivity, fewer premature deaths, and better health
    • Even if half of indirect costs are realized, the sum of direct and indirect savings to the private and public sectors will more than offset these new state costs
  • 12. Outreach and enrollment
    • Florida should use 21 st Century enrollment techniques that use data matching from other programs/sources outside health care to determine likely eligibility
    • Florida should expand use of community health workers to connect eligible people to programs and help them navigate the health system
  • 13. Benefits to Florida
    • Improve access to prevention/primary care
    • Reduce avoidable ER visits, hospital admissions
    • Improve health outcomes, productivity
    • Save on total costs per person
    • Reduce uncompensated care burden
    • Reduce cost-shift to private payers
  • 14. Challenges in Medicaid Expansion
    • Assuring an adequate health care work force
      • This will require raising, not lowering payments for doctors, nurses, and other professionals
    • Preparing to serve a population with complex medical needs
      • High incidence of chronic illness among poor and near-poor newly eligible adults
    • Finding the funds for the state’s contribution amidst competing needs and capturing some of the savings
  • 15. Health Insurance Exchange
    • Exchange is insurance ‘marketplace’ for individuals and small businesses to compare and purchase health plans, receive subsidies
    • Can offer single point of entry to determine eligibility for enrollment and subsidies in Exchange, Medicaid, and CHIP
    • FL can create its own Exchange(s) rather than let federal government step in and do it
      • Choices re: governance, number of exchanges, funding
    • Potential for Exchanges to be active purchasers driving savings and quality gains
  • 16. Benefits of Exchanges
    • Broad choice of private insurance for people who have had no choice or very limited choice
    • Small firms get affordable choices
    • Subsidies scaled to income will help moderate and middle-income people afford coverage
    • Exchanges could improve quality and lower costs through smart purchasing
  • 17. Exchange Challenges
    • Build an electronic-based system of determining eligibility for multiple programs
    • Create secure data sharing with federal agencies
    • Match federal tax credits with household contribution and get total to health plans
    • Develop capacity to assess health plans on rates, quality of care, provider networks, medical loss ratio
  • 18. Insurance Market Reforms
    • 2010: already in force
    • No lifetime caps, restricted annual caps, limits on rescinding
    • Children may stay on parents’ plans until age 26
    • No pre-existing condition exclusions for kids
    • 2011
    • Plans must report how premiums are spent
    • Process for state review of premium increases
  • 19. Insurance Market Reforms
    • 2012
    • Rebates to consumers if Medical Loss Ratio<80% (individual and small group plans) or 85% (large group plans)
    • 2014
    • Guaranteed issue and renewability (no one denied)
    • Rates may not vary with health status, limited variation on age
    • No annual limits on value of coverage
  • 20. Benefits of Insurance Market Reforms
    • Child (and later, anyone) with disability or prior illness will not be denied coverage or face exorbitant rates
    • Young adult without job-based insurance can remain on parent’s plan until age 26
    • Person requiring expensive treatments would not see coverage terminated after reaching health plan cap
    • Older adults not yet eligible for Medicare would see more affordable insurance rates
  • 21. Insurance Market Reform Challenges
    • Premiums for younger workers likely to rise; some may decline coverage and pay the modest penalty
    • State must develop and implement new regulations and procedures to review insurers’ premiums and how they are used
    • State must determine whether rate increases are “reasonable” to keep premiums affordable, without leading to many insurers leaving the state
  • 22. Federal Funding Opportunities
    • Community Health Centers
    • Expand capacity, test wellness plans
    • Medicaid
    • “ Health homes” for chronically ill patients
    • Quality measurement program
    • Global & Bundled payment demos
    • Pediatric Accountable Care Organization demo
    • Employers
    • Workplace wellness programs
    • Other: med malpractice demo, diabetes prevention…
  • 23. Employer & Individual Obligations
    • Employers
    • Small businesses not required to provide insurance; but if they do, eligible for up to 30% tax credit
    • Businesses with more than 50 workers must offer coverage or pay a fee
    • Businesses with up to 100 workers may buy through Exchange; larger firms may do so in 2017
    • Firms with more than 200 employees must automatically enroll workers unless employee opts out
    • Individuals
    • 2014: US citizens & legal residents must obtain coverage or pay penalty (exemptions for hardship cases)
  • 24. Financing
    • Smaller increases in Medicare payments to providers
    • Lower payments to Medicare Advantage plans
    • Board recommends cost-containment strategies if Medicare grows too fast
    • 0.9% payroll tax increase for couples $250k+ and individuals $200k+, and 3.8% tax on unearned income for high-income taxpayers (affecting about 2% households)
    • Excise tax on insurers selling “Cadillac” policies
    • $2,500 limit on FSA medical contributions
    • Fees on pharmaceutical and medical device manufacturers, health insurers, and tanning salons
  • 25. Action Steps
    • Prepare Medicaid
    • Conduct innovative outreach and enrollment of those newly eligible for Medicaid
      • Community Health Workers, auto-enrollment, etc.
    • Develop statewide plan for Medicaid managed care
      • with quality and access protections
    • Assess and address higher-risk and chronic care needs of newly eligible
      • E.g. care management, self-management education, transitional care
    • Apply for federal grants (planning, demos, etc.)
  • 26. Action Steps
    • Design Insurance Exchange
    • Consumer-friendly web portal for screening, eligibility determination, links to appropriate programs & subsidies
    • Insurance risk-adjustment mechanism
    • Health plan accountability for cost and quality
      • E.g. develop & collect quality measures for diabetes. asthma
    • Enact Necessary Legislation
    • Authority to Insurance department and AHCA to implement reforms
  • 27. Page  Thank you. Do You Have Any Questions? ? ? ?
  • 28. Page  Thank you. To download the report visit: Contact information: Leda Perez: [email_address] Jack Meyer: